Final Flashcards
(44 cards)
1
Q
What is strategy
A
integrated and coordinated set of commitments and actions that an organization takes to attain its ultimate goals
2
Q
Themes of strategy
A
- creative process
- recursive
- implies trade off
3
Q
Goal of industry analysis
A
identify the most important factors that are affecting your industry
4
Q
Porter’s + 3
A
- Bargaining power of suppliers
- threat of new entrants
- threat of substitutes
- bargaining power of buyers
- Rivalry
- threat of complementors
- new strategies
- social forces
5
Q
When is intensity of rivalry strong
A
- competitors numerous and equally balanced
- high exist barriers
- slow industry growth
- high fixed or storage costs
- little differentiation
- low switching costs
- overcapacity
- long history of bitter rivalry
6
Q
Threat of substitutes highest when
A
- low switching costs
- substitute price is lower
- substitute quality and performance capability are equal to or greater than competition product
7
Q
Key questions for managers in industry analysis
A
- what is our firm’s industry
- how stable are these characteristics
- what are the characteristics of the industry
- how can we counter the negative characteristics or turn them to our advantage
8
Q
Resource partitioning theory
A
- separate into core and peripherary
- core: generalist
- periphere: specialist, niche firms
9
Q
Generalist firm identity
A
- automated process
- large volumes
- global
- commoditized
- standard/low quality
10
Q
Specialist firm identity
A
- craftsmanship
- small volumes
- local
- authentic
- high-quality
11
Q
Value chain
A
- total of primary and support value-adding activities by which a company produces, distributes and markets a product/service
12
Q
Resources and capabilities
A
- Resources:
- inputs that firms use to create goods
- Capabilities:
- skill in using its resources to create goods and services
- core competency: source of competitive advantage
13
Q
Four criteria for a sustainable advantage: (VRIO)
A
- valuable
- rare
- costly to imitate
- exploitable by the organization
14
Q
Outsourcing vs. offshoring
A
- outsourcing: sourcing the function of a value chain activity from another company
- Offshoring: taking activity from high cost country to low cost country
15
Q
diseconomies of scale
A
- bureaucracy
- high labour costs
- inefficient operations
16
Q
3 market trajectories
A
- deterioration trap
- dominant low cost low benefit firm that swallows market share
- eg. zara
- proliferation trap
- multiple threats which create new price -benifit positions, surrounding and eroding the firms products’ uniquenss
- eg. hilton
- escalation trap
- rising benefits for the same or lower price
17
Q
How to escape market traps
A
- destroy trap
- escape trap
- turn trap to advantage
18
Q
4 questions of value curve
A
- What factors has the industry taken for granted that should be eliminated
- what factors should be reduced below industry standard
- what factors never offered should be added
- what factors should be raised well above the industry standard
19
Q
key characteristics of disruptive innovators
A
- introduce non-standard functional attributes that attract new customers in a niche market
- perform in an inferior manner on attributes that mainstream customers value
- make steady progress until it meets the performance standards of mainstream market
20
Q
Traditional markets
A
- Structured by supply-side economies of scale
- Negative feedback mechanisms often prevent monopolies from emerging: diseconomies of scale limit the growth of largest firms; small firms can flourish in niche markets
- Often result in oligopolies
21
Q
Network markets
A
- Are structured by demand side economies of scale: customers want a product because it is widely used
- Positive feedback mechanisms result in the strong becoming stronger, and the weak becoming weaker
- Tend toward monopolies, “winner take all” markets
22
Q
Customer perceived value
A
- Network independent value- value provided by the product independently of the network (ex. The clock or camera on your phone)
- Direct network effect- value provided by the cumulative number of users in the network (ex. Number of phone users)
- Indirect network effect- value added by complementary products or services (ex. Number of apps available on a smartphone)
23
Q
Competition in network markets
A
- Being a first mover in a network is not necessarily decisive
- Countless first movers have failed
- Supply side and demand side economies of scale can add up, accelerating growth
24
Q
Tradeoffs in network effects
A
- evolution vs. revolution
* openness vs. control
25
What is the evolution vs. revolution trade off
* ensure backwards compatibility
| * swipe slate clean
26
What is the openness vs. control trade off
* controlled network strategies
* control migration
* performance play
* Open:
* open migration
* discontinuity
27
Types of diversification
* related
| * Unrelated
28
Vertical Integration
backwards
| forwards
29
advantages of vertical integration
* build entry barriers
* facility investment in highly specific assets that would be too risky for either the buyer or supplier to make otherwise
* issues supply and distribution
* protect quality
* improve internal scheduling
* protects proprietary information
30
Disadvantages of vertical integration
* costs disadvantage of internal supply purchasing
* remaining tied to obsolescent technology
* lack or strategic flexibility in times of chaining technology or demand
* increased costs of internal coordination
31
Types of cooperative strategies
* equity strategic
* Non-equity strategic
* joint venture
32
Choosing between alliance and acquisition synergies
* Modular
* non equity
* Sequential
* equity
* Reciprocal
* acquisition
33
advantages of alliance
* improve operations
* enhance competitive conditions
* facilitate market entry and exist
34
Questions in screening partners for alliances
* strategic fit
* resource and finical fit
* cultural fit
* structure, systems and processes fit
* additional fit criteria
35
approaches to manage cooperative strategies
* cost minimization approach
| * opportunity maximization approach
36
key principles of network advantage in alliances
* links trans information and power
* not evenly distributed
* success comes to firms that actively manage their alliance portfolios
37
three opportunities to create shared value
* reconceive products to meet unmet needs
* redefine productivity in the value chain
* enable cluster development
38
Elements of the value chain
Primary
- Inbound logistics
- Operations
- Outbound Logistics
- Marketing and sales
- Service
Secondary
- Firm infrastructure
- Hr
- Technology development
- Procurement
39
Triangle of Corporate strategy
Resources
Organization
Businessess
40
Economies of scope derived from
sharing activities (across business units)
Transferring resources(across business units)
41
Outsourcing advantages
efficient sub contractors reduces overall costs
allows for the concentration of available resources in core activities
firm becomes more flexible and responsible
42
Outsourcing disadvanatges
failure to learn from outsourced activity
too much dependence on a single supplier
danger of outsourcing value add activities that enhance competitive advantage
43
3 generic strategies
Low cost
Differentiation
Focused
44
Why do market leader fail to respond to disruptive innovations
1. Companies depend on customers and investors
2. small markets don't solve growth needs of large companies
3. markets that don't exist cannot be analyzed
4. organizations capabilities defines its disabilities
5. technology supply may not equal market demand
