| ★ | Business & Corporate Level Flashcards
What is the difference between business and corporate strategy?
- Business strategy
How should we compete? - Corporate strategy
What businesses should we be in?
What are the three business-level strategies? Explain each strategy! (target & advantage)
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Differentiation
Uniqueness perceived by the customer (e.g. product technology, customer service etc. ..) -
Cost leadership
Low cost position -
Focus
Focus on specific segment only (niche product)
How do you call a strategy, which employs all together, ..
- differentiation
- cost leadership
- focus
Hybrid strategy
Name 2 key words associated with strategy?
- Detailed plan
- Long-term
What does strategy, in the congruence model, refer to?
- What is the central question for strategy? (2)
Allocation of resources (Business decisions) against demands, constraints and opportunities offered by the environment.
- What businesses should we be in.
- How should we compete to achieve competitive advantage?
What is the difference between strategy and strategy making?
- Strategy:
Outcome/Product - Strategy making:
Process
(Performance Management)
What does diversification mean?
Entering a new business
What are the different types of diversification? (corporate level strategies) (3)
Roughly explain related and unrelated diversification for Gillette and GE?
Related Diversification:
- Gillette:
Expanded from razors to grooming products (shaving creams, deodorants).
Leveraged brand strength in personal care. - GE:
Grew from electrical products to power generation, aviation, and healthcare equipment.
Used engineering expertise across related fields.
Unrelated Diversification:
- Gillette:
Acquired Duracell, entering the battery industry.
Diversified revenue streams outside personal grooming. - GE:
Expanded into financial services (GE Capital) and media (NBC).
Entered home appliances.
Spread risk across various unrelated markets.
Explain the main difference between backward and forward integration!
- Backward integration: To supplier (parntership)
- Forward integration: To customer (service)
Name one example for horizontal integration!
PS4 and games
Name 2 dangers of an overall cost leadership strategy!
- Easy imitation
- Same raw materials (cost increase!)
Name 2 dangers of a differentiation strategy!
- Easy imitation
- Price too high
Name two dangers of a focus strategy!
- Cost advantage may be 0 overtime
- Competition
What are the stages of the industry life cycle? (4)
- Name for each stage 2 characteristics and 1 strategy!
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- Introduction
-
New unknown products and operating loses
➔ Focus on R&D and marketing activities
- Growth (critical phase!)
-
Increase in sales and growing competition
➔ Define product & brand, to achieve repeat purchasers!
- Maturity
-
Direct & price competition
➔ Repositioning?
- Decline
-
Declining sales and increasing price competition
➔ Check out competitors and act accordingly
Business-level strategy (Definition) (2)
- A strategy designed for a firm or a division of a firm that competes with a single business (Industry Sector)
- It focuses on how the business will compete in its specific industry or market segment to gain a competitive advantage.
Porter’s Generic Competitive Strategies (ways of competing)
(Definition) (3)
Basic types of business-level strategies based on ..
- breath of target market
(industrywide vs narrow market segment) - type of competetive advantage
(low cost vs uniqueness)
overall cost leadership (Definition) (2)
- a firm`s generic strategy based on appeal to the industrywide market using a competetive advantage based on low cost.
What Is The Experience Curve And Why It Matters In Business (2)
decline in unit costs of production as cumulative output increases
competetive parity (Definition) (2)
a firm`s achievement of similarity, or being “on par,” with competitors
with respect to strategic product characteristic ..
- low cost,
- differentiation,
- or other, ..
What is a focus strategy? (2)
A firm’s generic strategy based on appealing to a narrow market segment within an industry,
aiming to serve the needs of a specific group of customers more effectively than competitors who target a broader market.
differentiation strategy (2)
- a firms generic strategy based on creating differences in the firms product or service offering
- by creating something that is perceived industrywide as unique and valued by customers.
Differentiation
3 topics & 2 examples each
Prestige or brand image
BMW automobiles, Hotel Monaco
Quality
Apple, Michelin tires, Ruth`s Chris steak houses)
-
Innovation
(Tesla Motors, Medtronic medical equipemnt) -
Features
(Ducati motorcycles, Cannondale mountain bikes)
Technology
North Face camping equipemnt, Martin guitars
-
Customer service
(USAA financial sercises, Nordstrom department stores) -
Dealer network
(Caterpillar earthmving equipment, Lexus automobiles)
Describe the role of competitive advantage in Management (3)
set of unique attributes or capabilities, ..
- that allow a company to outperform its competitors
- essential for long-term success
Explain how managers can create value through corporate diversivication
- Benefits (3)
- expanding into new markets or industries (Strategically)
- Align core competencies and resources.
Benefits
- risk reduction,
- economies of scope
- innovation
Explain how and why …
- Formal Structure & Performance (2)
- Informal Social Structure (2)
helps to implement strategy and achieve strategic goals
In practice, successful organizations recognize the interplay between formal and informal structures. They aim to strike a balance that aligns with their strategic goals.
~~~
Formal Structure & Performance
- Organizes roles/responsibilities for strategic alignment.
- Performance management measures contribution to strategy.
Informal Social Structure
- Influences employee alignment with strategic goals.
- Facilitates communication and collaboration for successful strategy implementation.
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What is the central question for strategy?
What does the strategy in the congruence model refer to?
Strategy
- What businesses should we be in and how should we compete?
- How do we achieve competitive advantage?
Congruence (effectiveness)
- Business decisions about the allocation of resources against demands, constraints and opportunities offered by the environment.
-
-
What are the stages of the industry life cycle? Name for each stage two characteristics and 1 strategy! (4) X
● Introduction - New unknown products and operating loses - Focus on RND and marketing activities
● Growth - Increase in sale and increasing competition - Define product/brand
● Maturity - Direct and price competition - Repositioning?
● Decline - Declining sales and increasing price competition - Check out competitors and act accordingly
