Summary Outline

• Strategies in Action
• Long-Term Objectives
• The Balanced Scorecard
• Types of Strategies
• Integration Strategies
• Intensive Strategies
• Diversification Strategies
• Defensive Strategies
• Michael Porter's Five Generic Strategies
• Cost Leadership Strategies
• Differentiation Strategies
• Focus Strategies
• Strategies for Competing in Turbulent, High-Velocity Markets
• Means for Achieving Strategies
• Cooperation Among Competitors
• Joint Venture/Partnering
• Merger/Acquisition
• First Mover Advantages
• Outsourcing
• Strategic Management in Non-profit and Governmental Organizations
• Strategic Management in Small Firms
• Conclusion
Summary

1. Long-term objectives represent the results expected from pursuing certain

strategies and should be quantitative, measurable, realistic, understandable,
challenging, hierarchical, obtainable, and congruent among organizational units.
2. Financial objectives include growth in revenues, growth in earnings, higher
dividends, larger profit margins, greater return on investment, higher earnings per
share, a rising stock price, improved cash flow, etc.
3. Strategic objectives include a larger market share, quicker on-time delivery than
rivals, shorter design-to-market times than rivals, lower costs than rivals, higher
product quality than rivals, wider geographic coverage than rivals, achieving
technological leadership, consistently getting new or improved products to market
ahead of rivals, etc.
4. The Balanced Scorecard is a strategy evaluation and control technique that
balances financial measures with nonfinancial measures and contains a
combination of strategic and financial objectives tailored to the company's business.
5. Integration strategies include forward integration, backward integration, and
horizontal integration.
6. Intensive strategies include market penetration, market development, and product
development.
7. Diversification strategies include related and unrelated diversification.
8. Defensive strategies include retrenchment, divestiture, and liquidation.
9. Michael Porter's Five Generic Strategies are cost leadership, differentiation, focus,
cost leadership strategies (Type 1 and Type 2), differentiation strategies (Type 3), and
focus strategies (Type 4 and Type 5).
10. Strategies for competing in turbulent, high-velocity markets include reacting to
changes, anticipating changes, and leading the market.
11. Cooperation among competitors can be used as a means for achieving strategies,
such as forming alliances or partnerships.
12. Joint ventures and partnering involve forming temporary partnerships or consortia
to capitalize on opportunities.
13. Mergers and acquisitions occur when two organizations unite or when a large
organization acquires a smaller firm.
14. First mover advantages refer to the benefits a firm may achieve by entering a new
market or developing a new product or service prior to rival firms.
15. Outsourcing involves companies taking over the functional operations of other firms.
16. Strategic management is important for small firms as it can enhance their growth
and prosperity.
17. Non-profit and governmental organizations also use strategic management to
improve their performance and justify financial support.
18. Defensive Strategies: Organizations can pursue retrenchment, divestiture, and
liquidation to reverse declining sales and profits or rid themselves of unprofitable or
non-core businesses.

19. Michael Porter's Five Generic Strategies: These strategies include cost leadership,
differentiation, focus, cost focus, and differentiation focus, which help organizations
achieve a competitive advantage.

20. Cost Leadership Strategies: Organizations can offer products or services at a lower
cost than competitors while maintaining acceptable quality.

21. Differentiation Strategies: Organizations can offer unique and superior products or
services that are valued by customers.

22. Focus Strategies: Organizations can target a specific market segment or niche and
tailor products or services to meet their specific needs.

23. Strategies for Competing in Turbulent, High-Velocity Markets: Organizations can

be agile and responsive to changes in the market, continuously innovate and adapt
to new technologies, and build strong customer relationships.

24. Means for Achieving Strategies: Organizations can achieve their strategies through
cooperation among competitors, joint ventures/partnering, mergers/acquisitions,
first mover advantages, and outsourcing.

25. Strategic Management in Nonprofit and Governmental Organizations: Strategic

management is important for nonprofit and governmental organizations to achieve
their mission and serve their stakeholders effectively.

26. Strategic Management in Small Firms: Small firms can benefit from strategic
management to achieve growth and profitability.

Conclusion: The main appeal of strategic management is the expectation that it will enhance organizational
performance. Through involvement in strategic management activities, managers and employees achieve a better
understanding of an organization’s priorities and operations. Strategic management allows organizations to be efficient and
effective. It allows for proactive decision making and can lead to a competitive advantage. However, strategic management does
not guarantee success and organizations must be prepared to adapt and respond to changes in the business environment. The
strategic management process is applicable to all types of organizations, including non-profit and governmental organizations,
educational institutions, medical organizations, and small firms. Each of these organizations can benefit from strategic
management by improving their operations, achieving their goals, and making informed decisions. Strategic management is a
vital tool for organizations to navigate the challenges and opportunities they face in today's dynamic business environment.
Key Terms

1. Long-term objectives: The results expected from pursuing certain strategies over a
period of two to five years.

2. Strategic management: The process of formulating and implementing strategies to

achieve organizational goals.

3. Financial objectives: Objectives related to growth in revenues, earnings, profit

margins, return on investment, etc.

4. Strategic objectives: Objectives related to market share, product quality,

technological leadership, etc.

5. Retrenchment: A strategy of regrouping through cost and asset reduction to reverse

declining sales and profits.

6. Divestiture: Selling a division or part of an organization to raise capital or focus on

core businesses.

7. Liquidation: Selling all of a company's assets in parts for their tangible worth, often
as a last resort before bankruptcy.

8. Forward integration: Gaining ownership or increased control over distributors or

retailers.

9. Backward integration: Seeking ownership or increased control of a firm's suppliers.

10. Horizontal integration: Seeking ownership or increased control of a firm's

competitors.

11. Market penetration: Increasing market share for present products or services in
present markets through greater marketing efforts.

12. Market development: Introducing present products or services into new geographic
areas.

13. Product development: Seeking increased sales by improving or modifying present

products or services.

14. Related diversification: Expanding into businesses that have strategic fits with the
organization's existing value chain.
15. Unrelated diversification: Expanding into businesses that have no strategic fits with
the organization's existing value chain.

16. Defensive strategies: Strategies such as retrenchment, divestiture, and liquidation

used to address declining sales and profits.

17. Cost leadership: a strategy that focuses on producing standardized products at a

low cost to attract price-sensitive consumers.

18. Differentiation: a strategy that aims to produce unique products or services that are
considered valuable by consumers.

19. Focus: a strategy that targets a specific group of consumers with products or services
that fulfil their specific needs.

20. Type 1 cost leadership strategy: offers products or services to a wide range of
customers at the lowest price available on the market.

21. Type 2 cost leadership strategy: offers products or services to a wide range of
customers at the best price-value available on the market.

22. Type 3 differentiation strategy: produces products and services considered unique
industrywide and directed at price-insensitive consumers.

23. Type 4 focus strategy: offers products or services to a small range of customers at
the lowest price available on the market.

24. Type 5 focus strategy: offers products or services to a small range of customers at
the best price-value available on the market.

25. Joint venture: a temporary partnership or consortium formed by two or more

companies to capitalize on an opportunity.

26. Merger: when two organizations of similar size unite to form one enterprise.

27. Acquisition: when a larger organization purchases a smaller firm, or vice versa.

28. First mover advantages: the benefits a firm may achieve by entering a new market or
developing a new product or service before competitors.

29. Outsourcing: the practice of contracting out certain business functions to external
companies.