| Planning | Identifying and selecting appropriate goals and courses of action; one of the four principal functions of management.
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| Strategy | A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.
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| Mission statement | A broad declaration of an organization's purpose that identifies the organization's products and customers and distinguishes the organization from its competitors.
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| Division | A business unit that has its own set of managers and functions or departments and competes in a distinct industry.
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| Divisional managers | Managers who control the various divisions of an organization.
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| Corporate-level plan | Top management's decisions pertaining to the organization's mission, overall strategy, and structure.
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| Corporate-level strategy | A plan that indicates in which industries and national markets an organization intends to compete.
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| Business-level plan | Divisional managers' decisions pertaining to divisions' long-term goals, overall strategy, and structure.
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| Business-level strategy | A plan that indicates how a division intends to compete against its rivals in an industry.
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| Function | A unit or department in which people have the same skills or use the same resources to perform their jobs.
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| Functional managers | Managers who supervise the various functions, such as manufacturing, accounting, and sales, within a division.
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| Functional-level plan | Functional managers' decisions pertaining to the goals that they propose to pursue to help the division attain its business-level goals.
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| Functional-level strategy | A plan that indicates how a function intends to achieve its goals.
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| Time horizon | The intended duration of a plan.
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| Scenario planning | The generation of multiple forecasts of future conditions followed by an analysis of how to respond effectively to each of those conditions; also called contingency planning.
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| Strategy formulation | Analysis of an organization's current situation followed by the development of strategies to accomplish its mission and achieve its goals.
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| SWOT analysis | A planning exercise in which managers identify organizational strengths (S), weaknesses (W), environmental opportunities (O), and threats (T).
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| Diversification | Expanding operations into a new business or industry and producing new goods or services.
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| Related diversification | Entering a new business or industry to create a competitive advantage in one or more of an organization's existing divisions or businesses.
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| Synergy | Performance gains that result when individuals and departments coordinate their actions.
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| Unrelated diversification | Entering a new industry or buying a company in a new industry that is not related in any way to an organization's current businesses or industries.
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| Global strategy | Selling the same standardized product and using the same basic marketing approach in each national market.
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| Multidomestic strategy | Customizing products and marketing strategies to specific national conditions.
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| Exporting | Making products at home and selling them abroad.
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| Importing | Selling at home products that are made abroad.
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| Licensing | Allowing a foreign organization to take charge of manufacturing and distributing a product in its country or world region in return for a negotiated fee.
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| Franchising | Selling to a foreign organization the rights to use a brand name and operating know-how in return for a lump-sum payment and a share of the profits.
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| Strategic alliance | An agreement in which managers pool or share their organization's resources and know-how with a foreign company and the two organizations share the rewards and risks of starting a new venture.
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| Joint venture | A strategic alliance among two or more companies that agree to jointly establish and share the ownership of a new business.
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| Wholly owned foreign subsidiary | Production operation established in a foreign country independent of any local direct involvement.
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| Vertical integration | A strategy that allows an organization to create value by producing its own inputs or distributing and selling its own outputs.
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| Low-cost strategy | Driving the organization's costs down below the costs of its rivals.
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| Differentiation strategy | Distinguishing an organization's products from the products of competitors in dimensions such as product design, quality, or after-sales service.
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| Focused low-cost strategy | Serving only one segment of the overall market and being the lowest-cost organization serving that segment.
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| Focused differentiation strategy | Serving only one segment of the overall market and trying to be the most differentiated organization serving that segment.
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