The most common initial act in establishing organizational direction is an organizational mission. The statement that describes the mission talks about the target market and also talks about its strategy to be profitable by providing good customer service through friendly and knowledgeable people. It is essential to look into external influences like labor, conditions, competitors, government rules while considering mission statement. Company’s mission statement should define stakeholders expected return along with the measurement of the performance of the company through those returns. The expected profit too should be included in the organization’s mission. Moreover, the company should come to consensus as to what all areas should be measured like margin growth, efficiency, competitive cost position, product quality, market share etc. A mission statement sets the boundaries for how resources should be allocated and what strategic and operational goals should be set. The mission statement should acknowledge the company’s strength and Continue reading
Strategic Management Terms
Ten Schools of Strategy
Strategy is considered as one of the interesting and engaging subject to discuss in business management schools. The strategy can be described or can be explained as a detail and systematic plan of particular action that has to be performed when it is required or when a requirement is envisaged. Different types of strategic problems form part of the strategic management process. Is it necessary for the companies or the organizations to focus more on the market share or focus on the revenue capital of the company or the organization? What are the plans and the processes required and necessary for the organization to focus on as to reach its goal and to reach the market shares? The great authors of Strategy Safari like Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel have explained strategies in their own words with their experiences. The strategy is explained in different approaches which includes Continue reading
Technology Adoption Life Cycle
Geoffrey Moore, An American organizational theorist, management consultant and author, in his books Crossing the Chasm (1991) and Inside the Tornado (1995), draws on marketing theory and high-tech experience to describe the elements of the product life cycle for technology innovations. His work examines how communities respond to discontinuous innovations – or any new products or services that require the end user in the marketplace to dramatically change their past behavior. He describes how companies must position their products differently through the cycle to reach their full sales potential and become an industry standard instead of a novelty. Many new technologies start along a classic new product diffusion curve, but fail soon thereafter. Through the various phases of the technology adoption life cycle, very different strategies for product and service offering and positioning are called for. The basis of the technology adoption life cycle is similar to the Continue reading
Prescriptive and Descriptive Schools of Strategy – Similarities and Differences
Strategy is a direction and scope of an organization over the long term, which achieves advantage in changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations. Having strategy in an organization is very important because it helps on how to meet the goals in consideration with the organization’s situation. An organization strategy answers all questions about fundamental business whether to concentrate in single business or build a group of several businesses, either to go for a broad range of customers or to concentrate on a market niche, either to focus on a wide or narrow product line, whether to base on competitive advantage with low cost or product differentiation. An organization has to know deeply everything concerned strategic management, strategic levels, and has to reach to the level of achievement of the strategic goals. Organizations also use strategy as the most important tool Continue reading
Types of Defensive Strategies
The defensive strategy is mainly to discourage the challenger firms to attack and is further divided into the pre-entry (protecting a firm by making it difficult for another firm to enter in the same industry – increase the entry barriers or it takes place before the market leader firm is attacked by the challenger firm) and the other one is the post-entry (making the life difficult for the competitor firm once it has entered the market). Pre-Entry Defensive Strategies Fortify and Defend: This mainly works by convincing the challenger firm that it is absolutely unprofitable to enter the market or it decreases the profit expectations of the about-to-enter firm. This is done by creating entry barriers like location, capital requirements, access to raw materials and distribution channels etc. The related firms as an example that can use this strategy would be — aerospace and automobiles. Covering all Bases: This mainly Continue reading