Page 165 - Fundamentals of Management Myths Debunked (2017)_Flat

164 Part 2 • Planning
corporate strategy
An organizational strategy that specifies what Write It 4!
businesses a company is in or wants to be in and If your professor has assigned this, go to the Assignments section of mymanagementlab.com to
what it wants to do with those businesses
complete MGMT 13: Strategic Decision Making (Competitive Marketing Strategy).
growth strategy
A corporate strategy in which an organization
expands the number of markets served or products
offered either through its current business(es) or
through new business(es) Backstory on BENCHMARKING

stability strategy •▪ What: First known benchmarking effort by an American company
A corporate strategy in which an organization •▪ When: 1979
continues to do what it is currently doing
•▪ Who: Xerox
renewal strategy •▪ How: Japanese copier competitors had been traveling around, watching what
A corporate strategy that addresses declining
organizational performance others were doing and then using that knowledge to aggressively replicate their
successes. Xerox’s managers couldn’t figure out how Japanese manufacturers could
competitive strategy sell copiers in the United States for considerably less than Xerox’s production costs.
An organizational strategy for how an organization
will compete in its business(es) •▪ Xerox’s head of manufacturing took a team to Japan to do a detailed study of its
competitors’ costs and processes. SPOILER ALERT! The team found their Japanese
strategic business units rivals light years ahead of Xerox in efficiency.
(SBUs)
An organization’s single businesses that are •▪ Xerox benchmarked those efficiencies and began its strategic turnaround in the
independent and formulate their own competitive copier market.
strategies •▪ And there you have it, the history behind benchmarking!
competitive advantage
What sets an organization apart; its distinctive edge
Today, many organizations use benchmarking practices. For instance, the American Medical
cost leadership strategy Association developed more than 100 standard performance measures to improve medical care.
When an organization competes on the basis of
having the lowest costs in its industry Nissan benchmarked Walmart’s operations in purchasing, transportation, and logistics. And
Southwest Airlines studied Indy 500 pit crews, who can change a race car’s tire in under 15 sec-
differentiation strategy onds, to see how their gate crews could make their gate turnaround times even faster. 17
When an organization competes on the basis of
having unique products that are widely valued by
customers social Media as a strategic Weapon. When Red Robin Gourmet Burgers
launched its Tavern Double burger line, everything about the introduction needed to be
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absolutely on target. So what did company executives do? They utilized social media.
Using an internal social network resembling Facebook, managers in the 460-restaurant
chain were taught everything from the recipes to tips on efficiently making the burgers.
Recognized as an innovator in social media That same internal network has been a great feedback tool. Company chefs have used tips
marketing, KLM Airlines gathers employees at
Amsterdam’s Schiphol airport to form words and suggestions from customer feedback and from store managers to tweak the recipe.
that give live answers to questions asked Successful social media strategies should (1) help people—inside and outside the
by followers on Twitter and Facebook. KLM organization—connect; and (2) reduce costs or increase revenue possibilities or both. As man-
uses social media as a strategic weapon in
achieving its goal of giving customers the agers look at how to strategically use social media, it’s important to have goals and a plan. For
best service in the airline industry. instance, at global banking firm Wells Fargo & Co.,
executives realized that social media tools could be
used to support and develop their business strategy
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and looked for ways to do just that. Now it’s using
several social media tools for a variety of specific
needs that align with company goals.

52 percent of managers say
social media are important/
somewhat important to their
business.

It’s not just for the social connections that
organizations are employing social media strategies.
Many are finding that social media tools can boost
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productivity. For example, many physicians are
EPA/KOEN VAN WEEL/Landov