Chapter 1 Flashcards
(29 cards)
Define Strategy
what if this results in superior performance over others
Set of related actions that managers take to increase their company’s performance
If this causes superior performance it is a competitive advantage
Define Strategic leadership
This managing the process that you make strategies in order to obtain a competitive advantage
What is the strategy formulation process?
This is when you only select strategies after a thorough analysis of the companies external and internal environement
What is it called to put a strategy into action
Strategy implementation
What are the 4 determinants of shareholder value?
- Effectiveness of strategies which influence
- Proitibaility (ROIC) and Profit Growth (3)
which in influence (4) shareholder value
What is the capital that cannot be recovered if a company fails and goes bankrupt
Risk capital,
which yeah, is equity capital that the stockholders should not expect toes again if it goes under
What are the returns that shareholders earn from purchasing shares in a company
What are the two sources of these returns?
Shareholder value
- capital appreciation in the value of a company’s shares
- dividend payments
Define profitability
Really its how efficiently and effective managers use their budgets to make more money
So ROIC is a good measurement
What is ROIC
Return on invested capital
What are the two principal drivers of shareholder value?
Profitability and profit growth
What is normal and sustained competitive advantage?
This is when profitabliity of a company is greater than the average, and sustained means that it can sustain this run for a number of years such as walmart for the past couple decades
What are the key parts of a business model?
- who are customers
- define and differentiate product
- how create value
- how acquire customers
- how to produce goods/services
- how to lower costs
- How to deliver
- how to organize internally
- configure resources
- achieve high profitibilatiy
- GROW profitbaility
What is the difference between general and functional managers?
General managers look over entire company performance for major divisions, whereas functional managers ensure that tasks are being done via supervision and whatnot. So basically general is more macro
What is a multidivisional company?
This is not a business with departments, this is when a company has created separate self-contained divisions to manage each of themselves so like Apple may have a retail division, product dev division, etc
What is a self contained division that provide a product or service for a particular market
This is a business unit, so something like finance, purchasing, production, marketing, etc all under a roof of say Electric Car alongside the iPhone business unit at Apple
Am I a functional or general manager?
As marketing manager I am more of a general manager, and then if we had say a customer support manager, they’d likely work under me
What are the 5 main steps to the formal strategic plannign process?
- Select the corporate mission and major corporate goals
- Analyze the external enviro to see if theirs any threats or opportunities
- Analyze internals to identify strengths or weaknesses
- Select starts that build on organizations strengths, and correct weaknesses to seize opportuntniitese or defend against threats, all in line with goals and mission of company
- Implement!
What is the missions statement?
First component of strategic management process.
Provides context for which the company to operate and what it strives to do.
What are the vision and values of company?
Vision is how the company sees it’s future state and achievements
Values are how the business and employees whnt to conduct themselves to achieve the company mission
Well made goals have what 4 characteristics?
- Precise and measurable
- Address critical issues, not fluff
- Challenging, but realistic to meet
- They are time constrained
What are three enviros that should be analyzed with extneral analysis?
- industry environment
- country or national environment
- wider socioeconomic or macroenvironemnt
What are the 4 main categories of possible strategies that can make a competitive advantage?
- Functional level
- imrpove operations such as marketing or manufacturing - Business level
- Posiitiong, cost leadership, differentionak, etc - Global strategies
- Expand! - Corporate level
- WHich businesses should we be in? Such as roots going to airline, shouldn’t have been in airline ha
What is the feedback loop?
never ending loop between strategy implementation and assessment for next strategy
How to emergent and deliverable strategies work?
So a deliberate srategy is one that is planned and goes accordingly
An emergent strategy is one that was planned, had an unpredicted change that it survived and then flourished, and became and emergent strategy facilitated by the unplanned/autonomous action of lower-level managers to become the realized strategy
An example of emergent is when Honda went to sell in America, and unplanned untraditional retailers such as Sears wanted to sell them, it happened and was a great success that didn’t alienate serious bikers (maybe)
