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Management & Supervision > Chapter 6: Strategic Management > Flashcards

Chapter 6: Strategic Management Flashcards

How exceptional managers realize a grand design

1
Q

Strategy that attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company

A

Strategic positioning

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2
Q

Focuses on the organization as a whole

A

Corporate-level strategy

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3
Q

Focuses on individual business units or product/service lines

A

Business-level strategy

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4
Q

Plan of ­action by each functional area of the organization to support higher level strategies

A

Functional-level strategy

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5
Q

Assessment to look at where the organization stands and see what is working and what could be different so as to maximize efficiency and effectiveness in achieving the organization’s mission

A

Current reality assessment

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6
Q

The process of choosing among different strategies and altering them to best fit the organization’s needs

A

Strategy formulation

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7
Q

The implementation of strategic plans

A

Strategy implementation

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8
Q

Monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed

A

Strategic control

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9
Q

Exists when other companies cannot duplicate the value delivered to customers

A

Sustainable competitive advantage

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10
Q

Also known as a situational analysis, the search for the Strengths, Weaknesses, Opportunities, and Threats affecting the organization

A

SWOT analysis

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11
Q

The skills and capabilities that give the organization special competencies and competitive advantages in executing strategies in pursuit of its mission

A

Organizational strengths

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12
Q

The drawbacks that hinder an organization in executing strategies in pursuit of its mission

A

Organizational weaknesses

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13
Q

Environmental factors that the organization may exploit for competitive advantage

A

Organizational opportunities

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14
Q

Environmental factors that hinder an organization’s achieving a competitive advantage

A

Organizational threats

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15
Q

PESTEL

A

Political
Economic
Social
Technological
Environmental
Legal

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16
Q

Is a framework for analyzing a resource of capability to determine its competitive strategic potential by answering four questions about its Value, Rarity, Imitability, and Organization

A

VRIO

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17
Q

VRIO

A

Value
Rarity
Imitability
Organization

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18
Q

A vision or projection of the ­future

A

Forecast

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19
Q

A hypothetical extension of a past series of events into the future

A

Trend analysis

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20
Q

The creation of alternative hypothetical but equally likely future conditions

A

Scenario analysis

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21
Q

A process by which a company compares its performance with that of high-performing organizations

A

Benchmarking

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22
Q

3 common corporate-level grand strategies

A

Growth, stability, and defensive

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23
Q

One of three grand strategies, this strategy involves expansion—as in sales revenues, market share, number of employees, or number of customers or (for nonprofits) clients served

A

Growth strategy

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24
Q

Grows market share or profits by improving existing products and services or introducing new ones

A

Innovation strategy

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25
Q

One of three grand strategies, this strategy involves little or no significant change

A

Stability strategy

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26
Q

Also called retrenchment strategy, one of three grand strategies, this strategy involves reduction in the organization’s efforts

A

Defensive strategy

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27
Q

A management strategy by which companies evaluate their strategic business units on the basis of their business growth rates and their share of the market

A

BCG matrix

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28
Q

Strategy by which a company operates several businesses in order to spread the risk

A

Diversification

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29
Q

When a company purchases a new business that is related to the company’s existing business portfolio

A

Related diversification

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30
Q

Occurs when a company acquires another company in a completely unrelated businesses

A

Unrelated diversification

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31
Q

Diversification strategy where a firm expands into businesses that provide the supplies it needs to make its products or that distribute and sells its products

A

Vertical integration

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32
Q

Model proposes that business-level strategies originate in five primary competitive forces in the firm’s environment: threats of new entrants, bargaining power of suppliers, bargaining power of buyers, threats of substitute products or services, and rivalry among competitors

A

Porter’s model for industry analysis

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33
Q

Also called four generic strategies; cost leadership, differentiation, cost-focus, and focused-differentiation. The first two strategies focus on wide markets, the last two on narrow markets

A

Porter’s four competitive strategies

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34
Q

One of Porter’s four competitive strategies; keeping the costs, and hence prices, of a product or service below those of competitors and to target a wide market

A

Cost-leadership strategy

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35
Q

One of Porter’s four competitive strategies; offering products or services that are of unique and superior value compared with those of competitors but to target a wide market

A

Differentiation strategy

36
Q

One of Porter’s four competitive strategies; keeping the costs, and hence prices, of a product or service below those of competitors and to target a narrow market

A

Cost-focus strategy

37
Q

One of Porter’s four competitive strategies; offering products or services that are of unique and superior value compared to those of competitors and to target a narrow market

A

Focused-differentiation strategy

38
Q

Using questioning, analysis, and follow-through in order to mesh strategy with reality, align people with goals, and achieve the results promised

A

Execution

39
Q

A set of processes and managerial behaviors that involve defining, monitoring, measuring, evaluating, and providing consequences for performance expectations

A

Performance management

40
Q

What does the feedback loop in the strategic-management process involve?

A

Revising actions if necessary

41
Q

In which step of the strategic-management process does an organization establish the mission and vision statements?

A

Step One

42
Q

Having (1) few needs and many customers, (2) broad needs and few customers, and (3) broad needs and many customers are the three sources from which _____ emerges

A

Strategic position

43
Q

Before introducing a new piece of software, Star Software Inc. conducts benchmark activities to assess how popular the product would be in the marketplace. Which stage of the strategic management process is being used in this situation?

A

Assess the current reality

44
Q

Jordan plans to open a computer repair business this summer. As he plans, he writes down the long-term goals of the business so he can decide where he wants to go strategically. Which stage of the strategic management process is Jordan in?

A

Establish the mission, vision, and values statements

45
Q

Is is common practice today for most small business owners to engage in strategic planning?

A

No

46
Q

What is an example of an organizational weakness based on a SWOT analysis?

A

Inferior product quality

47
Q

When would a company use a VRIO analysis?

A

When deciding whether or not a new product might work in the marketplace

48
Q

Carlos is doing a VRIO analysis for a product his company is thinking about producing. The first question he asks is, “Does this new capability allow us to minimize the threat from the main competitor gaining more market share?” He decides the answer to this question is “yes.” Which aspect of the VRIO analysis does this question answer?

A

Value

49
Q

At first Rohan thought it was a good idea to offer a car repair pick-up service at his auto repair shop, but then he realized that most customers called Tow-It-Now Inc. and it would be difficult to match that company’s service. Which part of a VRIO analysis helped Rohan evaluate this idea?

A

Rarity

50
Q

Leonore’s Luxury Leather Footwear Corp. conducts a SWOT analysis and determines that at least 57 percent of consumers demand high-end footwear, and, as a result, its sales should increase by 18 percent in the next year. This vision of what could happen is known as a _____

A

Forecast

51
Q

A(n) _____ strategy requires little or no change to a company’s product or service.

A

Stability

52
Q

The process by which a company compares its performance with that of other high-performing organizations is known as _____

A

Benchmarking

53
Q

The strategy of moving into new lines of business is called _____

A

Diversification

54
Q

A grand strategy that involves expansion of things like sales revenues, market share, or number of employees is known as a _____ strategy

A

Growth

55
Q

When Johnson & Johnson promoted its baby shampoo as a gentle cleanser suitable for adults, it did this without changing the formulation of the product. Which type of corporate strategy does this exemplify?

A

Stability

56
Q

What does the market growth rate refer to, as used in the BCG matrix?

A

Industry growth

57
Q

Juanita feels it is important for her taxi company to continually measure itself against its best competition. She keeps track of the number of rides per hour and turnaround times for all her drivers and compares it to that of other high-performing taxi companies in the area. Juanita is using the process of _____ to compare her company with others

A

Benchmarking

58
Q

What strategy is American Tile Corp. using when it acquires a company that makes industrial cleaning products that American Tile does not currently offer?

A

Diversification

59
Q

A business that wants to reach more customers and hires more employees to get this done is focusing on a _____ strategy.

A

Growth

60
Q

You own a small deli near campus and learn that the university is exploring whether it should open a Subway sandwich franchise in the student union. Which of Porter’s competitive forces does this represent for you?

A

Threat of new entrants

61
Q

What does the BCG matrix evaluate?

A

market share and market growth rates

62
Q

Sasha has run a small diner near the train station for the past ten years. Six months ago, a chain restaurant serving gourmet burgers and sandwiches opened up near him and he has had to rethink his menu. He added some specialty sandwiches and free fries with every burger in order to retain his customers. Which of Porter’s five competitive forces has affected Sasha’s business?

A

Threats of new entrants

63
Q

When a company is readily able to switch to another company in order to get the raw materials it needs to make products, Porter would say that the bargaining power of _____ goes down.

A

Suppliers

64
Q

The Internet has enabled consumers to “price shop” several retailers in order to find the best price for items such as appliances, electronics, and even cars. This has increased the consumer’s ability to better negotiate favorable prices with retailers, demonstrating which of Porter’s five competitive forces?

A

Bargaining power of buyers

65
Q

Porter’s five competitive forces form a model for _____ analysis.

A

Industry

66
Q

Why do companies choose to diversify?

A

To grow revenue and to reduce risk

67
Q

Companies pursuing a cost-leadership strategy keep costs/prices _____ those of competitors and target a _____ market.

A

Below; wide

68
Q

Pacific Specialty Bikes store gets customized parts for its high-end models from a local manufacturer, Premium Supply. When the manufacturer announced a price increase, the bike store tried to switch to other local manufacturers but learned they that they wouldn’t be able to meet delivery schedules. As a result, Pacific Bike chose to pay the higher prices from Premium Supply. Which of Porter’s competitive forces does this demonstrate?

A

Bargaining power of suppliers

69
Q

Bethany wants to buy a pair of designer boots. To find the best price, she searches the Internet and compares prices among the eight sites that sell the boots. Which of Porter’s five competitive forces is demonstrated in this scenario?

A

Bargaining power of buyers

70
Q

Computer maker Dell tries to have the lowest prices for its computers in order to attract a large consumer group. In Porter’s four competitive strategies, this would be an example of the _____ strategy.

A

Cost-leadership

71
Q

Which of Porter’s four competitive strategies involves keeping the costs, and therefore prices, of a product or service below those of competitors but targets only a narrow market?

A

Cost-focus strategy

72
Q

When corporate departments such as marketing, human resources, and information technology implement plans of action that support higher-level strategies, they are following a(n) _____ strategy.

A

Functional

73
Q

Smartwater is a brand of bottled water that promotes health benefits and features a unique bottle design not found in competitor brands. Based on this, which of Porter’s competitive strategies is the company using?

A

Differentiation

74
Q

Aligning people with goals, achieving promised results, and integrating strategy with reality are all part of the _____ process.

A

Execution

75
Q

Ferrari and Lamborghini automobiles are marketed based on the cost-focus strategy. (True or False)

A

False

76
Q

What are functional strategies used to accomplish?

A

Putting strategic plans into effect

77
Q

What are the core processes of business identified by Bossidy and Charan?

A

Strategy, operations, and people

78
Q

According to Bossidy and Charan, execution is the central part of any company’s strategy. (True or False)

A

True

79
Q

According to Bossidy and Charan, the first core process of business is _____

A

People

80
Q

In which core process of business developed by Bossidy and Charan would a company ask, “Who is my competition?” and “How will my business make money on a sustainable basis?”

A

Strategy

81
Q

Of the three core processes of business identified by Bossidy and Charan, which do they believe is the most important?

A

People

82
Q

One way Chip’s Coffee House retains staff is by offering two-weeks paid vacation and health insurance benefits for part-time employees. Which of Bossidy and Charan’s core processes is this business focusing on?

A

People

83
Q

Which core process of business involves analyzing and understanding how success will be accomplished?

A

Strategy

84
Q

Which “unwritten” skill did the Harvard Business Review consider essential to being promoted on the job?

A

Strategic thinking

85
Q

Strategic thinkers should have a knowledge base shaped like the letter “T,” where the top of the “T” represents breadth of knowledge and the stem of the “T” represents _____

A

Depth of expertise

86
Q

Why do potential employers value the skill of strategic thinking in job candidates?

A

Strategic thinkers are globally-minded, Strategic thinkers make for more informed employees, and Strategic thinkers are quick to recognize opportunities

87
Q

What are the goals of attending industry conferences before or while working in a certain industry?

A

To make industry contacts and To learn about the specific industry

Management & Supervision (13 decks)

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