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strategic management > Chapters 5-8 > Flashcards

Chapters 5-8 Flashcards

1
Q

Overall Cost Leadership

A

two parts: Aggressive construction of efficient scale facilities, and vigorous pursuit of cost reductions from experience

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2
Q

experience curve

A

how a business learns to lower costs as output increases

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3
Q

competitive parity

A

differentiation relative to competitors, its not always about having the lowest price

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4
Q

differentiation strategy

A

creating something that is unique industrywide, and valued by customers

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5
Q

Focus strategy

A

narrow competitive scope within an industry, segments or niches

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6
Q

combination strategies

A

firms integrations of various strategies to provide multiple types of value to customers

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7
Q

mass customization

A

a firms ability to manufacture unique products in small quantities at low cost

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8
Q

profit pool

A

the total profits in an industry at all points along the industry’s value chain, this includes other segments, primary/support activities.

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9
Q

industry life cycle

A

the stages of introduction, growth, maturity, and decline that occur over the life of an industry, product, or service

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10
Q

introduction stage

A 
first stage of industry life cycle, 
New Products that are unknown to consumers
Poorly defined market segments 
unspecified product features 
low sales growth
rapid technological changes
operating losses
need for financial growth
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11
Q

Growth Stage

A 
Stage 2 of PLC, 
Strong increase on sales
growing competition 
developing brand recognition 
a need for financing value chain activities
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12
Q

maturity stage

A 
Third stage of PLC,
Slowing demand growth 
saturated markets
direct competition 
price competition 
strategic emphasis on efficient operations
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13
Q

Decline Stage

A

Stage 4 of PLC,
Falling sales and profits
Increasing price competition
Industry consolidation (make stronger)

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14
Q

reverse positioning

A

return to products to base-line, then add a few features, instead of being overdosed with features, can sell at lower price with less features, returns to growth stage

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15
Q

breakaway positioning

A

leaves it category and joins a new one, redefining competition, moves into a completely different market/product line. returns to growth stage

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16
Q

Four basic strategies for Decline Phase

A

Maintaining
Harvesting
Exiting the Market
Consolidation

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17
Q

harvesting strategy

A

obtaining as much profit as possible and requires that costs be reduced quickly

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18
Q

consolidation strategy

A

a firms acquiring with other firms to enhance market power and gain valuable assets

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19
Q

turnaround strategy

A

reverses a firms decline in performance and returns it to growth and profits

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20
Q

corporate level strategy

A

strategy that focuses on gaining long term revenue, profits, and market value through managing operations in multiple businesses

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21
Q

diversification

A

the process of firms expanding their operations by entering new businesses

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22
Q

related diversification

A

a firm entering different businesses to benefit by leveraging core competencies, sharing activities, or builidng market power

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23
Q

economies of scope

A

cost savings from leveraging core competencies or sharing related activities among businesses in a corporation

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24
Q

core competencies

A

a firms strategic resources that reflect the collective learning in the organization

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25
Q

Three criteria for core competencies to create value

A

must enhance competitive advantage by creating superior customer value
different businesses in the corp. must be similar in at least one important way related to the core competence
core competencies must be difficult to imitate or find substitutes

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26
Q

sharing activities

A

having activities of tow or more businesses value chains done by one of the businesses, creates cost savings, and revenue enhancements

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27
Q

market power

A

firms ability to profit through restricting or controlling supply to a market, or coordinating with other firms to reduce investment

two parts: pooled negotiating power and vertical integration

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28
Q

pooled negotiating strategy

A

improvement of bargaining positioning relative to suppliers and customers

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29
Q

vertical integration

A

occurs when a firm becomes its own supplier or distributor

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30
Q

unrelated diversification

A

a firm entering a different business that has little horizontal interaction with other businesses of a firm

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31
Q

parenting advantage

A

positive contributions of corp office to a new business through expertise

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32
Q

restructuring

A

the intervention of the corp office in a new business that drastically changes assets, rewards, tech systems, capital structure, and or management

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33
Q

BCG Stars

A

competing in high growth industries with relatively high market shares, have long term growth potential and should continue to receive funding

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34
Q

BCG Question Marks

A

competing in high growth industries but having relatively weak market shares, resources should be invested in them to enhance competitive positions

35
Q

BCG Cash cows

A

high market shares in low growth industries, source of cash for funding other SBU

36
Q

BCG Dogs

A

weak market shares in low growth industries, recommend that they be divested

37
Q

acquisitions

A

the incorporation of one firm into another through purchase

38
Q

mergers

A

the combining of two or more firms into one new legal entity

39
Q

divestment

A

the exit of a business from a firms portfolio

40
Q

strategic alliance

A

the cooperative relationship between two or more firms

41
Q

joint ventures

A

special case of alliance, where two or more firms contribute to form a new legal entity

42
Q

internal development

A

entering a new business through investment in new facilities, aka corp entrepreneurship or new venture development

43
Q

managerial motives

A

managers acting in their own self interest rather than to maximize long term shareholder value

44
Q

growth for growths sake

A

mangers actions to grow the size of their firms not to increase long term profitability but to serve their self interest

45
Q

egotism

A

managers actions to shape their firms strategies to serve self interests, ego is too high and gets in the way

46
Q

greenmail

A

a payment by a firm to a hostile party for the firms stock at a premium, when a offer might be made otherwise

47
Q

golden parachute

A

a prearranged contract with mgmt specifying that in the event of a hostile takeover the target firms mangers will be paid a significant severance package

48
Q

poison pill

A

aka shareholder rights plans, gives shareholders certain rights in the event of takeover by another firm

49
Q

globalization

A

increase of international trade of goods, money, info, and ideas

growing similarity of laws rules, norms, values, and ideas across countries

50
Q

factor endowments

A

the nations position in factors of production

51
Q

demand condition

A

the nature of home market demand for the industrys goods

52
Q

related and supporting industries

A

presence or absence of support activity industries in the industry value chain

53
Q

firm strategy, structure, and rivalry

A

conditions of nation governing of industries, as well as domestic rivalry

54
Q

multinational firms

A

firms that manage operations in more than one country

55
Q

arbitrage opportunities

A

an opportunity to profit by buying and selling the same good in different markets

56
Q

reverse innovation

A

new products developed from emerging markets that have adequate functionality at a low costs

57
Q

political risk

A

potential threat to a firms operations due to ineffectiveness of the domestic political system

58
Q

rule of law

A

a characteristic of legal systems where by behavior is governed by rules that are uniformly enforced

59
Q

counterfeiting

A

selling of trademarked goods without consent of the trademark holder

60
Q

currency risk

A

potential threat due to fluctuations in currency exchanges

61
Q

management risk

A

potential threat due to mgmt decision making in foreign markets

62
Q

outsourcing

A

using other firms to perform value creating activities that were previously performed in house

63
Q

offshoring

A

shifting a value creating activity from a domestic location to a foreign location

64
Q

exporting

A

producing goods in one country to sell to residents in another country

65
Q

licensing

A

when a company receives royalties in exchange for the right to use valuable property ie trademark patents

66
Q

franchising

A

like licensing, but involves a longer time period and other factors like monitoring operations training and advertising

67
Q

wholly owned subsidiary

A

a business in which a multinational company owns 100 percent of the stock

68
Q

opportunity recognition

A

identifying, selecting, and developing potential opportunities

69
Q

angel investors

A

private individuals who provide equity investments for seed capital during early stages of a new venture

70
Q

venture capitalists

A

companies that invest funds in lucrative business opportunities

71
Q

crowdfunding

A

funding a venture by pooling small investments from a large number of investors, usually online

72
Q

pioneering new entry

A

firms entry into an industry with a radical new product or highly innovative service that changes the way business is conducted

73
Q

imitative new entry

A

entry into an industry with products or services that capitalize on proven market successes and that usually have a strong marketing orientation

74
Q

adaptive new entry

A

entry into an industry by offering a product or service that is somewhat new and different to create value for customers by capitalizing on current market trends

75
Q

new competitive action

A

an act that might provoke competition to react such as new market entry, price cut, imitating products, or expanding production

76
Q

market commonality

A

extent to which competition are vying for same customers

77
Q

resource similarity

A

the extent to which rivals draw from the same types of strategic resources

78
Q

threat analysis

A

firms awareness of its closest competitors and the competitive actions they might be planning

79
Q

strategic actions

A

major commitments of distinction and specific resources to strategic initiatives

80
Q

tactical actions

A

extensions of strategies usually involving minor resource commitments

81
Q

market dependence

A

degree of concentration of a firms business in a particular industry

82
Q

forbearance

A

a firms choice of not reacting to a rivals new competitive action

83
Q

co opetition

A

a firms strategy of both cooperating and competing with rival firms

strategic management (1 decks)

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