WGU | C483 | Principles of Management Study Guide (SECTION 1: Strategic Planning) exam questions and answers

What is Strategic Planning A management tool used to guide an organization's decisions and actionsin response to a constantly changing business environment. Strategic planning is a disciplined effort that helps managers focus on what they should do, why they should do it, and how they can successfully continue to do it. Steps in the formal planning process 1. Situational Analysis 2. Alternative Goals and Plans 3. Goal and Plan Evaluation 4. Goal and Plan Selection 5. Implementation 6. Monitor and Control What is Situational Analysis 1st step in FPP A process planners use, within time and resource constraints, to gather, interpret, and summarize all information relevant to the planning issue under consideration. What is Alternative Goals and Plans 2nd step in FPP Generating multiple goals to be pursued and multiple plans to achieve them. Plans should outline alternative actions to reach goals, resources required, and potential obstacles. What is Goal and Plan Evaluation 3rd step in FPP Evaluating the advantages, disadvantages, and potential effects of each goal and plan. Prioritizing certain goals/plans over others based on ROI. What is Goal and Plan Selection? 4th step in FPP Choosing a goal/plan based on evaluation outcome. Based on factors likeupfront investment, size of market, which fits best with currently offered products, fits with company image What is Implementing 5th step in FPP Putting the goal/plan in motion, linking with other systems (budget & reward) for the financing & employee incentives. What is Monitoring and Controlling 6th step in FPP Keeping tabs on if the plan is succeeding. Managers develop control systems to measure performance and make corrective action. What is the Mission? A clear and concise expression of the basic purpose of the organization. Describes WHAT the organization does, for WHOM it does, and the basic good/service What is Strategic Vision (Intent)? Points to the future. Perspective on where the organization is headed and what it can become. An aspiration. Long-term direction. What are Goals? Specific things an organization wants to achieve. Something that the organization is looking to accomplish. What is a SWOT Analysis? A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy. What are Strengths in SWOT Analysis? Internal environment e.g. Skilled management, Positive cash flow, Well-known brands What are Weaknesses in SWOT Analysis? Internal environment e.g. Lack of online marketing knowledge, Limited financial resources, Lack of reliable suppliers What is Opportunities in SWOT Analysis? External environment e.g. New technology to make supply chain efficient, underserved market niche, scalable operations What are Threats in SWOT Analysis? External environment e.g. Competitors enter underserved-profitable niche, costs for production increasing, natural disasters & weather. What is a Corporate Strategy? identifies the set of businesses, markets, or industries in which the company competes and the distribution of resources among those businesses What are 4 Corporate Strategies? 1. Concentration strategy 2. Vertical Integration strategy 3. Concentric Diversification strategy 4. Conglomerate Diversification strategy What is a Concentration Strategy? Focusing on a single business in a single industry. What is Concentric Diversification Strategy? Moving into new but related businesses. To create products already similar to current products. What is a Vertical Integration Strategy? Expanding the company's domain to include supplier and distributors to control supply chain. What is Conglomerate Diversification Strategy? Expanding to unrelated businesses. Adding products that have no relation of similarity to current products. What is a Business Strategy? Major actions aimed at building and strengthening competitive position. What are 2 generic Business Strategies? 1. Low-Cost strategy 2. Differentiation strategy What is Low-Cost Strategy? Being efficient and offering a standard, no-frills product. Be the cost-leader in its industry/market. What is a Differentiation Strategy? Being unique in its industry or market segment, other than cost. E.g. high quality products, excellent marketing/distribution, superior service. What are Core Competencies/Capabilities? A companies knowledge, skills, and resources that make its "defining strength". Something that other companies can't easily replicate. Resources that are VALUABLE, RARE, INIMITABLE, ORGANIZED. What are Porter's Five Forces? 1. Customer Power 2. Supplier Power 3. Threat of substitute products or services 4. Threat of new entrants