Business strategy Flashcards
What is a business strategy?
Long-term plan of action that an organization develops to achieve its goals and objectives.
What does outperform mean?
Outperform generally means to perform better than expected or to exceed the performance of others.
What are Henry Mintzberg’s 5 Ps of business strategy?
- A plan
- A ploy
- A pattern of behaviour
- A position with respect to others
- A perspective
What does a plan imply according to Mintzberg’s definition?
A conscious course of actions
Deal w/ a particular situation
Operate over a given period
Lead to a future objective (market share, level of profitability)
What does the ploy mean?
In business, a ploy refers to a cunning, often deceptive, or manipulative action or tactic that is employed by an individual or organization in order to gain a competitive advantage or achieve a particular goal.
What does a pattern of behaviour imply?
- consistent/logical response to events
- no clear long-term objective
- a habit (ex: introducing a new product each year)
What does operational management imply?
- dealing with personnel issues
- checking budgets
- looking for ways to improve efficiency
What does strategic management imply?
- behaviour of competitors
- evaluating the share price of the company
- considering possibilities to expand the business
What are the three major components of strategic management?
- strategic analysis
- strategic choice
- strategic implementation
Regarding strategic management, what is the difference between a domestic business and an
international business?
Domestic business:
- national market => local issues
International business:
- global strategy
- know the environment of each market in which they operate (culture, politics, legal environment..)
Regarding strategic management, what is the difference between a non-profit organisation
and a for-profit organisation?
NPO:
- based on a mission
- supported by principles of value
FPO:
- money
What new business opportunities can be offered to companies that expand overseas?
- Increase market size
o New opportunities - Increase profitability
- Diversification
o Not relying on only one specific market/geographic region - Risky
o Economic instability
o Political instability - Found in developing economies
Give some reasons a company may have to go global.
- Minimise production cost : standardisation through the world
- At the same time : differentiate products and operations
o To match foreign consumers needs
o Respond to local market conditions
= Customisation - ↑costs
- Duplication of diff departments of management
If fails to adapt to local market, customers may be unsatisfied => loose market share
Trade off between cost reduction and local responsiveness is a key issue.
What does diversification mean?
Diversification refers to the process of expanding a company’s business activities into new product lines, markets, or regions in order to reduce risk and achieve growth.
What may be the pros and cons of investing in an emerging economy?
Pros:
- growth potential
- diversification
- lower costs
- competitive advantage
Cons:
- political instability
- economic volatility
- lack of transparency
- infrastructure challenges
What does standardising production imply?
- Increased efficiency
- Improved quality control
- Faster time to market
- Easier training and management
What does customisation mean?
Customization, also known as personalization, refers to the process of tailoring products or services to meet the specific needs or preferences of individual customers. This can involve adapting the design, features, or functionality of a product or service to match the unique requirements of different customers or customer segments.
What are the disadvantages of customisation?
- Increased costs
- More complex production processes
- Reduced economies of scale
- Difficulty in managing inventory
- Lack of standardization
- Potential for errors
What may happen to a company if it does not take the uniqueness of a market into account?
- Inability to differentiate itself from competitors
- Reduced customer satisfaction
- Inefficient use of resources
