The corporate strategy starts through Vision and Mission Statements can be accessed by culture, core values and its core values on which it competes. Mission statement shows the exact purpose of the organization. This statement is primary objective of the organization to show the plans, aims and programs of the company. A mission statement is bit different from the vision statement. A clear mission statement also focus on what are the advantages which is you are offering to your patrons as well as consumers it also tells you exact purpose of your organization. A good mission statement is like a born of success for the organization. It is very for the companies to find out the ways and also do the regular confirmation whether company or organization is on the right way or not. A purpose of a clear mission statement to an organization to align the people as well Continue reading
Strategic Management Terms
Business Strategy: The Three Generic Strategies
Three of the most widely read books on competitive analysis in the 1980s were Michael Porter’s Competitive Strategy, Competitive Advantage, and Competitive Advantage of Nations. In his various books, Porter developed three generic strategies that, he argues, can be used singly or in combination to create a defendable position and to outperform competitors, whether they are within an industry or across nations. The strategies are (1) overall cost leadership, (2) differentiation, and (3) focus on a particular market niche. Cost Leadership, Differentiation, and Scope These strategies are termed generic because they can be applied to any size or form of business. We refer to them as trade-off strategies because Porter argues that a firm must choose to embrace one strategy or risk not having a strategy at all. Overall lower cost or cost leadership overall cost-leadership strategy, a strategy in which an organization attempts to gain a competitive advantage by Continue reading
Greiner’s Model of Organizational Growth – Phases of Organizational Growth and Crisis
All organizations pass through various stages of growth and at each stage the organization is required to solve some specific problems. A very useful model of organizational growth has been developed by Larry E. Greiner. In his 1998 Harvard Business Review article entitled “Evolution and Revolution as Organizations Grow,” Greiner outlined five phases of growth punctuated by what he termed “revolutions” that shook up the status quo and ushered in the successive stage. Greiner’s Model of organizational growth is based on certain assumptions about the organization which are as under: First assumption is organisations are rigid, bureaucratic, control-centric, and centralized entities. Second, organisations fail to see that the future success of an organisation lie within their own organisation, and also fail to assess their evolving states of development. Therefore inability of a management to understand its organisation development problems can result in organisation becoming frozen in its present stage of Continue reading
Advantages and Disadvantages of having a Mission Statement
Mission statement is a summary statement of a company’s or organization’s purpose about what it wants to accomplish in the larger environment. Mission statement is playing an important role with the overall strategic planning of an organization. All of the strategic planning of an organization should base on the mission of an organization that had been set. Strategic planning include all the long-range plans, strategic plans and also annual plans which include decision making about the human resource management, production and operation, finance and it is also concerned about the marketing planning. A well-defined mission statement is very important to guide people in the organization, clearly defines who the customer is and what services and products the businesses are intended to provide. A good mission statement should contain some criteria. First, a good mission statement should be market-oriented. A market-oriented mission statement focuses on satisfying customer’s needs. A mission statement Continue reading
Retrenchment Strategies Followed by Organizations
A retrenchment grand strategy is followed when an organization aims at a contraction of its activities through substantial reduction or the elimination of the scope of one or more of its businesses in terms of their respective customer groups, customer functions, or alternative technologies either singly or jointly in order to improve its overall performance. Eg: A corporate hospital decides to focus only on special treatment and realize higher revenues by reducing its commitment to general case which is less profitable. The growth of industries and markets are threatened by various external and internal developments (External developments – government policies, demand saturation, emergence of substitute products, or changing customer needs. Internal Developments — poor management, wrong strategies, poor quality of functional management and so on.) In these situations the industries and markets and consequently the companies face the danger of decline and will go for adopting retrenchment strategies. Eg: fountain Continue reading
Porter’s Five Forces and Three Generic Strategies
The long development of Porter’s Five Forces Analysis has brought to the fact that those forces become the determinants of the industry’s competition. These five forces are treat of new entry, rivalry among existing firms, treat from substitute products, bargaining power of buyers, and bargaining power of suppliers. Furthermore, five forces analysis is treated by the organization to measure the level of competition, besides that, it is used as a strong first step in understanding how one industry compares to another and also to determine industry profitability because they influence the prices, costs, and required investment of firm in an industry. In order to be competitive enough, a normal company that seeks profitability would have to understand how they work in its industry and how they affect the company in its particular situation. Therefore, Three Generic Strategies were implemented to establish a strategic agenda for dealing with these five forces. Continue reading