Chapter 3- strategic management and the entrepreneurs
Intellectual capital- it’s a key source of a company’s competitive advantage that is comprised of human capital, structural capital, and customer capital.
• Human capital – the talent, skills, and abilities of a company’s workforce.
• Structural capital- the accommodated knowledge and experience that a company possesses. Software, patent or experience.
• Customer capital- the established customer base, positive reputation, ongoing relationship and goodwill a company builds up over time with its customer.
Strategic management- it’s the process of developing a game plan to guide a company as strives to accomplish its, vision, mission, goal, and objectives and to keep it from straying off course
Competitive advantage- the aggregation of factors that sets a small business apart from its competitors and gives it a unique position in the market ...view middle of the document...
• Weaknesses- negative internal factors that inhibit the accomplishment of a company’s mission, goals, and objectives.
Step 3- scan the environment for significant opportunities and threats facing the business
• Opportunities- positive external factors that a company can exploit to accomplish its mission, goals, and objectives.
• Threats - negative external factors that inhibit a company’s ability to achieve its mission, goals, and objectives.
Step 4- identify the key factors for success in the business
Step 5- analyze the competitors.
• Competitive profile matrix- a tool that allows business owners to evaluate their company against major competitors on the key success factors for the market.
• Knowledge management- the practice of gathering organizing and disseminating the collective wisdom and experience of a company’s employees for the purpose of strengthening its competitive position.
Step 6- create company goals and objectives
➢ Goals- the broad, long- range attributes a business seeks to accomplish, they tend to be general and sometimes even abstract.
➢ Objectives- more specific targets of performance, commonly, addressing areas such as profitability, and productivity, growth and other key aspects of a business.
Step 7- formulate strategic options and select the appropriate strategies
➢ Strategy- a roadmap of the actions on entrepreneur draws up to fulfill a company’s mission, goals, and objectives.
3 strategic options- 1. Cost leadership
Step 8- translate strategic plans into action plans.
Step 9- establish accurate controls.
➢ Balanced scorecards- a set of measurements unique to a company that includes both financial and operational measures and gives a quick yet comprehensive picture of the company’s overall performance.
1. Write briefly about the strategic management process.
2. Write short notes on- cost leadership, focus, differentiation, generation X, strategy, knowledge management, competitive advantage, core competencies.