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MGMT 466 > Ch 1 > Flashcards

Ch 1 Flashcards

1
Q

4 factors that contribute to the success of top corporate performers

A
  1. entrepreneurial
  2. market oriented
  3. used valuable competencies
  4. offered innovative products and services
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2
Q

Strategic management process

A
  1. analyze external environment and organization to determine: resources, capabilities, core competencies. internal and external analysis => mission & vision => strategy
  2. strategy: effective actions and simultaneous integration of strategic formulation/implementation => positive performance
  3. performance
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3
Q

4 characteristics of current comp. landscape

A
  1. pace of change = relentless & ever-changing (boundaries = challenge)
  2. conventional sources not as effective
  3. new mind-set: flexibility, speed, innovation, integration, evolution
  4. perilous business world
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4
Q

hypercompetition

A

reality

inherent instability & change (from maneuvering combatants)

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5
Q

hypercompetition based on:

A
  1. price-quality positioning
  2. competition creates new know how & est. 1st mover advantage
  3. competition to protect/invade est. mkts.
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6
Q

2 primary drivers of the competitive landscape

A
  1. global economy

2. technology

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7
Q

Global economy

A

associated w/ opportunities & challenges
- EU & emerging economies
- challenges firms to evaluate mkt
globalization (led to):
- Incr. range of opportunities & Incr. performance standards
- culturally sensitive decisions & Incr. complexity
- “multi-polar” world
- liability of foreigness
- major factor: growth in influence of emerging mkts (BRIC, VISTA, Mexico, Thailand)

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8
Q

Technology & Technological changes

A
  1. Technology diffusion & disruptive technologies
  2. Info age
  3. Increased knowledge intensity
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9
Q

Technology diffusion & disruptive technologies

A
  • diffusion % Incr. a lot over 15-20 years
  • perpetual innovation => shorter product life cycles
  • main adv.: speed to mkt w/ innovative products
  • decr. adv. of patents (1-1.5 years to get info about competitors)
  • disruptive technologies => new industry or harm incumbents
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10
Q

Info age

A
  • flexibility to small firms

- decr. costs & Incr. accessibility

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11
Q

Increased knowledge intensity

A
  • knowledge = info + intelligence + expertise
    => basis of technology & its application
  • intangible resource - must use quickly & productively
    => gain via experience, observation, inference
  • use w/ strategic flexibility & continuously learn
  • develop + acquire + integrate => capabilities => apply to get comp. adv.
  • knowledge stock = necessary for innovation
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12
Q

I/O model

A

focuses outside the firm

must imitate each other

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13
Q

I/O model: performance determined by range of industry properties

A
  1. economies of scale
  2. barriers to entry
  3. diversification
  4. product differentiation
  5. degree of concentration
  6. market frictions
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14
Q

I/O model: 4 underlying assumptions

A
  1. external environ. imposes pressures & constraints that determine above average % strategies
  2. competitors control similar resources & pursue similar strategies
  3. resources = highly mobile => any difference = short lived
  4. decision makers = rational & committed + profit-max behaviors
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15
Q

I/O model: porter’s 5 forces

A

profit = function(interaction of forces)
ID attractiveness & most advantageous position
cost leadership strategy
differentiation strategy

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16
Q

“zero-sum” =

A

unattractive industry

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17
Q

I/O model: 6 components

A
  1. study external environment => primary determinant of %
  2. locate attractive industry - potential for > avg %s
  3. ID strategy formulation
  4. develop/acquire assets & skills to implement strategy
  5. strengths => strategy implementation
  6. superior returns
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18
Q

resource based model

A

focuses inside the firm
core competencies seen in org. functions
differences in performance due to unique resources & capabilities => not industry characteristics

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19
Q

resource based model: 3 categories of resources

A
  1. physical
  2. human
  3. capital
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20
Q

resource based model: 3 assumptions

A
  1. acquire different resources and develop unique capabilities based on combo and use
  2. resources and capabilities are not highly mobile across firms
  3. differences in resources and capabilities = basis of competitive advantage
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21
Q

resource based model: 4 elements: resources => adv.

A
  1. valuable
  2. rare
  3. costly to imitate
  4. nonsubstitutable
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22
Q

resource based model: 6 components

A
  1. resources
  2. capabilities
  3. adv.
  4. attractive industry
  5. strategy form. & implement.
  6. superior returns
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23
Q

vision & mission key purpose

A

inform stakeholders 1) what firm is, 2) what seeks to accomplish, 3) who it seeks to serve

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24
Q

vision

A

enduring, short & concise
tied to environments
foundation for mission

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25
Q

mission

A

concrete, est. individuality, inspiring/relevant

deals more directly w/ product mkts, customers, lower mgrs.

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26
Q

stakeholder influence

A

level of influence incr. with dependence

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27
Q

stakeholders: can manage to be competitive adv.

A
  1. ID & understand all important stakeholders

2. prioritize - power = most crucial criterion

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28
Q

3 classifications of stakeholders

A
  1. capital market stakeholders
  2. product market stakeholders
  3. organizational stakeholders
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29
Q

capital market stakeholders

A
  1. shareholders prefer minimal debt
  2. major suppliers of capital (lenders)
    expect firm to preserve & enhance wealth
30
Q

product market stakeholders

A
  1. customers - most valuable
  2. suppliers
  3. host communities
  4. unions
31
Q

organizational stakeholders

A
  1. e’ees - original stakeholders
  2. managers
  3. non-managers
    building knowledge => strategic leaders
32
Q

strategic leaders

A

decisive, committed to nurturing, and helping create value
visionary leadership motivates e’ees to expend extra effort => Incr. performance
not just CEOs; delegation
impacted by org. culture - the social energy that drives (or fails to drive) the org.

33
Q

effective strategic leaders:

A
  1. innovative
  2. leverage partnerships
  3. global mind-set
  4. long hrs. & ambiguous decisions
  5. provide vision
34
Q

profit pools

A

predict outcomes of strategic decisions

35
Q

4 steps to ID profit pools

A
  1. define boundaries
  2. estimate overall size
  3. estimate size of value-chain activity
  4. reconcile calculations
36
Q

____ indicates what the firm will/won’t do and shows how firm differs from competitors

A

strategy

37
Q

no competitive advantage is permanent

A

life determined by competitor’s speed to copy

exploiting competitive advantage is important for earning above average returns - w/o, earn at best avg. returns

38
Q

the march of globalization

A

product of firms competing against one another in an increasing number of global economies

39
Q

liability of foreignness

A

the risks of participating outside of a firm’s domestic markets in the global economy
amount of time required to learn how to compete in new markets
overdiversification

40
Q

rate of technology diffusion

A

speed at which new technologies become available and are used

41
Q

specifies that industry/segment in which company chooses to compete has a stronger influence on performance than do the choices managers make inside their organizations

A

I/O model

42
Q

earn above average returns by producing standardized goods or services at costs below competitors

A

cost leadership strategy

43
Q

earn above average returns by producing differentiated goods or services for which customers are willing to pay a price premium

A

differentiation strategy

44
Q

determining boundaries = challenge example

A

entertainment industry

45
Q

nature of global economy reflects realities of a hypercompetitive environment and challenges individual firms to evaluate markets. Example?

A

Starbucks & GE

46
Q

Example of disruptive technology

A

Uber

47
Q

Challenges firms to find most attractive industry to compete

A

I/O model

48
Q

example of zero sum

A

Mcdonalds

49
Q

_________ exemplifies I/O model imitation and poor performance

A

airline industry
few airlines have not imitated
southwest developed unique and valuable resources and capabilities

50
Q

assumes that a firm’s strategy is a set of commitments and actions flowing from the characteristics of the industry

A

I/O model

51
Q

assumes that each organization is a collection of unique resources and capabilities

A

Resource based model

52
Q

resources have a greater likelihood of turning into an advantage when…

A

formed into a capability

53
Q

many resources are ______ and _______ over time

A

imitable; substitutable

54
Q

developed by CEO

A

vision

55
Q

points firm in direction of where it would like to be in the years to come

A

vision

56
Q

stretches and challenges people

A

vision

57
Q

reflect firm’s values and aspirations and are intended to capture the heart/mind of each employee and stakeholders

A

vision

58
Q

Mission: stronger ethical standards => _______

A

incr. profitability

59
Q

critical aspects of the analysis required to engage in strategic actions that help to achieve strategic competitiveness and earn above average returns

A

mission & vision

60
Q

the challenge of potential conflicts with stakeholders lessens with…

A

above average returns

61
Q

capital market stakeholders: shareholders rights grounded in laws governing…

A

private property and enterprise

62
Q

product market stakeholders: customers prefer investors receive…

A

a minimum return when the quality and reliability of firm’s products are improved, but without high prices

63
Q

product market stakeholders: suppliers seek….

A

loyal customers willing to pay highest sustainable prices

64
Q

product market stakeholders: host communities

A

represented by government entities with which the firm must deal, influence via laws/regulation

65
Q

product market stakeholders: union officials

A

secure jobs, under highly desirable working conditions

66
Q

organizational stakeholders: employees

A

expect dynamic, stimulating, and rewarding work environment

67
Q

when do profit pools predict outcomes of strategic decisions?

A

before implementing decisions

68
Q

how do profit pools help?

A

can anticipate and focus on profit growth through mapping industry’s profit pool
help recognize actions to take

69
Q

analysis of profit pools

A

ID and understand primary sources of profits in industry

70
Q

rational approach firms use to achieve strategic competitiveness and earn above average returns

A

strategic management process

71
Q

Strategic management process: almost all have _________

A

ethical dimensions = ethics are revealed by culture

72
Q

I/O model: 2 business level strategies

A

cost leadership

differentiation

MGMT 466 (12 decks)

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