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Strategic Planning: Refers to the process through which an organization defines its strategy, allocate its resource and lead the direction that the company will follow to achieve its goals.
Strategic Planning is the formal planning for the future and help the company to define:
What we do?
For whom we do it?
How do we successes?
Tactical Planning: Refers to the process of taking the strategic plan and divided into specific activities, short term actions and plans to achieve the planned objectives.
Operations Planning: Refers to the action plan for the day-to-day functioning of an organization. It defines the short term methods to achieve the strategic objectives set while strategic planning is done. In other words, Operation planning allows the company to determine how to do it.
How can corporate governance support ethical strategic decisions?
Corporate governance should support ethical strategic decision base on:
Guarantee that shareholder's interest will be serve, as well product market shareholders and organizational stakeholders.
Ensure at least the minimal interests or needs of all stakeholders.
Control of managerial decisions and ethical behavior in the all levels of the organization.
Inform and communicate clearly to top level manager the board's expectation related to decision and action of all the firm's stakeholders.
List and discuss some of the ethical methods of collecting intelligence about competitors.
Public sources: you may gather information about your competitors from public sources, with this practice the company can make good use of the available information without to apply any unethical techniques. Some of public sources are:
Newspapers, magazines, other published articles and television programs
Advertisements and brochures intended for public distribution
Information freely available on the Internet and online research services
Public filings made with governmental or regulatory authorities, such as SEC reports, patent filings and litigation records
Industry surveys or reports
Public presentations given by competitors at trade shows and conferences
Freedom of Information Act (FOIA) and similar requests from governmental or regulatory agencies
. With this practice the company can make good use of the available information without having to steal or blackmail for information or applying any unethical techniques.
Attending trade fairs and shows in order to obtain competitors brochures, view exhibits, land listen to discussions about their products. This way the company can gather information and look at the competitor from the client perspective.
What is meant by the term Sustainable Competitive Advantage.? List and describe the four criteria for sustainable advantage.
A sustainable competitive advantage refers to the capabilities (core competencies) that the company posses that make it competitive and reflect its personality. Those capabilities are As are difficult to imitate or substitute for the competitor that make the company gain competitive advantage. The four criteria of sustainable competitive advantage are: Valuable capabilities permit the company to neutralize threats or take advantage of opportunities.
Rare capabilities are not possessed by many others; that permit competitive advantage over the competition.
Costly to imitate, capabilities that are unique and difficult to imitate for the competitors. Such as organizational culture or brand name, interpersonal relationship, trust, and friendship among managers, supplies, and customers.
Non-substitutable capabilities are a no strategic equivalent. The more invisible capabilities are, the most difficult it is for firms to find substitutes.
What is SWOT? Give some examples of how SWOT analysis can be used.
SWOT is strategic planning tools that are utilized by businesses and other organizations to ensure that there is a clear objective and that all factors related to the Strength, Weaknesses, Opportunities and Threats are identify.
Strengths are attributes or characteristics within the organization that are considered to be important to the execution and ultimate success of the objectives. For example, management experience, state of the art manufacturing facilities, and a solid profit line already in place.
Weaknesses have to do with internal factors that could prevent the achievement of a successful result of the objectives. For examples, factors such as a weak internal communication system, unhealthy levels of rivalry between departments, and lack of raw materials.
Opportunities have to do with external elements that will help to achieve the goals set for the company. For example, positive perception of the company by the general public, a network of vendors who are willing to work with the company, market conditions that will help to make a project desirable to the market at large, or at least a significant segment.
Your text list two key business level strategies as Cost Leadership and Differentiation. Explain what these strategies mean.
In the cost leadership strategy organizations compete for a wide customer based on price. Price is based on internal efficiency in order to have a margin that will sustain above average returns and cost to the customer so that customers will purchase your product or service. This strategy can remain profitable even with rivalry, new entrants, suppliers' power, substitute products, and buyers' power. (Rivalry) Competitors are likely to avoid a price war, since the low cost firm will continue to earn profits after competitors compete away their profits. Examples: Spirit Airlines, South West, and AA. (Customers) Powerful customer might be able to force the cost leader to reduce price for below of the level of the cost leader's allow the next most efficient competitor exit the market, this will result in a less competition for the cost leader and keeping a strong position in the market. (Suppliers) cost leaders are able to absorb greater price increases before it must raise price to customers. (Entrants) low cost leaders create barriers to market entry through its continuous focus on efficiency and reducing costs. (Substitutes) low cost leaders are more aware to lower costs to attract customers to stay with their product, invest to develop substitutes, purchase patents.
In the differentiation strategy (Rivalry) customers tend to be loyal purchasers of products differentiated in ways that are meaningful to them. (Customers) customers are willing to paid increase when a product still satisfies their perceived unique needs better than a competitor's offering can. (Suppliers) supplier must provide high quality components; the company can pass the additional cost of supplies on to the customer by increasing the price of its unique product. (Entrants) customer loyalty is an important barrier to potential entrants. (Substitutes) companies selling brand-names goods and services to loyal customer are positioned effectively against product substitutes. Examples, Apple with the IPod and Iphone are unique products that customers are willing and able to buy even if the prices are higher.
Compare and contrast functional and divisional structures.
a. Functional Structure has the advantage of being simple to understand with clear lines of command, specified tasks and responsibilities.Â Staff can specialize in a particular business area such as production or marketing and follow well-defined career paths. This is equally true of human resource specialists who can develop expertise in specific areas such as employee relations or reward management.
b.Â Â Â Â Divisional structure encourages team spirit and identification with a product or region. Managers can develop broad skills as they have control of all basic functions. Â Each division is likely to have a devolved human resource function. But there is a risk of duplicating activities between head office and divisional human resource departments and of conflict between staff in successful and unsuccessful divisions.Â The divisional function may play a coordinating role, reconciling decisions taken at the corporate and business unit levels. This results in a complex picture of people management.
8. Discuss two key issues related to implementing business-level strategies.
b. Competitive Rivalry is the ongoing set of actions and responses occurring between competitors. Competitive rivalry influences and individual firm's ability to gain and sustain competitive advantage. For example, Verizon is a competitive rival of T-mobile.
c. Competitive Behavior is the set of competitive actions and responses the firm takes to build or defend its competitive advantages and to improve its market position. For example when the Iphone first came out was only sold by AT&T creating a monopoly to the other companies.
Discuss how technology can be used to create new industries -- include in your discussion at least two examples.
Technology can be used to create new industries through the innovation because it changes rapidly and consistently; those changes allow creating new process, products/goods and services that generate competitive advantage. The rapid diffusion of technology among competitors enhances to create new industries in the market as a result of competitive advantage.
In addition, technology create new industry due to the disruptive technology; old technology is replacing by the new one forcing companies create new markets in order to be profitable and competitive.
For example: Companies such as Amazon.com, eBay.com, shopping.com are product of the creation of e-commerce. This technology has facilitated many people buy from the comfort of their homes.
For example: Technology has improved over time with introduction of the virtual conference, instants messages, intranet, internet and e-mails has promote doing companies business transaction worldwide at low cost and opening new market opportunities.
Discuss how innovation can be facilitated in corporations.
Innovation can be facilitated in corporations by many ways such as, incorporating the concept "innovation" into their organizational culture through creativity, motivation, productivity and performance. Once the firm's ability engages in innovation makes the difference in gaining and maintaining a competitive advantage and achieving performance targets. Innovation also must be incorporate in the vision and mission of the company to promote creativity among employees, shareholders, and others to develop effective strategic that will encourage the firm's capabilities.