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1.4. Answer the questions

1. How can a company improve its strategic posture?

2. What is buyer selection?

3. How often do all the buyer groups sell to enjoy equal power?

4. In which case can a company sell to powerful buyers and still come away with above-average profitability?

5. Why does Emerson Electric earn high return?

6. What if the company lacks a low-cost position or unique products?

7. Strategic management is a field that deals neither with the major intended nor with emergent initiatives, is it?

8. What is often used to evaluate the overall performance of the business and its progress towards objectives?

9. Which docuument includes all stakeholders?

10. What is Strategic management as an ongoing process designed for?

1.5. Complete each sentence with one of the following words:

emergent intended potent vulnerable

posture self defeating

1. A company can improve its strategic ( ) by finding suppliers or buyers who possess the least power to influence it adversely.

2. Selling to everyone is ( ) because the > sales it achieves, the more ( ) it becomes.

3. The company may have to muster the courage to turn away business and sell only to less ( ) customers.

4. Strategic management is a field that deals with the major ( ) and ( ) initiatives.

1.6. Match the words with the definitions:

  1. mitigating

A. minimizing the threat of backward integration

  1. awesome

B. terrifying customers’ power

  1. ready-to-wear

C. being worn without significant alteration

  1. falling margins

D. reducing down in value, etc.

2. Strategic Management as "identification

2.1. Read the text.

Strategic Management can be defined as "identification of the organization purpose and the plans and actions to achieve the purpose. It is that set of managerial decisions and actions that determine the long term performance of a business enterprise. It involves formulating and implementing strategies that will help in aligning the organization and its environment to achieve organizational goals."

Buyer selection has been a key to the success of National Can and Crown Cork & Seal. They focus on the segments of the can industry where they can create product differentiation, minimize the threat of backward integration, and otherwise mitigate the awesome power of their customers. Of course, some industries do not enjoy the luxury of selecting “good” buyers.

As the factors creating supplier and buyer power change with time or as result of a company’s strategic decisions, naturally the power of these groups rise or declines. In the ready-to-wear clothing industry(specified to), as the buyers (department stores and clothing stores) have become more concentrated and control has passed to large chains, the industry has come under increasing pressure and suffered falling margins. The industry has been unable to differentiate its product or engender switching costs that lock in its buyers enough to neutralize these trends.