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Strategic Management > Day 1 Porter what is strategy pg 63-67 > Flashcards

Day 1 Porter what is strategy pg 63-67 Flashcards

1
Q

What are some results from letting operational effectiveness supplant strategy? (3)

A
  1. zero sum competition
  2. static or declining prices
  3. pressures on costs that compromise companies ability to invest in the business for the long term
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2
Q

which strategy positioning is the least common or least well understood?

A

access based positioning

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3
Q

What is a second reason that improved operational effectiveness is insufficient?

A

Competitive convergence- companies through competition start to look and be more alike losing any competitive advantage being different gains them

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4
Q

why do new entrants have the edge in finding new strategic positions? (5)

A
  1. they find unique positions that have been available but overlooked by established competitiors
  2. they can prosper by occupying a position that a competitor once held but has ceded through years of imitation and straddling
  3. entrants coming from other industries can create new postions because of distinctive activities drawn from their other businesses
  4. new positions open up because of change and new entrants are unencumbered by a long history in the industry so they can more easily perceive the potential for a new way of competing.
  5. they can be more flexible because they face no trade offs with their existing activities
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5
Q

what does the popularity of outsourcing and the virtual corporation reflect?

A

the growing recognition that is is difficult to perform all activities as productively as specialists

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6
Q

are variety based , needs based, and access based positioning mutually exclusive? Do they overlap?

A

No. often

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7
Q

T/F Outsourcing activities to often the same efficient third parties makes those activities more generic and can help along competitive convergence

A

T

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8
Q

what companies are examples of needs based positioning and how is this demonstrated? (2)

A

IKEA- seeks to meet all the home furnishing needs of its target customers not just a subset of them. Bessemer Trust Company- private banking that targets families with minimum of 5M in investable assets who want capital preservation combined with wealth accumulation. they have one officer for every 14 families. very personalized

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9
Q

T/F Rural vs urban based customers are not an example of access driving differences in activiities

A

F

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10
Q

What is the most obvious reason that constant improvement in operational effectiveness is not sufficient to achieve superior profitability?

A

the rapid diffusion of best practices. competitors can quickly imitate management techniques, new technologies, input improvements, and superior ways of meeting customer needs

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11
Q

it is common that through competition in operational effectiveness, there are major productivity gains that are not retained in superior profitability for the company. why is this and who does gain from it?

A

everyone is doing it so no one company gains a competitive advantage and reaps the rewards. The ones who do benefit are the customers and in the case of commercial printing industry also the equipment suppliers

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12
Q

Is it a tradeoff between defects and costs now or in the past?

A

NO it used to be thought that it was

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13
Q

what 2 companies utilizes variety based positioning? how do they do this?

A

Jiffy Lube They only do automotive lubricants and do not offer other car repair or maintance services Vanguard. provide common stock, bond, and money market funds that offer predictable performance and rock bottom expense

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14
Q

through programs such as TQM, time based competition, and benchmarking, managers have changed how they perform activities in order to do what 3 things?

A
  1. eliminate inefficiencies 2. improve customer satisfaction 3. achieve best practice
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15
Q

Why is competition based on operational effectiveness alone mutually destructive for companies?

A

it leads to wars of attrition (wearing the other company down) that can be arrested only by limiting competition alot of times through mergers (buying their rivals)

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16
Q

what is a broadly targeted competitor? 2 examples?

A

they serve a wide array of customers, performing a set of activities designed to meet their common needs. It ignores or meets only partially the more idiosyncratic needs of particular customer groups ex. delta and vanguard

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17
Q

TF A position emerging from any of the 3 sources can be broad or narrow

A

T

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18
Q

competitive strategy means deliberately choosing what?

A

a different set of activities to deliver a unique mix of value

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19
Q

how does southwest airlines demonstrate competitive strategy?

A

it does shorthaul, lowcost, point to point service. its low fares and frequent departures attract pricesensitive customers and convenience oriented travelors

20
Q

what were the 3 generic strategies porter introduced to characterize strategic positions at the simples and broadest level?

A
  1. cost leadership 2. differentiation 3. focus
21
Q

the popularity of outsourcing and the virtual corporation reflects the growing recognition that is is difficult to perform all activities as productively as who?

A

specialists

22
Q

The productivity frontier is constantly shifting outwards due to what 3 causes?

A
  1. new technologies 2. new management approaches 3. new inputs become available
23
Q

The essence of strategy is in the activities…in what two instances is this shown?

A
  1. performing different activities than rivals 2. performing same activities differently from rivals
24
Q

Can companies improve on multiple dimensions of performance at the same time?

A

Yes

25
Q

Ikea performs activities differently from its rivals how?

A

designs their own los cost ready to assemble furniture, displays every product in room like settings so customer can see how they go together, they have warehouse with products so no waitingt, customers pick up and transport thier own furniture . cusomers do everything themselves. they also have instore child care and extended hours

26
Q

operational effectiveness tools easily lead to what? (2)

A
  1. imitation 2. homogeneity
27
Q

what is the issue if competition in operational effectiveness produces absolute improvement in operational effectiveness?

A

it leads to relative improvement for no one

28
Q

what is an example of strategic competition involving superstores and broadline department stores? What is an additional example involving not using brick and mortar stores?

A

superstores will offer depth of merchandise in a single product category taking share from broadline department stores offereing a more limited selection in many categories. ex. hobby lobby yarn vs Walmart selection . mail order and online shopping take customers who want convenience from physical location stores

29
Q

Strategic competition can be thought of as what 2 processes?

A
  1. precieving new positions that woo customers from established positions 2. drawing new customers into the market
30
Q

what is needs based positioning? when does it come about?

A

serving most or all the needs of a particular group of customers. when there are groups of customers with differing needs and when a tailored set of activities can serve those needs best.

31
Q

T/F Constant improvement in operational effectiveness is necessary to achieve superior profitability

A

T

32
Q

A focused competitor thrives on what 2 groups of customers?

A
  1. those who are overserved and overpriced by more broadly targeted competitors 2. those who are underserved and underpriced
33
Q

T/F Variety based positioning can serve a wide array of customers, but for most it will only meet a subset of their needs

A

T

34
Q

what is a critical elelment of needs based positioning that is not intuitive and is often overlooked?

A

differences in needs will not translate into meaningful positions unless the best set of activities to satisfy them also differs

35
Q

T/F Constant improvement in operational effectiveness is sufficient to achieve superior profitability

A

F

36
Q

T/F Positiioning is only about carving out a niche

A

F

37
Q

what are the 3 distinct sources of strategic positions?

A
  1. variety based positioning 2. needs based positioning 3. access based positioning
38
Q

what is variety based positioning? why is it called this?

A

positioning based on producing a subset of an industries products or services.because it is based on the choice of product or service varieties rather than on customer segments

39
Q

what company is an example of access based positioning and how is it demonstrated.

A

Carmike Cinemas- operates movies theaters in cities and towns with populations under 200,000. makes money with lean cost structure. standardized, low cost theater complexes with few screens and less projection technology. dont need much administration staff. low corporate overhead. personal marketing in small communities. dominant if not only theatre in town

40
Q

what is access based positioning?

A

segmenting customers who are accessible in different ways. although their needs are similiar to those of other customers, the best configuration of activities to reach them is different

41
Q

what are 3 examples of access driving difference in activies. activies based positioning

A
  1. rural vs urban based customers 2. small rather than large customers 3. densly rather than sparsely situated customers
42
Q

according to Porter, managers have gradually let operational effectiveness supplant what?

A

strategy

43
Q

Which solutions diffuse the fastest (companies copy them)?

A

the most generic (those that can be used in multiple settings)

44
Q

what is a major tool that brings about competitive convergence and why?

A

benchmarking. the more companies try and compete with rivals by being more like them, the more they are indistinguishable from their rivals losing sustainable competitive advantage

45
Q

the growing recognition that is is difficult to perform all activities as productively as specialists is reflected by what ?

A

popularity of outsourcing and the virtual corporation

46
Q

which strategic positioning of the 3 main ones come closes to traditional thinking about targeting a segment of customers?

A

needs based positioning

Strategic Management (24 decks)

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