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University of Toronto Scarborough
Management (MGT)

Chapter 6- Business Strategy  The work of all managers involves developing strategic and tactical plans. They must also analyze their competitive environments and plan, organize, direct, and control day to day operations.  Strategy is the determination of the basic long term goals and objectives of an enterprise, and the courses of action necessary for carrying out those goals.  Strategic Management is a process; it is a series of activities of ten called “The Strategic Management Model”.  Establish Goals analyze Industry environment Analyze the organization Choose Scope of Organization Choose means of competition  Leader is a person who rules or guides or inspires others. “Leadership is ultimately about creating a way for people to contribute to making something happen.  Clearly articulated mission and goals; o Provides direction and guidance o Helps business allocate resources o Helps to define corporate culture o Helps managers assess performance.  There are 3 specific types of goals that most firms spend time setting; o Long Term goals are related to extended period of time (typically five years of more) o Intermediate Goals are set for a period of one to five years into the future. o Short Term goals which are set for one year or less.  Plans must have basis in reality. Organization must be aware of what’s going on in the world around it. Businesses use a variety of analytical models and tools to assess: “Where are we now?”  SWOT Analysis, is the identification and analysis of organizational strengths and weaknesses and environmental opportunities and threats as a part of strategy formulation. Note that strengths and weaknesses are internal to the company, while opportunities and threats are external. o Strengths and Weaknesses (the S and the W) o Environmental Opportunities and Threats (the O and T).  There are 3 main levels of strategy in a business firm; A corporate-level strategy identifies the various businesses that a company will be in. and how these businesses will relate to each other. A Business-level strategy identifies the ways a business will compete in its chosen line of products or services. Functional strategies identify the basic courses of action that each department in the firm will pursue so that it contributes to the attainment of the businesses over all goals. o There are several different corporate level strategies that a company might pursue, including concentration, growth, integration, diversification and investment reduction.  Concentration strategy involves focusing the company on one product or product line.  Growth, companies have several growth strategies available to them, all of which focus on internal activities that will result in growth.  Integration- Horizontal integration means acquiring control of competitors in the same or similar markets with the same or similar products. Vertical integration means owning or controlling the inputs to the firm’s processes and/or the channels through which the products or services are distributed.  Diversification means expanding into related or unrelated products or market segments. Diversification helps the firm avoid the problem of having all of its eggs in one basket by spreading risk among several products or markets.  Investment Reduction means reducing the company’s investment in one or more of its lines of business. o Business- Level (Competitive Strategies) is a plan to establish a profitable and sustainable competitive position against the forces that determine industry competition. The 3 competitive Strategies are; cost leadership, differentiation, and focus.  Cost leadership means becoming the low cost leader in an industry.  Differentiation strategy is when a firm seeks to be unique in its industry along some dimension that is valued by buyers.  Focus strategy means selecting a market segment and serving the customers in that market niche better than competitors. o Functional Strategies are those that are transformed from business choice of competitive strategies. A functional is the basic course of action that each department follows so that the business accomplishes its overall goals. Chapter 7- Managers and Managing  Managing has 4 key activities involved with it; o Planning o Organizing o Leading o Controlling  Planning is determining what needs to be done, and the best way to achieve it.  Organizing is mobilizing the resources necessary to complete the task.  Leading is guiding and motivating others to meet the organizations objectives. “Teaching and leading by example”.  Controlling is monitoring performance and, if necessary, acting to bring them in line with the organization’s goals.  There are 3 basic levels of management they are; Senior, Middle, and First Line Management. More middle than senior and more first-line than middle. o Senior Managers are those managers responsible for a firms overall performance and effectiveness and for developing long-range plans for the company o Middle managers are those managers responsible for implementing the decisions made by top managers. o First- Line are those managers responsible for supervising the work of employees.  Within any large company the top,
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