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final exam prep Flashcards

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1
Q

competitive success factors

A

1) market/customer needs oriented
2) make effective use of valuable competencies
3) new products/services + innovative
4) entrepenarial/opportunisitic mindset

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2
Q

why is a strategy important ?

A

1) define the org
2) focus effort
3) consistency (efficiency + focus, be careful of too much consistency)
4) position or set the direction within the firm’s environment

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3
Q

key strategic questions + process

A

1) strat formulation : analyze the current context
2) analysis : evaluate capabilities + distinctive competence
3) Strat implementation : formulate strategy and implement
4) Performance : control/monitor along the way

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4
Q

when rivalry intensifies

A

numerous equally balanced competitors
slow industry growth
high fixed costs/high storage costs
lack of diff. /low switching costs
high strategic stakes
high exit barriers

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5
Q

buyer powers intense

A

high buyer concentration
available substitute products
buyer well- informed
industry’s products are standardized
buyer is a significant customer
buyer is sensitive to price
low switching costs
supplier’s brand identity is more important

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6
Q

supplier power is powerful

A

high supplier concentration
satisfactory substitute products not available
suppliers products are critical to buyers
high switching costs
buyer is not a significant customer

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7
Q

industrial environment analysis

A

1) understanding key competitive forces that shape competition
2) identify key success factors
3) predict future industrial profitability
4) find strategy

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8
Q

threat of new entrants are affected by

A

econ of scales
product differentiation
capital requirements
access to distribution channels
cost disadvantages independent of scale
gov policy

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9
Q

threat of substitutes strong

A

customers face low switching costs
substitutes price is lower
susbstitutes perf/quality =better
service after sale
location

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10
Q

attractive industry

A

moderate/weak rivalry
high entry barriers
few threat of substitutes
suppliers/buyers weak

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11
Q

tangible ressources

A

financial
organizational
technological
physical

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12
Q

untangible ressources

A

human
reputational
innovation

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13
Q

core competencies arise from

A

1) collective learning/expertise within the business
2) ability to integrate skills and technologies
3) ability to deliver superior products and services
4) ways business is differentiated

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14
Q

4 criteria of sustainable advantage

A

VRIO

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15
Q

for value chain to be competitive advantage need

A

1) perform activity that provides value superior to competitors
2) perform value creating activities competitors cant

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16
Q

outsourcing benefits

A

higher flexibility, reduce capital investment, mitigate risks

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17
Q

outsourcing rational

A

improve business focus
sharing risks
freeing resources for other purposes
performing fewer capabilities

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18
Q

classification of stakeholder

A

1) capital market shareholder
shareholders + major suppliers
2) product-market stakeholder
primary customers, unions, host communities ,suppliers
3) organizational stakeholder
employees, leaders

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19
Q

social responsability 2 sides

A

milton friedman : as much money
Byron : profit is a means not and end, should focus on legal, econ, ethical, discretiionary org

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20
Q

corporate gov

A

set of mechanisms to manage the relationship among stakeholders

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21
Q

4 mechanisms to mitigate risks of seperation ownership/man control

A

1) ownership concentration
diffuse : weak monitoring
high degree ownership
instutional owners
2) boards of directors
insiders, related outsiders, outsiders
3) executive compensation
4) market for corporate control

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22
Q

drivers of competitive behavior

A

awareness, motivation, ability

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23
Q

competitive rivalry

A

ongoing sets of actions and responses ocurring between competitors and influences an individual firm’s ability to gain and sustain competitive advantages

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24
Q

competitive behavior

A

set of comp action and responses the firms takes to build or defend its competitive advantage and improve its market position

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25
competitive dynamics
total set of action and responses taken by all firms competing withing a market
26
how to know the type of competition ?
market commonality (multimarket competition) ressource similarity
27
1st mover benefits
loyalty of customers, market share, proprietary technology must : invest in r&d, rapidly successfully market a stream of innovative products
28
2nd mover benefits
studies customers reaction + get feedback more efficient and need to find additional value
29
slow cycle market
markets in which competitors lack the ability to imitate the focal firm's comp advantage
30
fast cycle market
markets in which competitors can imitate the focal firm's capabilities that contribute to its comp advantage
31
business level strategy
Integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets
32
types of business model
franchise model freemium model advertising model subscription model peer-to-peer model
33
types of business level strategy
1) cost leadership 2) differentiation strategy 3) focus strategy 4) integrated cost/differentiation strategy
34
cost leadership strategy
commonly standardized goods process innovations critical provide some protection against powerful customers oprates with greater margin then competitors (absorb supplier's price) profit margins high so barriers to entry cost leader has more flexibility than its competitors with product substitution risks: loss of comp advantage to newer technology,fail to assess change in customers' needs, ability to imitate cost leader process engineering is emphasize, formalized procedure guide actions, structure is mechanical, jobs roles are highly structures, operations is the main function
35
differentiation strategy
non standardized products, when value differentiated products more than costs customer more loyal and less price sensitive, able to charge higher prices, differentiatior is insulated it is not affected by suppliers power, customer loyalty + uniqueness makes it difficult to enter, less switching subsitute risk : when uniqueness of product does not justify price, competitors can reporduce it and sell at lower price, failure of a firm to meet expectation marketing is the main function, new product R&D is empahsize, functions are decentralized, formalization is limited, structure is organic
36
focus strategies
must complete various primary and support activities in a competitively superior manner opportunities: large firms may overlook a niche market firm may lack the resources needed to compete in the broader market focusing allows the firms to direct its resources to a certain value chain activities to build a com advantage firm is able to serve a narrow market segment more effectively risks: competitors ability to use its core competencies to outfocus an industry wide company might decide the market segment is attractive reduction in differences of the needs between customers in a narrow market segment and the indsutry wide market over time
37
integrated cost leadership/differentiation strategy
increase the number of primary value chain activity and support functions (flexibility is required) sources of flexibility : flexible manufacturing systems information networks total quality management systems but often not best nor lowest
38
corporate level strategy
Specifies action a firm takes to gain a competitive advantage by selecting and managing a group od different business competing in different product markets
39
corporate level strategy concerned with 2 key issues
in what product markets and business the firm compete ? how corporate headquarters should manage those businesses
40
product diversification
deals with the scope of the the industries markets in which the firm will compete (broad/narrow) how managers buy/create/sell different business to match skills and strengths with opportunities presented to the firm
41
low -level diversification
single business : 95% main business: 70-95%
42
moderate-high level diversification
related constrained: dominant business, product/tech/distribution linkage related linked: <70%, limited links between businesses
43
very high diversification level
unrelated: <70%, no common links between businesses
44
role of diversification
horizontal vertical : backward/upstream, forward/downward International expansion
45
corporate relatedness
Corporate relatedness in transferring skills or corporate core competencies among units.
46
operational relatedness
Achieved when the firm's businesses successfully share resources and activities to produce and sell their products
47
related constrained
high operational relatedness, low corporate relatedness
48
unrelated diversification
low operational relatedness low corporate relatedness
49
operational + corporate relatedness
both high
50
related linked
low operational relatedness high corporate relatedness
51
how to create operational relatedness
sharing: primary activities support activities
52
activity sharing
costly to implement and coordinate may create unequal benefits for the division involved can lead to fewer managerial risk-taking behavior
52
activity sharing
costly to implement and coordinate may create unequal benefits for the division involved can lead to fewer managerial risk-taking behavior
53
corporate-level core competencies
complex set of resources and capabitlies that link deifferent business primarily through man/tech knowledge, experience and expertise
54
related-linked strategy create value by
transferring core competences - expense of developing core competencies already incurred - intangible resources => immediate advantage
55
simultaneous operational and corporate relatedness
ability to create economies of scope by sharing activities and transferring core competencies - difficult for competitors to understand/imitate - expensive to undertake (sometimes benefits do not offset the loss => diseconomies of scales) - results in discounted assets by investors => :((
56
unrelated diversification strategy
financials economies : cost savings realized through improved allocation of financial resources based on investments inside/outside the firm can create value : efficient internal capital market allocation, asset restructuring corporate headquarter office distributes capital to its businesses to create value for the overall corporation
57
incentives to diversify
external: antitrust regulations, tax laws internal: low perf, uncertain future cash flows, pursuit of synergy, reduction of risk for the firm
58
simple structure
manager makes all decisions for focus strategies and business level strat
59
functional structure
chief executive officer and limited corporate staff with functional line managers in dominant org areas such as production, acc, marketing... for business level strategies and some corporate level strategies (single/dominant with low diversification) benefits: econ of scale/scope, performance standard are better maintained, specialized training and in depth skill dvp, clear decision making disadvantages: hard to integrate, lack of common vision
59
functional structure
chief executive officer and limited corporate staff with functional line managers in dominant org areas such as production, acc, marketing... for business level strategies and some corporate level strategies (single/dominant with low diversification) benefits: econ of scale/scope, performance standard are better maintained, specialized training and in depth skill dvp, clear decision making disadvantages: hard to integrate, lack of common vision
60
mutlidivisional structure
corporate office and operating division, each op division representing a separate business in which the top corporate officer delegates responsibilities to division manager for day-to-day op appropriate when firm is highly diverse benefits: corporate officers are able to more accurately monitor perf of each business (better control) , facilitates comparison between division (improve ressource allocation) disadvantages: difficult to coordinate across product lines, replication of ressources, pressure to generalize
61
strategic reason for acquisition
1) increased market power : horizontal, vertical, related acquisition 2) increase diversification 3) overcoming entry barriers 4) reshaping firm's competitive scope : lessen market dependencies 5) learning + dev capabilities 6) lower risks than dev new products 7) cost of new product dvp + increase speed to market
62
pbl with acquisitions
1) integration difficulty 2) inadequate evaluation of the target's value 3) large debts that preclude adequate long-term investment 4) creating a firm that is too diversified 5) managers overly focused on acquisition 6) developing a firm too large (extensive bureaucracy)
63
integration difficulties challenges
meld unique corporate cultures link financial and info control system build effective working relationship (mgmt style differ) determine leadership structure
64
joint venture
2 or more firms create a legally independent company to share some of their resources to create a competitive advantage partners own an equal % and contribute equally to the venture's operation often formed to improve a firm's ability to compete in uncertain environments transferring tacit knowdlege => long-term relationship
65
equity strategic alliance
alliance in which one company purchases equity in another business (partial acquisition) or each business purchase equity in each other (cross-equity transaction)
66
non-equity strategic alliance
Alliance in which 2 or more firms develop a contractual relationship to share some of their resources to create a comp advantage less formal, less commitment, no intimate relationship, not suitable for complex project
67
business-level strategy cooperative strategy
strategy through which firms combine some of their ressources to create a competitive advantage by competing in 1 or more product markets
68
4 business level cooperative strategy
1) complementary strategic alliances 2) competition response strategy 3) uncertainty-reducing strategy 4) competition-reducing strategy
69
complementary strategic alliances
business-level alliances in which firms share some of their resources in complementary ways to create a competitive advantage vertical horizontal
70
uncertainty-reducing alliances
used to hedge against the risks created by the condition of uncertain competitive environment (such as new product markets)
71
competitive-reducing strategy
used to avoid excessive competition while the firm marshals its resources to improve its competitiveness collusion is often used: collusive strategy (explicit, implicit)
72
competitive risks of cooperative strategies
inadequate contracts misrepresentation of competencies brought to the partnership opportunistic behavior ( partner fail its part, 1 more involved)

strategic management (1 decks)

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