Ch8 Business Strategy

Question 1

Corporate strategy

Answer 1

Longterm plan for whole corp to achieve a goal

Question 2

How to establish corporate strategy

Answer 2

Strategic analysis (strength, weakness, resources, competitive environment, objectives)

Question 3

Strategic management

Answer 3

Role of management in setting longterm goals and cross functional decisions to reach the goals

Question 4

Strategic manegemnt stages

Answer 4

1. Strategic analysis (where r u now)
2. Strategic choice (identifying & choosing longterm decisions)
3. Strategic implementaton (allocating/managing resources for the change and evaluating succes )

Question 6

Strategic analysis

Answer 6

1. Determine xurrent position
2. How it can be affected in future
3. How it can respond to future

Question 7

Strategic choice

Answer 7

Evaluting option of decisions

• must choose achievable, affordable etc decision

Question 8

Strategic implementation

Answer 8

Planning, allocating and controlling resources for chosen strategy

Question 9

Strategy vs tactics

Answer 9

Strategy is longterm overarching plan (eg increase mkt share)

Tactic is short-term decisions taken in line with the strategy (eg offer discounts)

Question 10

Red ocean strategy

Answer 10

• Compete in existing well defined mkt
• mkt saturated
• must outcompete
• costs more to add value (eg discount)
• product diff OR low cost

EG mcdonalds in fasfood

Question 11

Blue ocean strategy

Answer 11

• create a new untapped market
• low competition (at start esp w patent)
• creating new demand
• high value to customer AND low cost

Question 12

Blue ocean vs red ocean product differentiation

Answer 12

Red ocean differentiates in existing mkt boundaries (eg better packaged burger)

Blue ocean changes boundaries of mkt (eg tesla creating new demand for EVs vs normal cars)

Question 13

Scenario planning

Answer 13

• identifying possible future situations and preparing the business’ response

Question 14

Scenario planning benefits

Answer 14

• forces managment to consider main risks
• forces flexible approach for business
• motivation

Question 15

Scenario planning limitations

Answer 15

• information overload confuse managers
• managers can overficus on some scenarios
• managers might take less risks
• might only consider short term
• takes resources and time

Question 16

SWOT

Answer 16

Strength weaknesses oppurtunities threats

A way for strategic analysis

Question 18

How can business identify Blue Ocean

Answer 18

1. Raise
   (what factor can u raise above industry standard)
2. Reduce
   What factors are a result of competing against eachother and can reduce (eg competitive ads)
3. Eliminate
   - which factors used to compete can be removed (eg noise for tesla)
4. Create
   - which factos should be created which industry never seen (eg charging)

Question 19

PEST analysis

Answer 19

Political/legal
Economic
Social
Technological

Question 20

Porters 5 forces

Answer 20

1. Barrier to entry
2. Power of buyer
3. Power of supplier
4. Threat of substitute
5. Competitive rivalry

Question 22

Core competences

Answer 22

What The firm does uniquely well rather than other firms and CANNOT be copied easily

Eg apple proietary designs lowers substitute threat

Question 23

Core comeptence strategy

Answer 23

Once a core competence has been established the business should exploit it via core products and new mkts

EOS and produxt differentiation possible

Question 24

Ansoff matrix

Answer 24

Twchnique for strategic choice

Matrix represents the 2 main variables in a strategic marketting decision:

1. Market to operate in
2. Product to sell

For market 2 options

• remain
• enter new

For product 2 options

• sell existing
• develop new

Question 25

Market penetration

Answer 25

- goal is High sales - typically via lower proces

Question 26

Mkt penetration adv/disadv

Answer 26

- mkt well established - low well knowns Limitation price wars

Question 27

Profuct development

Answer 27

Innovation via new products (risk of failiure but also blue ocean)

Question 28

Market development

Answer 28

Sell existing product in new mkt Eg overseas

Question 29

Market devolpment good abd limitations

Answer 29

Adv - lots new consumers - less compettion possibly - cheaper labor abroad etc Limitations - bad response possible - communication barrier - equity policy - laws abroad Similar to multinational etc walay poi ts

Question 30

Diversification

Answer 30

Selling unrelated products in new mkt

Question 31

Force field analysis

Answer 31

Technique that involves analysing positive factors (driving forces) and negative factors (restraining forces) for a decision

Question 32

Forcfield analysis evaluation

Answer 32

- forces to consider all variables - but unskilled managers may weigh incorrsctly as strength of a force is subjective - 2 managers can have 2 diff outcomes for same company

Question 33

Decision tree

Answer 33

- a diagramatic analysis of possible decisions with associated ROI, costs and risk of failiure - numerical analysis - allows for dissecting risk to return ratio

Question 34

Decision tree eval

Answer 34

- doesnt ensure accuracy of data - ROI can be subjective - unexpected costs can arrive - can ignore qualitative factors eg worker attitude if done badly