Key concepts Flashcards by Jana Huntjens

Two models to explain above-average returns

I/O model (external perspective)

Resource-based model (internal perspective)

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Three elements of the external environment

General environment
Industry environment
Competitor environment

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Four parts to external environment analysis

Scanning
Monitoring
Forecasting
Assessing

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8 segments of the general environment

Demographic
Political/legal
Technological
Global
Sociocultural
Sustainable/physical
Economic

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Five forces of competition model

Threat of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitute
Rivalry among competitors

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Barriers to entry

Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost disadvantages independent of scale
Government policy

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Threat of new entrants is dependent on

Barriers

Expected relatiation

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Bargaining power of suppliers is dependent on

Concentration
Substitute products
Switching costs

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Bargaining power of buyers is dependent on

Purchase fraction
Switching costs
Differentiation degree

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Rivalry among competing firms

Numerous or equally balanced competitors
Slow industry growth
High fixed costs or storage costs
Lack of differentiation or low switching costs
High strategic stakes
High exit barriers

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Four dimensions of competitor analysis

Future objectives
Current strategy
Assumptions
Strengths and weaknesses

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Sustainability of a competitive advantage depends on three factors

Rate of obsolescence
Availability of substitutes of core competence
Imitability of core competence

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Three conditions that affect managers

Uncertainty
Complexity
Interorganisational conflicts

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Elements of competitive advantage

Resources (tangible and intangible)
Capabilities
Core competencies

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Two ways of assessing core competencies

VRCN model

Value-chain analysis

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VRCN model

Valuable
Rare
Costly-to-imitate
Non-substitutable

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Types of value chain activities

Value chain activities (primary)
Support functions (secondary)

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Benefits of outsourcing

Focus on core competencies
Increased flexibility
Easier to get rid of partners when needed (not integrated)

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Risks of outsourcing

Reputation risks
Contract enforceability
Hold-up situation (supplier with high bargaining power)

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Business-level strategies differentiate between two dimensions

Broad/narrow market segment

costs vs differentiation

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Five types of business-level strategy

Cost leadership
Differentiation
Focused cost leadership
Focused differentiation
Integrated cost/differentiation

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Elements of the red vs blue ocean strategy

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Market space
Competition
Demand
Value/cost trade-off
Strategic choice

Two elements of competitor analysis

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Market commonality

Resource similarity

Three drivers of competitive behaviour

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Awareness
Motivation
Ability

Two types of actions/responses

Strategic | Tactical

Likelihood of attack is dependent on

First-mover benefits Organisational size (smaller firms can be more dynamic) Quality

Likelihood of response is dependent on

Type of competitive action (strategical or tactical) Actor's reputation (past behaviour) Market dependence

Types of market cycles

Slow-cycle Fast-cycle Standard-cycle

Three dimensions of corporate strategy

Business diversification (horizontal expansion) Vertical integration International expansion

Five levels of diversification

``` Single business Dominant business Related constrained Related linked Unrelated ```

Three dimensions of transactions that affect governance choice

Uncertainty Frequency Asset specificity

Three types of asset specificity

Site Physical asset Human asset

Value creating ways of diversification

Economies of scope (sharing activities and transferring core competencies) ``` Market power (blocking competitors and vertical integration) ``` ``` Financial economies (efficient internal capital allocation and business restructuring) ```

Three options to leverage synergies

Integration Cooperation Organisation

Incentives to diversify

Antitrust regulation and tax laws Low performance Uncertain future cash flows Synergy and firm risk reduction

Types of acquisitions

Horizontal Vertical Related

Reasons for acquisitions

``` Increased market power Overcoming entry barriers Lower development cost/increased speed to market Lower risk Increased diversification Reshaping competitive scope New capabilities ```

Problems in acquisitions

``` Integration difficulties Inadequate evaluation of target Large or extraordinary debt Inability to achieve synergy Too much diversification Managers overly focused on acquisitions Too large ```

Two dimensions to acquisition approaches

Need for organisational autonomy and need for strategic interdependence

Four types of acquisition approaches

Preservation Holding Symbiosis Absorption

Four main motives for internationalisation

Natural resource seeking Market seeking Strategic resource seeking Efficiency seeking

Incentives for internationalisation

``` Extend product's life-cycle Easier access to raw materials Integration opportunities Developing technology opportunities Access to emerging markets ```

Three benefits of internationalisation

Increased market size Economies of scale and learning effects Location advantages

Two types of international business strategies

Business-level | Corporate-level

Four determinants of national advantage

Factors production Firm strategy, structure and rivalry Demand conditions Related and supporting industries

Four types of international corporate-level strategy

Global (centralised) Transnational (mix global efficiency and local responsiveness) Multidomestic (decentralised) home replication strategy (just adding sales)

Seven entry modes

``` Exporting Franchising Licensing Strategic alliances Equity joint ventures Acquisitions Wholly owned subsidiaries (Greenfield ventures) ```

Four C's of strategic alliances

Complementarity Congruent goals Compatibility Change

Types of international environment risks

Political | Economic

Trade-off in internationalisation strategy

Standardisation vs adaptation

Three corporate governance mechanisms

Ownership concentration Board of directors Executive compensation

Roles of subsidiaries

Strategic leader Contributor Implementer Black hole

Pyramid of ethical behaviour (bottom to top)

Complying with laws and regulations Ethical behaviour Corporate social responsibility

Key concepts Flashcards

(53 cards)