BMTs Flashcards
Define a SWOT analysis.
Quadripartite graph detailing internal and external forces on the company (Strengths, Weaknesses, Opportunities, Threats)
Describe a Gantt chart.
Visual representation of a schedule. Determine the amount of time it will take to do a task, what tasks succeed it, and which tasks can overlap.
Two strengths and two weaknesses of a SWOT analysis:
S: Quick, simple, many applications, help to reduce risk
W: Simplistic, static in time, may make decision-makers unwilling to face threats and weaknesses, cannot be used in isolation
Two strengths and two weaknesses of a Gantt chart:
S: Provides a quick overview of project. Easily calculates delays.
W: Can be come complicated. Visual representation lacks nuance and complexity.
Define Porter’s Generic Strategies:
Quadripartite graph (axes for scope (y), competitive advantage (x)). Categorizes USPs of businesses generally in four quadrants, proposing that a business must fall squarely into one quadrant to be competitively viable.
What is cost leadership?
Quadrant in Porter’s Generic Strategies (mass market intersects with cost). A business becomes the cheapest option in the market by reducing costs of production.
How can a business reduce costs of production?
Lay off employees, choose cheaper materials/suppliers, integrate vertically (coffee shop –> coffee beans)
What are two methods of cost leadership? Describe them and compare.
Cost parity and cost proximity.
Parity: charge the same price as a competitor, but use cheaper means of production. Higher profit margin.
Proximity: charge a cheaper price than the competitors, but use cheaper means of production. Lower profit margin, greater customer base.
One advantage and one disadvantage of cost leadership:
A: Enables firms to charge cheaper prices while still making a profit.
D: Can be risky as multiple firms may end up engaging in a price war.
What is differentiation?
Quadrant of Porter’s Generic Strategies (where mass market intersects with uniqueness). A firm makes itself unique from other companies, developing a USP. Through a unique brand, functions, accessibility, quality, packaging, etc.
Two advantages and disadvantages of differentiation:
A: Products become more attractive due to USP; customer loyalty is built; premium prices can be charged; prices are inelastic
D: Generally expensive; requires continuous innovation; requires substantial sustained marketing efforts
What are cost and differentiation focus?
Two quadrants in Porter’s Generic Strategies (where niche markets intersect with cost/uniqueness respectively). Niche market producer either focuses on being a low-cost producer, or on making specialty high-end products.
One advantage and disadvantage of focus strategies:
A: Can be highly profitable due to less competition; can charge premium pricing; brand loyalty is strong
D: Small market = small growth
Two advantages and disadvantages of Porter’s Generic Strategies:
A: Provides a straightforward framework to decide strategic options; provides choices and flexibility for entrepreneurs
D: Large firms can focus on more than one strategy with success; success is not guaranteed; certain strategies are not always practical; strategies are not always sustainable if firms cannot adapt
Describe Hofstede’s Cultural Dimensions.
Business Management Tool that assesses varying cultural factors (dimensions) on a 100-point spectrum. They are:
- Power proximity vs. power distance
- Femininity (cooperative) vs. masculinity (competitive)
- Risk-intolerant vs. risk-tolerant
- Short-term oriented vs. long-term oriented
- Individualism vs. collectivism
- Indulgence vs. restraint
