MAC2602-Exam Pack

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 ............................continued