Strategy

Share
Added value The difference between the market
value of the output and the cost of the inputs to the
organisation.
Benchmarking The comparison of practice in other
organisations in order to identify areas for improvement. Note that the comparison does nothave to be
with another organisation within the same industry,
simply one whose practices are better at a particular
aspectof the task or function.
Collusive alliances Co-operative strategies in which
firms seek to share information in order to reduce
competition or raise prices. They are illegal in many
countries.
Consistency Strategy evaluation criterion associated
with the strategy being in agreement with the objectives of the organisation.
Business process re-engineering The replacement
of people in administrative tasks by technology,
often accompanied by delayering and other organisational change.
Core resources The important strategic resources of
the organisation, usually summarised as architecture,
reputation and innovation.
Disruptive innovation This takes an existing market
and identifies existing technologies that will offer
simpler, less expensive products or services than
have been offered previously
Environment Everything and everyone outside the
organisation: competitors, customers, government,
etc. Note that ‘green’ environmental issues are only
one part of the overall definition.
Division A separate part of a multi-product company
with profit responsibility for its range of products.
Each division usually has a complete range of the
main business functions, such as finance, operations
and marketing.
Experience curve The relationship between the unit
costs of a product and the total units ever produced
of that product, plotted in graphical form, with
the units being cumulative from the first day of
production.
Innovation  The generation and exploitation of new
ideas. The process moves products and services,
human and capital resources, markets and production processes beyond their current boundaries and
capabilities.
Kaizen The process of continuous improvement
in production and every aspect of value added
( Japanese).
Mission Outlines the broad general directions that
the organisation should and will follow and briefly
summarises the reasoning and values that lie behind
it.
Multidivisional organisation structure As the product range of the organisation becomes larger and
more diverse, similar parts of the product range are
grouped together into divisions, each having its own
functional management team. Each division has
some degree of profit responsibility and reports to
the headquarters, which usually retains a significant role in the development of business strategy.
Sometimes this is shortened to M-Formstructure.
Market options matrix Identifies the product and
the market options available to the organisation,
including the possibility of withdrawal and movement into unrelated markets.
Portfolio matrix Analyses the range of products possessed by an organisation (its portfolio) against two
criteria: relative market share and market growth. It
is sometimes called the growth-share matrix.
Prescriptive change The implementation actions
that result from the selected strategy option. A
defined list of actions is identified once the strategy
has been chosen.
Problem children Products with low relative market
shares in high-growth markets.
Strategic fit The matching process between strategy
and organisational structure.
Strategic groups Groups of firms within an industry
that follow the same strategies or ones that have similar dimensions and which compete closely.
Seven S Framework The seven elements of superordinate goals: strategy, structure, systems, skills,
style and staff. In some later versions, the first item
was replaced by share values.
Scenario Model of a possible future environment for
the organisation, whose strategic implications can
then be investigated.
Strategic alliances Co-operative strategies where
organisations combine or share some of their
resources without involving an exchange of shares or
other forms of joint ownership.
Vision A challenging and imaginative picture of the
future role and objectives of an organisation, significantly going beyond its current environment and
competitive position. It is often associated with an
outstanding leader of the organisation.
Zero-sum game Has no pay-off because the gains of
one player are negated by the losses of another.