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EBS > Competitive Strategy > Flashcards

Competitive Strategy Flashcards

1
Q

Industry lifecycle stages - Growth

A
  • Low price elasticity of demand
  • High price
  • High Adv (product)
  • Profit low, then increasing
  • Variety: Innovation
  • Quality: bugs
  • Capacity shortages
  • Easy entry
  • Few firms
  • Patch distribution
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2
Q

Industry lifecycle stages - Maturity

A
  • Increasing price elasticity of demand
  • Falling price
  • High Adv (brand)
  • Profit in decline
  • Variety: standardization
  • Quality: stable
  • Capacity OK
  • Entry is difficult and less attractive
  • Many firms
  • Well-established distribution
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3
Q

Industry lifecycle stages - Decline

A
  • High price elasticity
  • Falling price
  • No money for Adv
  • Profit low or negative
  • Variety: standardization
  • Quality: well-established design
  • Overcapacity
  • Entry is unattractive
  • Fewer firms
  • Distribution is important
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4
Q

Strategies for decline stage (Porter)

A
  1. Dominance and leadership
  2. Niche exploitation
  3. Harvest
  4. Exit
  5. Internalize the threat
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5
Q

The 5 forces framework

A
  1. Threat of new entrants
  2. Rivalry
  3. Bargaining power of buyers
  4. Bargaining power of suppliers
  5. Pressure from substitute products
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6
Q

Dominant strategy

A

a strategy that, no matter what other parties do, makes the player better off

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7
Q

Strategic Moves

A

something that is intended to alter the beliefs or expectations of other in a direction favorable to you

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8
Q

Specialization

A

is one variant of a range of strategies which communicate a credible commitment to a specified course of action by deliberately restricting the options to the firm

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9
Q

Value Chain

A

it breaks the firm down to component activities to identify actual and potential sources of competitive advantage

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10
Q

Strategy Business Unit (SBU)

A

part of the firm that can be seen to have a strong technological or market thread that allows it to be managed as a distinct business in its own right

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11
Q

Strategies - generic approaches

A
  1. Cost leadership
  2. Differentiation
  3. Focus
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12
Q

Cost leadership - Cost drivers

A
  1. Economies of scale
  2. Learning and experience curve gains
  3. Capacity utilization
  4. Vertical links with the value chain
  5. Economies of scope
  6. Timing
  7. Location
  8. Regulations, taxation, and subsidies
  9. Discretionary policies
  10. External economies
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13
Q

Differentiation - Differentiation drivers

A
  1. Policy choices
  2. Linkages
  3. Timing
  4. Location
  5. Inter-relationships with other value chains
  6. Learning
    7 Vertical integration and control
  7. Scale
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14
Q

R&D - Success of design

A
  1. Economies of scale
  2. Learning curve
  3. Network of users
  4. Network of suppliers
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15
Q

R&D - Failure of design

A
  1. Rising costs
  2. Few learning gains
  3. Few users
  4. Low supplier interest
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16
Q

Characteristics of innovative process - phases

A
  1. Basic research
  2. Applied research
  3. Development
  4. Introduction
17
Q

Characteristics of innovative process - Research end

A
  • Specificity: LOW
  • Uncertainty: HIGH
  • Time: LONG
  • Cost of stage: LOW
  • Cumulative cost: HIGH
18
Q

Characteristics of innovative process - Introduction end

A
  • Specificity: HIGH
  • Uncertainty: LOW
  • Time: SHORT
  • Cost of stage: HIGH
  • Cumulative cost: LOW
19
Q

9 innovating problems

A
  1. Appropriability
  2. Neglect of potential internal spin-offs
  3. Duplicated research efforts
  4. Uncertainty
  5. Cost
  6. Long time horizons
  7. Asymmetric information
  8. Macchiavelli’s problem
  9. Compartmentalization and need for integration
20
Q

Innovating problems: solutions

A
  1. Conduct R&D in-house
  2. Internal funding of R&D
  3. Corporate-level R&D
  4. Top-down budgeting
  5. Split the R&D function
  6. Split budget for operation and innovation
  7. Target for new product generation
  8. Parallel R&D approaches
  9. Second-in strategies
  10. Licensing and joint venture
  11. Research clubs
  12. Corporate diversification
  13. R&D diversification
  14. Matrix organization
  15. Organic structures
  16. Quasi-autonomy
  17. Product champions
  18. Fixed-price VS cost-plus R&D contracting
  19. Public fund of basic research
21
Q

Vertical relations - Range

A
  1. Spot contract
  2. Long-term contract
  3. Vertical integration
  4. Franchising
  5. Tapered integration
  6. Vertical quasi-integration
  7. Value-adding partnership
22
Q

Hold-up problem: solutions

A
  1. Repeated contracting
  2. Exhaustive contracting
  3. Standardized assets
  4. Hostages
  5. Multiple sourcing
  6. Vertical integration
  7. Tapered integration
23
Q

Market relations problems (w/ transactions)

A
  1. Bounded rationality
  2. Opportunism
  3. Asset specificity
24
Q

Forms of asset specificity

A
  1. Site specificity
  2. Physical asset specificity
  3. Human asset specificity
  4. Dedicated asset
25
Q

Cost of vertical integration

A
  1. Different competencies
  2. Dangers of specialization
  3. Lack of flexibility
  4. Sacrifice of economy of scale
  5. Dampered performance incentive
  6. Large size
  7. Vertical relations with rivals
26
Q

Attacks

A
  1. Innovation
  2. Change in consumer tastes
  3. Resource depletion
  4. CHange in government restrictions
27
Q

Diamond Framework (Porter)

A
  1. Factor conditions
  2. Demand conditions
  3. Linked and related industries
  4. Firm strategy, structure, and rivalry
  5. Chance and government
28
Q

Competing abroad: the principles (Porter)

A
  1. Seek sophisticated oversea buyers
  2. Source basic factors globally
  3. Keep strategy assets close to home
  4. Selective tapping of foreign technology
  5. Attack rivals directly to learn from them and neutralize them
  6. Locate regional HQs and best diamonds
  7. International acquisition and alliances for access and learning
  8. Globalization versus localization
29
Q

Mergers: difficulties in determining if value was added

A
  1. Measurement difficulties
  2. Other motives
  3. Wrong criteria
  4. Opportunity costs
30
Q

Mergers: how advantages are achieved

A
  1. Similar outlets

2. Similar activities

31
Q

Mergers gains: Supply-side vs Demand-side

A
  1. Supply: sharing resources and reducing costs

2. Demand: shifting demand curve and/or increased market power

32
Q

Mergers: why do they perform so bad?

A
  1. Compatibility problems
  2. Optimistic bias
  3. Strategy matching, interdependent strategies
  4. Insulation from environmental surprises
  5. Agency problems
  6. Prisoners’ dilemma
33
Q

Mergers: why do acquirers do even worse than those being acquired?

A
  1. Grossman-Hart problem (1980) - dispersion of ownership
  2. The ‘winner’s curse’
  3. Hubris
34
Q

Cooperative activities

A
  1. Licensing
  2. Franchise
  3. Informal co-operation
  4. Sub-contracting
  5. Joint venture
  6. Alliance
  7. Network participation

EBS (1 decks)

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