MAC2602
Summary Notes.
,Study Guide One
Part 1 : Strategy and strategic planning
Topic 1 : Development of the organisation’s strategy
Study Unit 1 : Defining concepts – mission,core values,vision,strategy and strategic objectives
Mission - core purpose
Effective mission statement :
Inspire change ,but does not change
Long-term in nature
Easy to understand and easy to communicate
Core values - principles that guide the organisation
Vision - defines direction for the future
Strategy – choosing long-term strategies to achieve purpose set out in mission statement
Three generally accepted competitive strategies :
Cost leadership strategy
Pricing strategy :
Price skimming
Selective pricing
Market pricing
Predatory (penetration) pricing
Differentiation
Elements of strategy :
Choice of activities which provide a competitive advantage
Trade-offs made to choose specific actions
Activities chosen must fit one another
Major structural changes can change strategies,however cannot be constantly
reinvented
Formulation should display a broad conceptual knowledge of the operating
environment of the organisation
Core values are taken into account
Strategic objectives – measures to progress and targets to achieve in a specific time frame
Characteristics :
Precise formulation of goals to be achieved
Contains a measure of progress
Contains a target to be achieved
Contains a time frame for target to be achieved
SMART criteria :
Specific
Measurable
Attainable
Relevant
Time-bound
,Study Unit 2 : Key stakeholders : roles,conflict and influences
Stakeholders – those persons and organisations that are affected by the organisation's
activities and who have an interest in the strategy of the organisation.
Classification of stakeholders :
Primary Stakeholders (have a contractual relationship)
Internal Stakeholders
o Managers
o Employees
Connected Stakeholders
o Shareholders/owners
o Banks and lenders
o Suppliers
o Customers
Secondary Stakeholders (do not have a contractual relationship)
External Stakeholders
o Government
o Local authorities
o Professional bodies
o Pressure groups
o Community at large
Possible conflicts between the expectations of the different types of stakeholders -
shareholders/owners expect a specific return on their investment whilst employees expect
security of their jobs and job satisfaction.
Influence of different stakeholders on development of organisation strategy :
Dependency
Degrees of power
Level of interest
, Study Unit 3 : Factors that influence the development of an organisation’s strategy
Influence of Factors in the external environment :
Political (including legal) environment
Economic environment
Social environment (sustainability and ethics)
Technological environment
Competitive Environment (operating) :
Customer position
Purpose of a competitor analysis :
o Study the market,trends and patterns
o Predict and forecast an organisation’s demand and supply
o Formulate a strategy
o Increase the market share
o Develop a strategy for organisation growth
o Plan for diversification and expansion
o Study forthcoming trends in the industry
Customer base
Suppliers
Creditors
Labour market
Influence of factors in the internal environment :
Corporate culture (shared beliefs,values and symbols)
Organisation leadership (executives and managers)
Human resource policies (formal decisions)
Industrial relations (Labour relations)
Controls at organisation level (such as code of conduct)
Summary Notes.
,Study Guide One
Part 1 : Strategy and strategic planning
Topic 1 : Development of the organisation’s strategy
Study Unit 1 : Defining concepts – mission,core values,vision,strategy and strategic objectives
Mission - core purpose
Effective mission statement :
Inspire change ,but does not change
Long-term in nature
Easy to understand and easy to communicate
Core values - principles that guide the organisation
Vision - defines direction for the future
Strategy – choosing long-term strategies to achieve purpose set out in mission statement
Three generally accepted competitive strategies :
Cost leadership strategy
Pricing strategy :
Price skimming
Selective pricing
Market pricing
Predatory (penetration) pricing
Differentiation
Elements of strategy :
Choice of activities which provide a competitive advantage
Trade-offs made to choose specific actions
Activities chosen must fit one another
Major structural changes can change strategies,however cannot be constantly
reinvented
Formulation should display a broad conceptual knowledge of the operating
environment of the organisation
Core values are taken into account
Strategic objectives – measures to progress and targets to achieve in a specific time frame
Characteristics :
Precise formulation of goals to be achieved
Contains a measure of progress
Contains a target to be achieved
Contains a time frame for target to be achieved
SMART criteria :
Specific
Measurable
Attainable
Relevant
Time-bound
,Study Unit 2 : Key stakeholders : roles,conflict and influences
Stakeholders – those persons and organisations that are affected by the organisation's
activities and who have an interest in the strategy of the organisation.
Classification of stakeholders :
Primary Stakeholders (have a contractual relationship)
Internal Stakeholders
o Managers
o Employees
Connected Stakeholders
o Shareholders/owners
o Banks and lenders
o Suppliers
o Customers
Secondary Stakeholders (do not have a contractual relationship)
External Stakeholders
o Government
o Local authorities
o Professional bodies
o Pressure groups
o Community at large
Possible conflicts between the expectations of the different types of stakeholders -
shareholders/owners expect a specific return on their investment whilst employees expect
security of their jobs and job satisfaction.
Influence of different stakeholders on development of organisation strategy :
Dependency
Degrees of power
Level of interest
, Study Unit 3 : Factors that influence the development of an organisation’s strategy
Influence of Factors in the external environment :
Political (including legal) environment
Economic environment
Social environment (sustainability and ethics)
Technological environment
Competitive Environment (operating) :
Customer position
Purpose of a competitor analysis :
o Study the market,trends and patterns
o Predict and forecast an organisation’s demand and supply
o Formulate a strategy
o Increase the market share
o Develop a strategy for organisation growth
o Plan for diversification and expansion
o Study forthcoming trends in the industry
Customer base
Suppliers
Creditors
Labour market
Influence of factors in the internal environment :
Corporate culture (shared beliefs,values and symbols)
Organisation leadership (executives and managers)
Human resource policies (formal decisions)
Industrial relations (Labour relations)
Controls at organisation level (such as code of conduct)
