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This is a stability strategy, which is a corporate strategy in which an organization continues to do what it is currently doing. Managers need strategies that address declining performance. These strategies are called renewal strategies, of which there are two main types. A retrenchment strategy is a short-run renewal strategy used for minor performance problems * A competitive strategy is a strategy for how an organization will compete in its business(es). For a small organization in only one line of business or a large organization that has not diversified into different products or markets, its competitive strategy describes how it will compete in its primary or main market. For organizations in multiple businesses, however, each business will have its own competitive strategy that defines its competitive advantage, the products or services it will offer, the customers it wants to reach, and the like * One of the leading researchers in strategy formulation is Michael Porter of Harvard’s Graduate School of Business. He proposed that managers must choose a competitive strategy that will give it a distinct advantage by capitalizing on the strengths of the organization and the industry it is in. His three competitive strategies are cost leadership, differentiation, and focus. * The final type of strategies managers use are the functional strategies, which are the strategies used by an organization’s various functional departments to support the competitive strategy * The basic idea of benchmarking is that managers can improve quality by analyzing and then copying the methods of the leaders in various fields * Planning involves two important aspects: goals and plans. Goals (objectives) are desired outcomes or targets. They guide managers’ decisions and form the criteria against which work results are measured. Plans are documents that outline how goals are going to be met. They usually include resource allocations, budgets, schedules, and other necessary action
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