Exam 1 Flashcards
(34 cards)
What are the elements of strategy proposed by Hambrick and Fredrickson?
Arenas, Vehicles, Differentiators, Staging, Economic Logic
According to Hambrick and Fredrickson, what several factors influence the strategic element of staging?
Resources, urgency, achievement of credibility, pursuit of early wins.
Which five characteristics define the arena a company plays in according to Hambrick and Fredrickson?
Product categories, market segments, geographic areas, core technologies, value creation stages.
Name two case studies from Hambrick and Fredrickson.
The New York Times achieves economic logic by offering a superior product at a premium. GKN Sinter Metals leverages systemic advantages to maintain low production costs.
According to Porter’s, “CEO as a Strategist”, what three key principles underly strategic positioning?
The creation of a unique and valuable position involving a different set of activities. Making strategic trade-offs. Ensuring that strategic activities fit or reinforce one another.
Generally speaking, what does Porter say is the role of the CEO as it pertains to strategy?
The CEO is responsible for providing the discipline required to sustain a unique position over time.
According to Porter, if a business’s activities are easily imitated, how else can it be distinctive?
It can perform those activities in ways that are different from competitors.
Broadly speaking, what are three ways Porter says businesses can create a unique position.
Serve few needs of many customers. Serve many needs of a few customers. Serve many needs of many customers in a narrow market.
According to Rumelt, what is the difference between a list of things to accomplish and strategy?
Strategy is not merely a list of things to accomplish. Strategy requires a business to focus resources and attention on one or a few pivotal objectives that lead to a cascade of favorable outcomes.
According to Rumelt, what is the kernel of a good strategy?
Diagnosis, Guiding Policy, Coherent Actions
According to Rumelt, what is one company that exemplifies the kernel model well, and how did it do that?
Nvidia. Diagnosis: 3-D chip industry was advancing quickly, with new chips coming out every 18 months. Guiding Policy: Nvidia’s objective is to come out with a new chip every 6 months, 3x the industry average. Coherent Actions: Nvidia established 3 development teams whose timelines overlapped, and invested in simulation and emulation facilities to avoid delays.
In “Closing the Gap Between Strategy and Execution”, what does Sull say is the best strategic framework?
It is best to approach strategy as a loop because a loop accommodates a more iterative and adaptive strategy.
What are the four discussion types Sull says enable the loop approach to strategy?
Informal and formal. Short and long. One on one. Group.
What does Sull say are the six steps to the loop model.
Conduct research and develop a view, but retain a tone of inquiry rather than advocacy. Sense-making discussions. Start making sense. Make decisions using rules as a way to choose among good options. Make it happen using promises, which are public, voluntary, actively negotiated, explicit, and linked to corporate priorities. Finally, make revisions by exploring the difference between what was expected and what happened.
What is the insight deficit?
Something your company sees but no one else does. It is foundational to competitive advantage.
In Harris and Tayler’s, “Don’t Let Metrics Undermine Your Business”, what is the surrogate problem.
When employee’s performance is measured by certain metrics rather than the extent to which they are contributing to the company’s strategy, metrics become a surrogate for strategy. This can lead to perverse incentives.
According to Gadiesh and Gilbert, what are profit pools?
The pattern of profit concentration in an industry is often different from the pattern of revenue concentration in an industry. A profit pool is the total profits earned in an industry at all points along the industry’s value chain.
According to Gadiesh and Gilbert, what does a profit pool map show?
A profit pool map shows the share of margin (vertical) compared with the share of revenues (horizontal) for each revenue-earning activity in a value chain.
According to Gadiesh and Gilbert, what are choke points? What is an example of a chokepoint?
Chokepoints are particular business activities that control the flow of profits throughout an industry. An example of a chokepoint is what Microsoft tried to generate when it attempted to acquire Intuit in the 1990s. It would have been able to control an important platform for online banking, meaning it would take a share of every banking transaction performed over the internet.
What are two examples of companies taking advantage of profit pools, according to Gadiesh and Gilbert?
Dell identified a valuable profit pool in selling PCs using a DTC model rather than retail. Dell wanted to grow revenues, so it transitioned to the retail market. In retail, Dell couldn’t make the same margins, and so it failed financially.
Anheuser Busch transitioned to canning their beers and scaling their premium business, recognizing the profit pools that existed in selling premium beers. By achieving rapid scale, they created a barrier to entry for other businesses.
According to Bingham, Eisenhardt, & Furr, “Which Strategy When?” (BE&F), what are the 3 types of strategies? In each strategy model, how are resources utilized?
Position Strategies, Leverage Strategies, and Opportunity Strategies.
A position strategy depends on tightly interlocked, reinforcing mundane resources. A leverage strategy depends on loosely combined, unique, strategic resources. An opportunity strategy depends on loosely combined resources, applied using a few strategic processes and simple rules designed to capture new opportunities.
What are the 3 things Bingham, Eisenhardt, & Furr say businesses should consider in choosing their strategy?
Circumstances, Resources, and Combination of Resources.
According to Heracleous and Wirtz, what is Singapore Airlines able to achieve that Porter would say is an “exception to the rule.”
Singapore Airlines is able to achieve a dual strategy, in which there is no trade-off between low cost and quality.
Which four paradoxes, according to H&W, does Singapore Airlines manage in achieving its dual strategy?
Providing excellent service in a cost-effective manner. Achieving innovation in both a centralized and decentralized way. Being a technology leader and follower. Achieving both standardization and personalization in its approach to customer service.
