Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Strategy Tenta > Cards from notes > Flashcards

Cards from notes Flashcards

1
Q

Porter’s Three Essential Tests are

A

attractiveness test
cost-of-entry test
the better-off test

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Porter’s Three Essential tests are used for…

A

to evaluate whether diversification into a new business or market will create value. Can also be used for vertical integration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Four factors for success

A

Goals that are consistent and long term

Understanding of the competitive environment

Objective appraisal of resources

Effective implementation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Framework of strategy analysis have two components:

A
  • Internal environment
  • External environment (mostly industry analysis)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

The mission statement describes…

A

organizational purpose: it addresses “why we exist”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

The vision statement desribes…

A

“What we want to be”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Corporate strategy is…

A

Industry Attractiveness: Where to compete

the scope of the firm in terms of the industries and markets in which it competes.

choices over:
- geographical
- diversification,
- vertical integration,
- new ventures
- allocation of resources between the different businesses of the firm

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Business strategy is…

A

Competitive advantage: How to compete

how the firm competes within a particular industry or market. If the firm is to succeed within an industry, it must establish a competitive advantage over its rivals. Hence, this area of strategy is also referred to as competitive strategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Firm strategy can be described in two ways:

A

Strategy as Positioning / Competing for the present
- Where are we competing?
- How are we competing?

Strategy as Direction / Preparing for the future:
- What do we want to become?
- How will we get there?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

The four parts of applying strategy analysis is…

A
  1. Setting the strategic agenda (Current strategy and performance)
  2. Analyzing the situation (Diagnose the performance, why is the performance good/bad?)
  3. Formulating strategy
  4. Implementing strategy
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Stakeholder value is…

A

Total value creation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Shareholder value is…

A

Profit for market efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

PESTLE stands for…

A

Political

Economic

Social

Technological

Legal

Environmental

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

For industry analysis, this framework can be used to find environmental hinders

A

PESTLE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

The core of the firm’s business environment is formed by its relationships with three sets of players:

A
  • Customers
  • Suppliers
  • Competitors
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Analyzing industry attractiveness can be measured using…

A

Porter’s Five Forces

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Porter’s Five Forces are

A
  1. competition from substitutes,
  2. threat of entry
  3. competition from established rivals
  4. the bargaining power of suppliers
  5. the bargaining power of buyers
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Resources are…

A

Productive assets owned by the firm

  • Tangible (Physical assets)
  • Intangible (Disney’s brand)
  • Human resources
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Capabilities are…

A

What the firm can do by combining resources effectively (e.g., organizational culture, operational expertise).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Competitive advantage is sustained by…

A

Isolating mechanisms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

The isolating mechanisms are:

A

Preemption: Firms occupy strategic opportunities to limit rivals, such as launching many products, overinvesting in capacity, or building large patent portfolios.

Obscuring superior performance: One way to throw competitors off balance is to mask high performance so rivals fail to see your success until it’s too late.

Deterrence: Firms discourage competitors by signaling credible threats of aggressive responses, making imitation unprofitable

Causal Ambiguity: Rivals struggle to identify the exact reasons behind a firm’s success when it stems from a complex mix of resources and capabilities (e.g., Netflix’s blend of analytics, content design, and global-local integration)

Acquiring Resources and Capabilities: To imitate a competitor’s advantage, a firm must acquire the necessary resources and capabilities, either by buying or building them. Barriers include the transferability and replicability of these resources, which can vary across market contexts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Cost advantage is achieved by…

A

Producing at lower cost while maintaining quality.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Drivers of cost advantage include:

A

Economies of Scale

Economies of Experience:

Process Technology

Input Costs (Advantages from location, supply ownership, or bargaining power.)

24
Q

Differentiation advantage is…

A

offering unique value to customers compared to competitors

25
Q

Vertical integration is…

A

a firm’s ownership and control of the stages in the value chain of an industry

26
Q

The benefits of vertical integration are…

A

Technical Economies from the Physical Integration of Processes

Avoiding Transaction Costs in Vertical Exchanges

Coordination Benefits

27
Q

The costs of vertical integration are…

A

Differences in Optimal Scale between Different Stages of Production

The Need to Develop Distinctive Capabilities

Problems of Managing Strategically Different Businesses

Competitive Effects

Flexibility

Investing in an Unattractive Business

Compounding Risk

28
Q

Strategy is the link…

A

between the firm and its environment

29
Q

Why do firms need strategy?

A

decision support: improves the quality of decision making

coordination and communication: Creates consistency and unity

target: Improves performance by setting high asperations

30
Q

Value creation for shareholder is to…

A

operate in the interests of their owners (who
wish to earn profit)

31
Q

Value creation for stakeholder is to…

A

maximize total value creation for customers, employees and society in whole

32
Q

VRIO stands for…

A

Value: Does the resource add value by helping the company exploit opportunities or mitigate threats?

Rarity: Is the resource rare or unique compared to competitors?

Imitability: Is it costly or difficult for competitors to imitate the resource?

Organization: Is the company organized to effectively utilize and capitalize on the resource?

33
Q

To appraise resources and capabilities, you can use…

A

VRIO

34
Q

The 6th force in Porter’s Five Forces is…

A

Complements

35
Q

A complement is…

A

Something that adds value while substitute reduces value.

Example: Ink to a printer

36
Q

ROI means…

A

Return on Investments

measures the profitability or efficiency of an investment relative to its cost.

It is used to evaluate the financial returns of strategic decisions, helping managers assess whether initiatives, projects, or strategies contribute value to the organization

37
Q

Margins are…

A

the proportion of revenue remaining after certain costs are deducted

38
Q

Forward-Looking Performance Measures:

A

Stock market value

39
Q

indicators of a firm’s effectiveness in generating profits:

A

ROCE (Return on capital employed)
ROA (Return on Assets)
ROE (Return on Equity)

40
Q

For a resource or capability to be a source of competitive advantage, two conditions must be present:

A

Relevance
Scarcity

41
Q

What is the most successful way of coping with a key weakness

A

outsource, because making own investment can be expensive, time-consuming, and demanding resources better used elsewhere

42
Q

There are three types of profit:

A

Gross profit

Operating profit

Net profit

43
Q

What is gross profit

A

sales revenue less - material cost

44
Q

What is operating profit

A

gross profit less operating expences, before tax/interest

45
Q

What is operating cash flow

A

Pengar som genereras av företagets dagliga verksamhet.

46
Q

What is free cash flow

A

Visar hur mycket pengar företaget faktiskt kan använda för tillväxt, utdelningar eller att minska skulder

47
Q

what factors affect industry rivalry

A

Concentration: The number and size distribution of firms competing within a market.

Diversity of Competitors: The ability of rival firms to avoid price competition by coordinating their prices depends on how similar they are in their origins, objectives, costs, and strategies.

Product Differentiation: The more similar the offerings among rival firms, the more willing are customers to switch between them.

Excess Capacity and Exit Barriers: Unused capacity encourages firms to offer price cuts to attract new business.

Cost Conditions: The ratio of fixed to variable costs affects the level of price competition.

48
Q

What is an industry

A

firms within a broad sector

49
Q

What is a market

A

the buyers and sellers of a specific product

50
Q

What is key success factors

A

the general sources of competitive advantage in an industry

those factors within an industry that
influence a firm’s ability to outperform rivals.

51
Q

Key success factors are found by looking at…

A

What do customers want and who are they?

How does the firm survive competition?

52
Q

What is a business ecosystem?

A

a community of organizations, institutions, and individuals that impact the enterprise.

53
Q

What is The Role of Resources and Capabilities in Strategy Formulation

A

Resources and capabilities are the internal foundations for a firm’s competitive advantage.

A firm’s strategy should exploit its resource and capability strengths while defending against its weaknesses.

54
Q

What are some external sources of competitive advantage

A

Changing customer demand: Shifts in consumer preferences or needs

Changing prices of inputs: Changes in the cost of raw materials or labor

Technological change: Advances in technology that create new opportunities or challenges

55
Q

What are the types of vertical integration?

A

Backward / upstream integration: a firm integrates into its suppliers’ activities

Forward / downstream integration: a firm integrates into its customers’ activities

56
Q

What are the steps in the Framework for Analyzing Resources and Capabilities

A
  1. Identify the firms resources and capabilities
  2. Appraise the firms resources and capabilities in term of:
    - Strategic importance
    - Relative strength
  3. Develop strategy implications for:
    - Strengths
    - Weaknesses

Strategy Tenta (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions