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Strategic Management > Exam 1 > Flashcards

Exam 1 Flashcards

Prep Material (53 cards)

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1
Q

Competitive Advantage

A

Firm use strategy to create:

1) Superior value for customers
2) Products hard to duplicate
3) Brand to costly to imitate

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2
Q

Strategic competitiveness

A

When firm successfully uses a formal and value creating strategy

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3
Q

Strategy

A

Set of commitments and actions to preform task efficiently and gain competitive advantage

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4
Q

Above-Average Returns

A

More than the investors expected from similar return of same amount

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5
Q

Risk

A

Uncertainty about economic gains and losses from investments

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6
Q

Average Returns

A

Investments that are just like others with the same amount of risk

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7
Q

strategic management process

A

Set of

1) Commitments
2) Decisions
3) Actions

required for strategic competitiveness and earn above-average returns

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8
Q

Hypercompetition

A

Firms that create:
1) Instability
2) Disruption
to the competitive landscape

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9
Q

global economy

A

Where Goods and Services move freely across geographic borders

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10
Q

Globalization

A

Large number of firms competing against each other with Goods and Services

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11
Q

Perpetual innovation

A

describe how rapidly and consistently new, technologies replace older ones

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12
Q

Knowledge

A

1) information
2) intelligence
3) expertise

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13
Q

Strategic flexibility

A

Set of capabilities to deal with demands and opportunities in uncertain competitive environment

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14
Q

Resources

A

Inputs to production process

1) Capital Equipment
2) Skills of individual employee
3) Patents
4) Finances
5) Talented Managers

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15
Q

Capability

A

Capability to perform a task

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16
Q

Core competencies

A

Capabilities serving as sources of competitive advantage

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17
Q

Vision

A

Plans for where the firm wants to achieve

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18
Q

Mission

A

Specifies the business in which the firms intends to compete

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19
Q

Stakeholders

A

Investors

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20
Q

Strategic leaders

A

people from different location using the strategic management process

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21
Q

Organizational culture

A

refers to the complex set of ideologies, symbols, and core values of the firm

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22
Q

What are the two Major Model used in Ch1

Study These Flashcards
A

(I/O) model of above-average returns

The Resource-Based Model of Above-Average Returns

23
Q

The core assumption of the I/O model is that?

Study These Flashcards
A

the firm’s external environment has more influence on the choice of strategies than internal resources

24
Q

What is the I/O Model used for?

Study These Flashcards
A

I/O model is used to understand the effects on deciding what strategies to use in competing against rivals.

25
What are the steps for Strategic management process
Analysis, Strategy, Performance
26
What are the steps for I/O Model of Above-Average Returns
``` The External Environment An Attractive Industry Strategy Formulation Assets and Skills Strategy Implementation Superior Returns ```
27
What is the purpose of strategic group
Analyzing an industry’s competitive structure. competition, positioning, and the profitability of firms competing within an industry
28
Five Forces are?
1) Power of Supplier 2) Power of Buyer 3) Threat of new Entrants 4) Threat of substitute products 5) Rivalry among competing firms
29
Factors that drive Threat of new Entrants & substitute
``` Economies of Scale Product Differentiation Capital Requirements Switching Costs Access to Distribution Channels Cost Disadvantages Independent of Scale Government Policy ```
30
3 major parts of external environment
general environment industry environment competitor environment
31
Limitation of Five Forces
* Ignores internal factors * Assumes zero-sum game * doesn't account for performance diff * No other External factors * static analysis
32
PESTLE Analysis
``` Political Economic Social Technological Legal Environmental ```
33
Difference between External & Internal Analysis?
External (Opportunities, Threats) Internal (Strengths, Weaknessess
34
Origin of the term Strategy
Strategos(Greek) - Art of the general
35
2 Important type of Decisions?
Where do we compete - Corp Strategy | how to we compete - Business Strategy
36
Take away from Alaska Gold Mine
Strategy involve trade-offs, uncertainty, competition Drivers are External Environment & resources learning how to be a Team player
37
What Strategy is not
Big general goals "We want to win" Operational effectiveness, competitive benckmarking, etc. Description of what the company wants
38
I/O Model Assumptions
External Environment imposes pressures resources cause similar strategies Resource differences among competitors are short-lived
39
The Resource-Based Model
Building Competitive Advantage: 1) Resources 2) Capability 3) Core Competence
40
List 5 business-level strategies
1. Cost Leadership 2. Differentiation 3. Focused Cost Leadership 4. Focused Differentiation 5. Integrated Cost Leadership/Differentiation
41
Cost(Leadership)-based Advantage
Provide Goods & Service than competitors with equivalent Willingness to Pay (WTP) Lower Total delivered cost (TDC)
42
Differentiation-based advantage
Provides unique product/service at a premium price. Creates more customer-perceived differentiation increase Willingness to Pay WTP WTP must be greater than Total delivered cost TDC
43
Hybrid strategy(integrated cost leadership & differentiation
1. Stuck in the middle 2. differentiation can help understand 3. Org Barrier 4. Factors to succeed: a) Structural Separation b) Increase effort & complexity
44
Gucci Case Takeaway
Repositioning(Doing a Gucci) - Turnover was becuz tight fit amongst various activities Differentiation Strategy: selling more items and the brand (Gucci man) Role of top management teams: working well as a team (Dom-Tom dream team)
45
Resources
What a firm HAS Tangible: Fin Physical Org Intangible: Human, Social Capital, Knowledge, Corp culture, reputation
46
Capabilities
What a firms DOES
47
Competencies
Resources + Capabilities working together
48
Value Chain
Shows sequence activities firms engages in when transforming inputs and outputs
49
What are the 2 types of Activities?
Primary - Directly add value | Support - Indirectly add value
50
What does Value do?
Explains how firms values creation breaks down Helps identify relevant resources and capabilities
51
Resources/Capabilities costly to imitate
History Time to do it right complexity Copyright, Trademarks, patents
52
VRIN Framework
``` Valuable Rare Difficult to imitate Without substitutes Sustainable competitive advantage ```
53
eHarmony Case
Strong fit between external positioning and internal resources Resources and Capabilities difficult to imitate

Strategic Management (1 decks)

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