exam 1 Flashcards

Question

threat of buyers analysis

Answer 1

the # of buyers is small products sold to buyets are undifferentiated and standard products sold to buyers are a significant percentage of a buyers final costs bueyrs are not earning significant economic profits buyers threaten backward integration switching costs of buyers are low (that is , it is easy for buyers to stop buying from a firm, and start buying form another)

Answer 2

# define the industry you want to analyze. what is the unit analysis? ID the players. Who are the buyers, suppliers, substitutes, competitors? assess the strength of each force. High or low? look at the quantitative evidence. Make sure that your qualitative analysis matches the quantitative evidence. If they don't match, you must have missed something. understand the critical trends in your business.

Answer 3

understand whether the industry is attractive or unattractive make entry/ exit decisions position your company better in the industry to deal with threats think about how you can shape a more favorable industry structure ( raise entry barriers, etc)

Answer 4

economic value created

Answer 5

is concerned with matching a firm's resources and capabilities to opportunities in the environment companies that achieve competitive advantage create more economic value than their competitors

Answer 6

JC penny because, porche is differentiated and wal mart is known to be low cost. JC penny is stuck in the middle

Answer 7

focuses on gaining competitive advantage by lowering costs below the costs of its competitors (ex: WALMART) SOURCES OF COST ADVANTAGE: economies of scale (volume of production and specialization, OH costs) learning curve low-cost access to factors of production (land, labor, capital, and raw materials) technological factors independent of size policy choices ....THAT CANNOT BE EASILY DUPLICATED

Answer 8

focuses on gaining a competitive advantage by increasing the willingness of customers to pay (ex: apple) SOURCES OF DIFFERENTIATION: attributes of products/services ( product features, product complexity, timing of product introduction, location) relationships with customers ( product customization, consumer marketing, product reuptation) relationships with customers (product customization, consumer marketing, product reputation) linkages within or between firms (linkages among functions within a firm, linkages with other firms, product mix, distribution channels, services and support) ...RESULTING IN CUSTOMER CAPTIVITY BASED ON HABIT, ON THE COST OF SWITCHING COSTS, OR ON DIFFICULTIES AND EXPENSES OF SEARCHING FOR A SUBSTITUTE PRODUCT.

Answer 9

focuses on gaining a competitive advantage by achieving proximity in differentiation at a reasonable cost (ex: ikea) SOURCES OF LOW COST & DIFFERENTIATION: a synergistic combination of sources mentioned in the previous two slides the key idea is to match close rivals on key product or service attributes while beating them on price

Answer 10

profits = create x capture x sustain

Answer 11

econ 101 : companies can earn positive economic profits only in the short-run. In the long-run, however, competitive pressures drive above-average profits down to normal levels

Answer 12

low-cost and broad ; walmart -low cost leadership low-cost and narrow ; southwest airlines -focused low cost differentiation and broad ; starbucks differentiation and narrow ; ducati -focused

Answer 13

ROA, ROE, ROS, EPS, E/P, gross profit margin, cash flow per share, current ratio, quick ratio

Answer 14

return on invested capital ROIC economic profit (economic value added)

Answer 15

profits in excess of what an investor expects to earn from other investments with a similar risk

Answer 16

doing the right thing doing things better excelling in individual activities (parts) short-term

Answer 17

``` doing the right things doing things differently combining activities (whole) long-term ```

Answer 18

rests on unique activities requires making trade-offs creating fit among a company's activities fit drives both competitive strategy and sustainability

Answer 19

its hard to create great value-chain and well-connected system of activities that have FIT....but when its created its hard to move to a new market hard to change companies that have a good FIT when the world changes ex: walmart and costco ex: IBM and Dell

Answer 20

T/O means you have to be willing to say no to customers T/o narrows the scope and target market of the firm, making it harder to grow sales aggressively walls street is obsessed with growth some CEOs are obsessed with growth, more power, publicity and compensation

Answer 21

is the competitive advantage that a company earns by being the first to enter a specific market/industry and establish a position

Answer 22

economic scale learning effects network effects

Answer 23

N.E. is evident when a networks value to a user depends on the # of other users with whom they can interact network effect is evident when the value per user rises as the total # of users rise

Answer 24

``` new entrants suppliers buyers rivalry among existing firms substitutes complementors ```

Answer 25

a player is your complementor if customers value your product more when they have the other player's product than when they have your product alone

Answer 26

a player is your competitor if customers value your product less when they have the other players product than when they have your product alone

Answer 27

a player is your compementor if its MORE attractive for a supplier to provide the resources to you when its also supplying to the other player than when its supplying you alone

Answer 28

a player is your competitor if its LESS attractive for a supplier to provide resources to you when its also supplying the other player than when its supplying you alone

Answer 29

competition and cooperation

Answer 30

``` fragmented emerging mature declining hypercompetitive network ```

Answer 31

industries in which a large # of small or medium-sized firms operate and no small set of firms has dominant market share or creates dominant technologies

Answer 32

large # of small firms no dominant firms no dominant industries commodity type prodcuts low barriers to entry few, if any, economies of scale

Answer 33

consolidation: buy competitors build market power exploit economies of scale

Answer 34

newly created industries formed by technological innovations, changes in demand, the emergence of new customer needs etc

Answer 35

new industry based on break through technology/product no product standard has been reached no dominant firm has emerged new customers come form non-consumption not from competitors

Answer 36

first mover advantages: technology locking up assets creating switching costs

Answer 37

industries characterized by declining growth in total industry demand

Answer 38

``` slow growth in industry demand technology standard exists increasing international competition industry-wide profits declining industry exit is beginning ```

Answer 39

refine current products improve service process innovation

Answer 40

industries that have experienced an absolute decline in unit sales over a sustained period of time

Answer 41

industry sales have sustained pattern of decline some well-established firms have exited firms have stopped investing in maintenance

Answer 42

market leadership niche harvest divest

Answer 43

industries in which the way competition evolves is both unstable and unpredictable (ex: music download, biotechnology)

Answer 44

may look like any of the other industries any time

Answer 45

flexibility (the liability to change from one strategy to another) proactive disruption (go for temporary competitive advantages, satisfy current customers while constantly creating new products)

Answer 46

industries in which the value of a product or services being sold depends at least in part on the number of those products or services being sold (ex: phones, fax, machines)

Answer 47

may look like any of the other four industries | ex: an industry may be an emerging AND network industry at the same time

Answer 48

first mover advantages may lead to winner-take-all

Answer 49

sometimes, the threats & opportunities facing firms in an industry are not identical (ex: mercedes does not need to deal with import quotas whereas lexus does) a strategic group is a set of firms that face similar threats and opportunities facing other firms in an industry if the first criterion holds but not the second one, the strategic group is logically equivalent to an industry

Answer 50

id group analysis: id principal strategic variables which distinguish firms. ex: single product vs. product family, private label vs. branded label, push vs. pull choose variables that produce the greates contrast btwn firms. Do not use correlated variables sometimes it is useful to begin grouping firms before selecting strategic variables position each firm in relation to these variables analyze the attractiveness of each group by perfoming a 5 force on each grp id the mobility barriers that inhibit movement of firms btwn grps

Answer 51

industry structure firm idiosyncracies: resource based view of firm

Answer 52

focuses on the idiosyncracies, costly to copy resources controlled by a firm----resources whose exploitation may give a firm a competitive advantage

Answer 53

value (relevance) rarity (scarcity) imitability ( sustainability) organization

Answer 54

``` r&d supply chain mgmt operations marketing & sales post sales services ```

Answer 55

set of choices that a corp makes to create value through configuration and coordination of its multimarket activities

Answer 56

of the scope of the corp. (product/market diversification, geographic focus and vertical boundaries)

Answer 57

the mgmt of activities and businesses that lie within the corporate hierarchy

Answer 58

``` economic political legal environmental socio-economic technological ```

Answer 59

1. evaluate enviornmental threats | 2. evaluate environmental opportunities

Answer 60

1. the better-off test | 2. the ownership test

Answer 61

denotes the markets in which the corp. has chosen to maintain a competitive presence

Answer 62

better off test: cost advantage = economies of scope ; the total cost of producing each product seperately willingness-to-pay advantage = cross-selling benefits; customers want a single point of contact

Answer 63

relationship-specific investments: vertical relationship tailor their assets to exchanges with each other in order to reduce production costs or boost the willingness of customers to pay downstream free riding: firms free-ride on the efforts of their competitor. customers use the services of one company but purchase from its competitor

Answer 64

transaction cost= production cost + governance cost

Answer 65

costs include of negotiating, writing, monitoring, enforcing, and possibly also bonding to the terms of the org. arrangement

Answer 66

does the presence of the corp. in a given geographic market improve the total competitive advantage of business units ove rand aboce what they could achieve on theri own?

Answer 67

does the ownership of the business unit in a given geographic produce a greater competitive advantatge than an alternative arrangement would produce?

exam 1 Flashcards

(94 cards)