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Foundation of planning - What do managers need to know about strategic management?

Q: What are 2 things on which an organisation can see if it is sensible to environmental change?

it depends on 2 things: the complexity of the organisation (suppliers,customers,workforce,...) the more you have the more complex it becomes. stability of the organisation (no new competitors, few technological breakthrough,...) if its stable there is little uncertainty, if its dynamic it uncertain.

4 important questions on Foundation of planning - What do managers need to know about strategic management?

What are 2 things on which an organisation can see if it is sensible to environmental change?

it depends on 2 things: the complexity of the organisation (suppliers,customers,workforce,...) the more you have the more complex it becomes. stability of the organisation (no new competitors, few technological breakthrough,...) if its stable there is little uncertainty, if its dynamic it uncertain.

Why is strategic management so important?

1. It can make a difference in how well organizations perform. The companies that strategically plan seem to have better results than the organizations who don't.

2. Organizations continously face changing situations, they cope with this using strategic management to plan their future actions.

3. Organizations are diverse and complex and all the departments have to work together to achieve its goals.

What are the 3 main corporate strategies?

1. Growth strategy: Organization expands the number of markets served or products offered, in the same or a new business. Possibility to grow in concentration, vertically, horizontally or in diversification.

2. Stability strategy: The organization continues in a similar way, often in times of uncertainty. The organization doesn't grow but doesn't fall behind either.

3. Renewal strategy: Organization is in trouble and declines. There are 2 options from here: Retrenchement strategy, minor problems and trying to stabilize things again. OR Turnaround strategy which means bigger problems and require bigger actions.

What are the 4 types of competitive strategies? (Porter's strategy framework)

1. Cost leadership strategy: Having the lowest costs in its industry.

2. Differentiation strategy: Offering unique products that are widely valued by customers (high quality, unique design,..)

3. Focus strategy: A cost advantage or differntiation advantage in a narrow segment or niche.

4. Stuck in the middle: Organization doesn't find a cost or differentiation advantage. Bad place to be.