Strategic Management PEARCE & ROBINSON

1. CHAPTER 6 Formulating Long-Term Objectives and Grand Strategies

4. Qualities of Long-Term Objectives Criteria used in preparing objectives Acceptable Flexible Measurable Motivating Suitable Understandable Achievable

5. What is the Balanced Scorecard? The Balanced Scorecard is a set of measures that are directly linked to the company’s strategy. It directs a company to link its own long-term strategy with tangible goals and actions.

7. Exhibit 6-2: The Balanced Scorecard Vision and Strategy Financial ‘ To succeed financially, how should we appear to our shareholders?” Customer “ To achieve our vision, how should we appear to our customers?” Internal Business Process “ To satisfy our shareholders and customers, what business processes must we excel at?” Learning and Growth ‘ To achieve our vision, how will we sustain our ability to change and improve?”

9. Generic Strategies Low-cost Leadership Differentiation Focus

20. Innovation Strategy Involves creating a new product life cycle, thereby making similar existing products obsolete

22. Ex. 6-7: Vertical and Horizontal Integrations Textile producer Textile producer Shirt manufacturer Shirt manufacturer Clothing store Clothing store Acquisitions or mergers of suppliers or customer businesses are vertical integration Acquisitions or mergers of competing businesses are horizontal integrations

25. Turnaround Strategy Involves a concerted effort over a period of time to fortify a firm’s distinctive competencies, returning it to profitability

26. Turnaround Strategy A turnaround strategy is done through Cost reduction Asset reduction