STRATM1 MIDTERMS

• Long-term objectives represent the results expected from pursuing certain strategies. Strategies represent the actions to be taken to accomplish long-term objectives. The time frame for objectives and strategies should be consistent, usually from two to five years.
• Objectives are commonly stated in terms such as growth in assets, growth in sales, profitability, market share, degree and nature of diversification, degree and nature of vertical integration, earnings per share, and social responsibility.
• Objectives provide direction, allow synergy, aid in evaluation, establish priorities, reduce uncertainty, minimize conflicts, stimulate exertion, and aid in both the allocation of resources and the design of jobs.
• Objectives provide a basis for consistent decision making by managers whose values and attitudes differ. It serve as standards by which individuals, groups, departments, divisions, and entire organizations can be evaluated.
• Long-term objectives are needed at the corporate, divisional, and functional levels of an organization. They are an important measure of managerial performance.
• Financial objectives include those associated with growth in revenues, growth in earnings, higher dividends, larger profit margins, greater return on investment, higher earnings per share, a rising stock price, and improved cash flow.
• Strategic objectives include things such as 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.
• Managing by Extrapolation —adheres to the principle “If it ain’t broke, don’t fix it.” The idea is to keep on doing about the same things in the same ways because things are going well.
• Managing by Crisis— strategists ought to bring their time and creative energy to bear on solving the most pressing problems of the day and is actually a form of reacting rather than acting and of letting events dictate the what and when of management decisions.
• Managing by Subjectives— “Do your own thing, the best way you know how” (sometimes referred to as the mystery approach to decision making because subordinates are left to figure out what is happening and why).
• Managing by Hope —based on the fact that the future is laden with great uncertainty and that if we try and do not succeed, then we hope our second (or third) attempt will succeed.
• The Balanced Scorecard is a strategy evaluation and control technique which derives its name from the perceived need of firms to “balance” financial measures that are oftentimes used exclusively in strategy evaluation and control with nonfinancial measures such as product quality and customer service.
• An effective Balanced Scorecard contains a carefully chosen combination of strategic and financial objectives tailored to the company’s business. The overall aim is to “balance” shareholder objectives with customer and operational objectives and is consistent with the notions of continuous improvement in management (CIM) and total quality management (TQM).
• A Balanced Scorecard for a firm is simply a listing of all key objectives to work toward, along with an associated time dimension of when each objective is to be accomplished, as well as a primary responsibility or contact person, department, or division for each objective.
• Forward integration involves gaining ownership or increased control over distributors or retailers. Increasing numbers of manufacturers (suppliers) today are pursuing this strategy by establishing Web sites to directly sell products to consumers. An effective means of implementing forward integration is franchising.
• Backward integration is a strategy of seeking ownership or increased control of a firm’s suppliers. This strategy can be especially appropriate when a firm’s current suppliers are unreliable, too costly, or cannot meet the firm’s needs.
• Horizontal integration refers to a strategy of seeking ownership of to increased control over a firm’s competitors. One of the most significant trends in strategic management today is the increased use of this a growth strategy. Mergers, acquisitions, and takeovers among competitors allow for increased economies of scale and enhanced transfer of resources and competencies.
• A market penetration strategy seeks to increase market share for present products or services in present markets through greater marketing efforts and is widely used alone and in combination with other strategies. It  includes increasing the number of salespersons, increasing advertising expenditures, offering extensive sales promotion items, or increasing publicity efforts.
• Market development involves introducing present products or services into new geographic areas.
• Product development is a strategy that seeks increased sales by improving or modifying present products or services and usually entails large research and development expenditures.
• Stage 1 – Input Stage summarizes the basic input information needed to formulate Strategies that consist of the EFE Matrix, the IFE Matrix, and the Competitive Profile Matrix (CPM)
• Stage 2 – Matching Stage focuses on generating feasible alternative strategies by aligning key external and internal factors. Techniques include: SWOT Matrix, SPACE Matrix (Strategic Position and Action Evaluation), Boston Consulting Group Matrix, Internal –External Matrix, and Grand Strategy Matrix.
• Stage 3 – Decision Stage involves the Quantitative Strategic Planning Matrix (QSPM) and reveals the relative attractiveness of alternative strategies and thus provides objective basis for selecting specific strategies.
• The Strength-Weaknesses-Opportunities-Threats (SWOT) Matrix helps managers develop four types of strategies : SO (strength-opportunities) Strategies, WO (weaknesses-opportunities) Strategies, ST (strength-threats) Strategies, and WT (weaknesses-threats) Strategies.
• The SPACE matrix is a management tool used to analyze a company. It is used to determine what type of a strategy a company should undertake. It is a strategic management tool that focuses on strategy formulation especially as related to the competitive position of an organization. It can be used as a basis for other analyses, such as the SWOT analysis, BCG matrix model, industry analysis, or assessing strategic alternatives (IE matrix).
• THE BOSTON CONSULTING GROUP (BCG) MATRIX graphically portrays differences among divisions in terms or relative market share position and industry growth rate. It allows a multidivisional organization to manage its portfolio of businesses by examining the relative market share position and the industry growth rate of each division relative to all other divisions in the organization.
• The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of the organization’s various divisions.
• Relative market share is the firm’s or brands market share is an index of its largest competitor. In this way, relative market share becomes a measure of competitive strength.
• The IE Matrix is based on two key dimensions: the IFE total weighted scores on the x-axis and the EFE total weighted score on the y-axis. THREE MAJOR REGIONS: Grow and Build, Hold and Maintain, Harvest or Divest.
• Grand Strategy Matrix is based on two evaluative dimensions: competitive position and market (industry) growth
• THE QUANTITATIVE STRATEGIC PLANNING MATRIX objectively indicates which alternative strategies are best. It uses input from Stage 1 analyses and matching results from Stage 2 analyses to decide objectively among alternative strategies.
• THE QUANTITATIVE STRATEGIC PLANNING MATRIX objectively indicates which alternative strategies are best. It uses input from Stage 1 analyses and matching results from Stage 2 analyses to decide objectively among alternative strategies.