Exam 1 Flashcards
What is strategy?
Doing right things.
What is operational effectiveness?
Doing things right.
What is competitive advantage?
Having above normal returns.
Who are we trying to gain competitive advantage for?
Investors
Lendors
___________ ______________ : I can do a job better than anyone is capable of doing. No one else can do the job
Operational Effectiveness.
Economies of ______: As the size of the business goes up the per unit costs go down
Economies of Scale
Economies of ______: As variety increases the price per unit drops
Economies of Scope.
LVMH has what type of diversification?
Related: They have high class products. More specifically related constrained because non of the products are similar
Two types of external environment?
General
Industrial
What do we use to analyze the general environment?
PESTLE Political Economic Social Technological Legal Environmental
What environment are Bain and Mason associated with?
External Environment.
Who came up with SCP?
Bain and Mason
What does SCP mean?
The structure effects the conduct. The conduct then influences the performance. But it could also be said that structure directly influences performance because it is so powerful.
___________ ___________ taught strategy on how to manipulate structure to make a company more profitable
Michael Porter
When comparing companies via the general environment, they should all be relatively similar: True or False
True. This is because the general environment affects everyone that is in it, not just one certain company.
A low amount of suppliers in an industry is a _________ threat.
High.
