Professional Documents
Culture Documents
A Major Shift. . .
Without strategic plan a company can have success for a short time. Shift in the world economy from a base of financial capital to intellectual capital.
Human- talent, skill, ability Structural- accumulated knowledge and experience Customer- customer base, positive reputation, ongoing relationship and goodwill.
Strategic Management
Is crucial to building a successful business. Involves developing a game plan to guide a company as it strives to accomplish its mission, goals , and objectives, and to keep it on its desired course.
They are what a company does best. Best to rely on a natural advantage (often linked to a companys smallness).
Examples: Netflix online DVD rental service Toms of Maine- natural product Deep sense of ethics and responsibility
Vision
Purpose is to focus everyones attention on the same target and to inspire them to reach it An expression of what an entrepreneur stands for and believes in.
Mission statement
Addresses question:" What business are we in?
Strengths
Positive internal factors that contribute to accomplishing the mission, goals, and objectives. Important skills, knowledge, resources that contribute to the firms success
Weaknesses
Negative internal factors that slow down the accomplishment of the mission, goals, and objectives.
Threats
Negative external factors that inhibit the firm's ability to accomplish its mission, goals, and objectives. Competitor, government regulation, economic recession, interest rate raise, technological advances Wal-Mart
Your Business Competitor 1 Competitor 2 Weighted Weighted Weighted Score Score Score (from Step 4) Weight Rating Rating Rating Market Share 0.10 3 0.30 2 0.20 3 0.30 Price Competitiveness 0.20 1 0.20 3 0.60 4 0.80 Financial Strength 0.10 2 0.20 3 0.30 2 0.20 Product Quality 0.40 4 1.60 2 0.80 1 0.40 Customer Loyalty 0.20 3 0.60 3 0.60 2 0.40 Total 1.00 2.90 2.50 2.10
Strategy?
Differentiation
Focus
Competitive Advantage
Uniqueness Perceived by the Customer Low Cost Position
Industry
Differentiation
Low Cost
Target Market
Niche
Differentiation Focus
Cost Focus
Cost Leadership
Goal: to be the low-cost producer in the industry (or market segment). Low-cost leaders have an advantage in reaching buyers who buy on the basis of price, and they have the power to set the industrys price floor. Works well when:
Buyers are sensitive to price changes. Competing firms sell the same commodity products. A company can benefit from economies of scale.
Differentiation
Company seeks to build customer loyalty by positioning its goods or services in a unique or different fashion. Idea is to be special at something customers value. Key: Build basis for differentiation on a distinctive competence, something that the small company is uniquely good at doing in comparison to its competitors. Examples:
Its A Wrap! Production Wardrobe Sales
Sell wardrobe, props and equipments from several of the studios recent movies for the customers who wanted to wear what the stars had worn.
Focus
Company selects one or more customer segments in a market, identifies customers special needs, wants, or interests, and then targets them with a product or service designed specifically for them. Strategy builds on differences among market segments. Rather than try to serve the total market, the company focuses on serving a niche (or several niches) within that market. Examples: The Apostolos Group and Panoz Auto Development
Balanced Scorecards
A set of measurements unique to a company that includes both financial and operational measures Gives managers a quick, yet comprehensive, picture of a companys overall performance. Four Perspectives:
Customer: How do customers see us?
Time : how long it takes to deliver Quality :reliability, durability accuracy of the product Performance : performance and expectation Service : how well it meets customer expectation of value?
Customer Perspective
Goals Measures