Chapter 14 Flashcards
(31 cards)
What is Strategy?
Strategy is a plan to create value for customers while standing out from competitors.
What is Core Competence?
Core competence is what a company does best to take advantage of opportunities and avoid threats.
What are the Five Forces in Competitive Analysis?
The Five Forces: Existing customers, potential new companies, buyer power, supplier power, and substitutes.
. What is Value Leadership (Product Differentiation)?
Offering unique, superior products that customers love, leading to brand loyalty and higher prices.
What is Cost Leadership?
Offering products at lower costs than competitors through efficiency and waste reduction
What is Economies of Scale?
Reducing costs by producing large volumes of a product, saving money in the long run.
What is Economies of Scope?
Saving money by using the same resources to produce different products.
What is the First Step in Selecting a Strategy?
Identify the problem: decide if the company should focus on being cheaper (cost leadership) or better (value leadership)
What Should You Analyze After Identifying the Problem?
Gather and analyze information about competitors, customers, and product details.
Why is Predicting the Future Important?
Predicting future trends helps companies stay ahead, especially for fast-changing products like technology.
What Happens After Making a Decision on Strategy?
Implement the strategy, improve internal processes, and reduce errors to increase quality and speed.
What are Key Success Factors (KSFs)?
Activities that are necessary for the successful execution of a strategy.
What is Reengineering?
Redesigning business processes to improve efficiency, cost, speed, and customer satisfaction.
What is the Balanced Scorecard?
A tool that translates an organization’s strategy into performance measures to help execute the strategy.
What Does the Financial Perspective of the Balanced Scorecard Focus On?
Measures how profitable the strategy is and the value it creates for shareholders.
What Does the Customer Perspective of the Balanced Scorecard Focus On?
Measures how well the company is meeting customer needs and satisfying target markets
What Does the Internal Business Perspective Focus On?
Focuses on internal operations that create value for customers, improving financial results.
What Does the Learning and Growth Perspective Focus On?
Focuses on the capabilities and skills the company needs to grow and improve.
What is Needed for Successful Balanced Scorecard Implementation?
Top management commitment and clear communication to all employees
What Makes a Good Balanced Scorecard?
Tells a story of strategy with cause-and-effect links, motivates managers, and focuses on critical measures.
What Should Managers Avoid When Using the Balanced Scorecard?
Don’t assume cause-and-effect is always correct and don’t focus on improving everything all the time.
Why Should Both Costs and Benefits Be Considered in a Balanced Scorecard?
Costs can often be overlooked, but both costs and benefits matter for making good decisions.
Why Should Non-financial Measures Be Included?
Non-financial measures, like customer satisfaction, are just as important as financial ones
Why Should Managers Avoid Too Many Measures?
Focusing on too many measures can be confusing and less effective.
