Quiz 2: Chapter 4- Introduction to Strategy Flashcards Preview

Mgmt 1001 > Quiz 2: Chapter 4- Introduction to Strategy > Flashcards

Flashcards in Quiz 2: Chapter 4- Introduction to Strategy Deck (45):
1

Strategy

pursuing a set of unique activities that provide value to customers' making trade-offs about which businesses to pursue, what products to produce, and which customers to serve- a manager's "game plan" -specifies how the firm will achieve their goals

2

Competitive Advantage

when a firm creates more economic value than competitors by engaging in a strategy that is difficult or impossible for others to duplicate

3

The notion of strategy was first described by...

Sun Tzu, in The Art of War (480-221 B.C.) a Chinese military book

4

The study and application of business strategy emerged from...

Military foundations

5

The rules of engagement, the manner in which organizations attempt to gain a competitive stronghold

-generating better info that their rivals
-analyzing that info to make strong, informed choices
-quickly selecting among choices
-converting strategic choices into decisive action

6

Conglomeration

when businesses grow through unrelated diversification, essentially by acquiring companies in different industries

7

Today most firms view strategy as a framework rather than a...

fixed plan

8

Goal

an organizationally desired result, product, or end state

9

Identifying Internal environment

Managers must analyze its goals, resources, and competencies to asses the firm's capabilities and potential

10

Identifying External environment

managers must emphasis the contextual forces,

11

Core competenceis

a network of unique activities that strategically fit together and are difficult to replicate

12

Vision

a concept or picture of what a firm wants to achieve and how it plans to accomplish it
-a vision is often what motivates individuals to join a firm and perform beyond expectations

13

Mission

the activities a firm performs for its customers

14

Mission statement

a statement that defines a firm's reason for existence
-often states what activities the firm performs or what markets it is trying to serve and how it distinguishes itself from competitors

15

Objectives

provide a series of quantifiable milestones or benchmarks by which the firm can assess its progress

16

Strategy Formulation

the process of analyzing a firm's external and internal environments as well as the firm's vision and mission

17

The development of strategy should be both a....

planned and emergent process

18

Planned Component of Strategy

involves systematic assessment of the external and internal environments, the creation of plans to react to or impact environmental factors
-the establishment of objectives or benchmarks the firm hopes to achieve

19

Emergent component of Strategy

it should be flexible and adaptable to changing environmental conditions

20

Operational Effectiveness

performing certain activities that enable a firm to operate more effectively than its competitors do

21

As a manager develops a strategy, they need to consider three key elements:

1) Manager must realize that competitive strategy is primarily about being different, not about operational efficiency
2) Manager must decided what NOT to do
3) Manager must create a solid fit among the activities so that the product or service being offered cannot be easily copied by competitors

22

Strategic Positioning

a place in an industry that a firm occupies by way of the products or services it offers and the methods it chooses to deliver them

23

Return of Equity (ROE)

a measure of the rate of return on the ownership interest (shareholders' equity) of the common stock owners

24

Managers should evaluate their strategy based on a number of key criteria:

-External fit
-internal fit
-Differentiation
-Implementable

25

External fit

does the strategy fit with the environmental landscape?

26

Internal fit

Does the strategy leverage the firm's key resources?

27

Differentiation

Does the strategy provide a distinct, differentiated, and sustainable position in the marketplace?

28

Implementable

Can the firm effectively execute the strategy?

29

Business-Level Strategy

the determination of how a company will compete in a given business and position itself among its competitors
-choosing among three general strategies; low cost, differentiation, focus

30

Corporate-Level Strategy

the way a company seeks to create value through the and coordination of multi-market activities

31

Multinational Strategies

strategies in which the parent company organizes local subsidiaries and gives them autonomy to develop products tailored to local tastes
-important to be responsive and sensitive to local needs and tastes

32

Global Strategies

strategies that focus on developing overall scale economies and global efficiency instead of catering to local tastes

33

International strategies

combine elements of multinational and global strategies by using foreign subsidiaries to produce and distribute products

34

Transitional strategy

balance a firm's international activities among efficiency, local responsiveness, and organizational learning

35

Market Potential

the overall market size of a particular region and its growth prospects

36

Two large aspects to market entry;

-deciding the extent to which a firm will export its goods or produce them locally
-deciding whether the firm will own all of the production assets or share ownership with another party

37

Four Major forms or Market Entry

1) Exporting
2) Licensing and Franchising
3) Joint Ventures
4) Alliances

38

Exporting

involves shipping a firm's products from its domestic home base to global markets

39

Licensing

a contractual arrangement "where by the licensor (selling firm) allows its technology, patents, trademarks, designs, processes, know-how, intellectual property, or other proprietary advantages to be used for a fee by the licensee (buying firm)

40

Franchising

"where the franchisor (parent company/owner) of a service, trademarked product, or brand name allows the franchisee to use the name in return for a lump sum payment or royalty, while conforming to be required standards of quality and service

41

Both Licensing & Franchising are....

low-cost means of market entry

42

Joint Venture

two firms come together to form a new company in the market
-the overall success rate of joint ventures globally is about 50%

43

Alliance

partners come together by contract to engage jointly in activities in a market
-involves firms sharing resources or capabilities with a counter-party for the mutual benefit of both

44

Alliances are low cost but....

take time and effort to establish and cultivate

45

Wholly Owned Subsidiary

when a firm sets up a fully operational, independent, entity in a foreign country to conduct business in that market
-an expensive and risky proposition