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CHAPTER 5: STRATEGIES IN ACTION (LT OBJ (Benefits have clear obj (Provide…
CHAPTER 5: STRATEGIES IN ACTION
LT OBJ
Quantitve
Measurable
Realistic
Understanble
Challengnig
hierarchical
Obtainable
Congruent
Benefits have clear obj
Provide direction by revealing expectation
Allow synergy
Aid in evaluation by serving as standard
Establish priorities
Reduce uncertainty
Minimizes conflict
Stimulate exertions
Aid in allocation of resources
Aid in design of job
Provide basis for consistent decision making
FINANCIAL OBJ
Growth in revenues
Growth in earning
Higher dividend
Larger profit margin
Greater ROI
Higher earning per share
Rising stock price
Improved cash flow
STRATEGIC OBJ
Larger market share
Quicker on-time delivery than rivals
Shorter design to market than rivals
Lower costs than rivals
Higher product qulaity than rival
Wider geographic coverage than rival
Achieving technological leadership
Consistently getting new/improved products to market ahead of rivals
TYPE OF STRATEGY
Vertical Integration Strategies
Foward
Gaining ownership/increased cntrl of distributor
Backward
Seeking ownership/increased cntrl of supplier
Horizontal
Seeking ownership/increased cntrl over competitors
Intensive strategies
Market penetration
Seeking increased market share for present products/services in present market through greater marketing effort
Market development
introducing present products/services into new geographic areas
Product development
Seeking increased sales by improving present products/services @ developing new one
Diversification strategies
Related
Adding new but related products/services
Unrelated
Adding new, unrelated product/services
Defensive strategies
Retrenchment
Regrouping through cost and asset reduction to reverse declining sales&profits
Divestitures
Selling a division/part of an organization
Liquidation
Selling all of company's asset, in part for their tangible worth
Porter's Five Generic Strategies
Type 1/2 cost leadership strategy conditions
Vigorous price competition
Plentiful supply of identical products
Little product differentiation
Product used in same ways
Low cost to switch
Larger buyers with power
Industry newcomers use low prices to attract buyers
Type 3 differentiation strategy condition
Many ways to differentiate and buyers perceive the diff as having values
Diverse buyer needs and uses
Few rivals firms following similar differentiation approach
Fast paced technological change and evolving product features
Type 4/5 Focus strategy conditions
Large, profitable and growing target market niche
Industry leaders do not consider the niche crucial to their success
Industry leaders consider it costly/difficult to meet the needs of this niche
Industry has mny niches and segments
Few rivals are specializing on this target segment