Chapter 3 Flashcards
vision statement
outlines company’s long term aspirations
declaration clarifying your
business’s meaning and purpose for stakeholders( especially employees).
Short sentences: business’s purpose. Should motivate employees.
what do we want to become?
Eg: Nikes: do everything possible to expand human potential
mission statement
summary of the long term goals and core values.
consider interest and needs
of stakeholders
Key Elements:
Purpose: Why does the business exist?
Goals: What does the business aim to achieve?
Values: What principles or beliefs guide the business?
Corporate Culture:
Shared values, beliefs, & behaviors of a company’s employees expressed through their social interactions & work environment
Corporate Governance
system of rules, practices, & processes by which a company is directed & controlled
Ensures company is managed in way transparent, accountable, & ethical, while aligning interests of stakeholders.
+ corporate governance
- minimizing risks
- promoting trust
- preventing conflicts of interest in a company
(-)corporate governance
- knowledge imbalance
- monitoring limits ( limited access to information, time constraints, over-reliance on management reports).
This can allow poor practices or unethical behavior to go unchecked, increasing the risk of mismanagement.) - misaligned incentives (If managers are incentivized with short-term rewards, such as bonuses tied to quarterly profits, they may make decisions that boost short-term performance but harm the company’s long-term sustainability)
MARKETING:
Process of defining, anticipating, creating &fulfilling customers’ needs & wants.
Pricing:
- Governments: influence pricing decisions through regulations and taxes.
- Suppliers: Cost of inputs and raw materials can have a significant impact
on pricing decisions. - Distributors: affect with their markups and pricing strategies.
- Competitors’ prices.
+ management information systems
● Better decision making
● Identification of patterns and trends
● Increased efficiency
● Competitive advantage
Porter’s Five Forces Model:
- Rivalry
- Threat of new entrants
- Threat of substitutes:
- Bargaining power of suppliers
- Bargaining power of customers:
Rivalry:
● Price wars
● innovation (new products)
● Intensive promotion (increased costs in marketing)
- customer loyalty
Threat of new entrants:
● Existing businesses: Economies of scale (competitive advantage)
● Brand preferences and customer loyalty
● Tariffs
● Patent
Threat of substitutes:
● price and performance of the substitute can match the industry’s product.
● Brand loyalty
● Switching costs
Bargaining power of suppliers:
It is high when:
● Low number of suppliers
● Low number of substitutes products
● Risk of forward vertical integration of suppliers (suppliers can easily integrate forward,start producing product themselves, can become direct competitors of their former buyers)
● The resource supplied is scarce
control price & quantity
Bargaining power of customers:
It is high when:
● Buy in volume
● Number of firms supplying the product (substitutes).
● Number of customers
● If sellers are struggling in the face of falling consumer demand
Hype Cycle of Gartner
Shows where the new technology are in their evolution process
PESTLE
external factors
Political
Economic
Social
Technological
Legal
Environment
SGM
Strategic Group Mapping
Purpose - driven company’s
prioritize positive social impacts
Globalization and Market entry
digitalization - facilitated easier market entry
increased competition
requiring agility and customer centric strategies
Blue Ocean Strategy
identifying new market spaces and creating value focusing on factors neglected by competitiors
ESG
Environmental, Social and Governance
Corporate culture key elements
- agility & adaptability
- risk-taking & innovation
- collaboration & communication
- structure & hierarchy
- focus on scalability
- talent development
- performance & results
- diversity & inclusion
