Exam# 1 Flashcards
Describe groupon
was very successful before 2011
- people who used groupon were not impressed
- small business were loosing thousands of dollars
- people who used group tend to spend less than their regular customers
- finding local businesses to use group required alot of work
- little repeat business
- bad CEO - ponny
What are the two types of leadership
- Romantic view of leadership
2. External control view of leadership
Is the romantic view of leadership implicit or explicit
Implicit
Describe the romantic view of leadership
the leader is the key force in determining the organizations success or lack of success ex. fortune, business week, forbes. ex. steve jobs
Describe the external control view of leadership
rather than making implicit assumption that the leader is the most important factor in determining organizational outcomes, the focus is on external factors that could affect the company
-ex .economic downturns, new tech, gov legislations, war
what is incremental management
a company making a series of small minor changes to improve the efficiency of the operations
what is strategic management
consist of the analysis, decisions and actions an organization undertakes to create and sustain competitive advantage
Describe the three parts of strategic management in detail
- Analysis- breaking into parts and looking at it in detail (ex. SWOT) - vision, mission, strat. objectives
- Decisions- 2 basis ?s. What indudustry should we compete in and how should we compete
- Actions- implementing the company’s trategies. ex. allocate resources
what is the essence of strategic management
- the study of why some firms outperform others. ex. advantages that are suitable for long periods of time
Describe in detail the two fundamental questions in strategic Management
- How should we compete to create competitive advantage in the market place. Ex. low cost, unique items
- Hows to create competitive advanatge in the marketplace that are unique, valuable and difficult for rivals to copy or substitute
what is operational effectiveness
preforming similar activities better than rivals ex just in time, total quality, benchmarking, outsourcing
how is sustainable competitive advantage achieved
only be preforming different activities from rivals or performing similar activities differently
What are the four key attributes of strategic Management
- Directed towards the overall goals of the organization
- Includes multiple stakeholders in decision makings
- Requires incorporating short term and long term perspectives
- recognize tradeoffs between effeciveness and efficiency
what is creative tension
- managers maintain a vision for the future and focus on present operational needs
what is the difference between effectiveness and efficiency
- effectiveness- doing the right thing
2. Efficiency- Doing things right
what is ambidexterity
- a managers challenges to align resources, take advantages of existing products and existing product markets
what is the strategic management process
- strategic analysis
- Strategic formulation
- implementation
Describe intended vs realized strategy
- intended strategy- strategy in which organization decisions are determined only by analysis
- realized strategy- organization descisions are determined by both analysis and unforseen environmental development ( combination of delivarate and emergent strategies)
what is the definition of strategy analysis
-study of a firms external and internal environment and thei fit with organization vision and goals
what is the definition of strategy formulation
decisions made by firms regarding investment, commitment, and other aspects of operations that create and sustain company advanatge
what is the definition of strategy implementation
actions made by the firms tat carry out formulated strategy, including strategic controls and organizations design
what is the definition of corporate governance
the relationship among various participants in determining the direction of performance of the organization ( how things are run and by whom)
what are the primary parts in corporate governance
- Management (CEO)
- Shareholders
- Board of directors
what are board of directors
- the elected representatives of the shareholders charged with ensuring the interest and motives of management are aligned with those of the owners
what are shareholders
owners of the company
who are stakeholders
supliers and customers- an individual or group inside or outside the company that has a stake and can influence and organizations performance ex. emplyees, supplies, creditors
describe the zero sum
various stakeholders compete for the organization resources, the gain in one is the loss of the other
describe stakeolder symbiosis
are dependent upon each other for their success and well being ex. detergent being compact and concentrated
descibe social responsibility
expectation that businesses will strive to improve averall wellfare of society- ex. recycle
ex. BP witholding info about oil spill in mexico
what is the tripe bottom line
involved assesing financial information, environmental performance and environmental sustainability
why are sustainability projects so hard to implements
- data is often not available to calculate ROI
- many of the benefits are not tangible
- payback period is on a different time frame
what is the strategic management prespective
an imperative throughout the organization ( people throughout the organization must strive towardsthe overall goal), ( not just the top does the thinking)
What are thre three types of leaders
- Local line leaders- profit and loss responsibilitty
- executive leaders- guide ideas, create learning info.
- internal networkers- little formal authority but generate their power through the cinviction og their ideas
what is the hierarchy of goals
organization of goals ranging from at the top, those that are less specific and able to evoke powerful imager and at the bottom more specific and measurable
what is the hierarchy of goals
vision
mission
strategic objective
what is a vision
organizational goal that evokes powerful and comp. images
ex. disney- to be the happiest place on earth
what is a mission
- includes the purpose of the organization , its scope of operations and the basis of its competitive advtg.
- present/ factoral statement/ longer
what is a strategic objective
- a set of organizational goals that are used to operazionalize the mission statement, are specific and covers a well defined time frame
what is the criteria for strateic objectives
SMART S-Specific M-measurable A- appropriate/ attainable R- realistic T- Timely
what happened to the company cell zone
- it misread the market and texting became their main form of communitation vs phones. they only sold 300 units
what is the theory of business
- interraleted sets of assumptions/ biases about the structure of the relevant business
- ex. how to make money in the business, who the competition is, and who thecustomers are
what is perceptual acuity
the ability to sence what is coming before the fog clears
what are the three processes to develop a forecast
- Environmental Scan
- Environmental monitoring
- Competitive intelligence
define environemental scanning
- survaillance of a firms external evironment to predict environmental changed and detect changes already under way.
ex. procter and gamble and the amount of people that buy makeup
define environemtal monitoring
tracks the evolution of environemtal trends, sequences of events or streaming of activities.
ex. johnson and johnson- % of GDP spent on healthcare
define competitiveintelligence
helps the firm define and understand their industry and identify rivals strenght and weeknesses
- ex. anticipates competitors moves
ex. fortune,wall stret journal - ex. airlines looking at other airlines and the pices they charge
what ar some website that are used to gather intelligence
- slideshare- powerpoints about the comp buss.
- quora- questions, answers
- Ispionage- reveals ad words companies are buying - new campaigns
- Youtube- interviews
what is environmental forecasting
- involves the development of plausible projections about te direction, scope, speed and intensity of environmental change. -predict change
what is scenario analysis
a more in-depth approach to forecasting
-it draws on a range of disciplines and interest, among them rconomics, psychology, sociology and demographics -projectino of future possible events
what is one of the most basic techniques for analyzising firm and industry conditions
SWOT ANALYSIS
what does swot stand for
- Strenghts
- weaknesses
- opportunities
- threats
which two categories of the SWOT analysis refer to the internal conditions of the firm
- strenght
- weeknesses
which two categories of the SWOT analysis refer to the external conditions of the firms
- Opporunities
- THREATS
what is the general idea of the SWOT analysis
- build on its strenghts
- remedy the weaknesses or work around them
- that advantage of opportunities
- protect the firm from threats
what is the definition of the general environment
- factors external to an industry , and usually beyond a firms control that affects a firms strategy.
what categories is the general environement divided
into
- demographic
- sociocultural
- poitical/ lega
- technological
- economic
- global
what does PPG industry have in place
-scenatio planning
describe the demographic segment of the general environment
genetic and observable characteristics of a population including the levels and growth of age, density, sex, education, geographic region and income
define the sociocultural segment
focuses on the values, beliefs, and lifestyles of a society
ex. higher percentage on women in the workplace
- greater concern for health
- greater interest in the environment
Define politica/ legal segment of the environment
how a society creates and exercises power, including rules, laws and taxation policies
ex. sarbanes oaley act- increase accountability of auditors (increase employment for accounting serv)
define the technological segment of the general environment
innovation and state of knowledge in industrial arts, engineering, applied sciences, and pure sciences and their interaction with society
define the economic segment
characteristics of the economy, including national income and monetary conditions
ex, interest rates
-unemployment rates
-GDP
define the global segment
influences from foreign countries, including foreign market opportunities, foreign based competition and expanded capital markets
ex. currency exchange rates, increasing global trade, trade aggrements
what is crowdsourcing
practice wherein the internet is used to tap a broad range of individuals and groups to generate ideas and solve problems
Ex.amazons reviews
What is a competitive environment
Consist of many factors that are particularly relevant to a firms strategy
Ex. Customers, suppliers
What tool is porters 5 forces considered to be
Analytical tool used for examining the competitive environment
What’s are the five competitive forces in porters five forces model
- Threat of new entrants
- The bargaining power of buyers
- The bargaining power of suppliers
- The threat of substitute product and services
- The intensity of rivalry among competitors in the industry
describe the threats of new entrants
the possibility that the profits of established firms in the industry may be eroded by new competitors
-extent of threats depends on existing barriers combined with reactions from customers
if entry barriers are high, what is the threat of entry
threat of new entrants is low
what are the six major sources of entry barriers
- economies of scale- spreading cost of production over the number or units produced
- Product differenciations- existing competitors have strong brand- ( customer loyalty)
- capital requirements - invest larg amount of money
- switching cost- one time cost a buyer faces when switching
- access to distribution channels- for product
- cost disadvantage independent of scale - aside from economies of scal ( gov subsidies, gov policies,)
describe the bargaining power of buyers
the threat that buyers may force down prices , bargaining for lower price, higher quality and play competitors against each other
when is a buyer group powerful
- concentrated on large purchase volumes
- products are standard or undifferenciated
- buyer faces few switching cost
- it learns low profits ( lower purchasing cost)
- buyer pose threats of backward integration
- product is unimportant to the quality of the buyers product or services
describe the barganing power of suppliers
- the threat that suppliers may raise prices or reduce the quality of purchased goods and services
when is a supplier group powerful
- supplier group is dominated by few companies and is is more concentrated then the industry it sells to
- supplier group it not obliged to contendwith substitute products
- the industry is not an important customer of the supplier group
- suppliers product is important input to buyers business
- product are differentiated and high swicthing cost for buyers
- supplier faces credible threat of forward integration
what are threats of substitue product and services
- the threat of limiting the potential returns of an industry by placing a ceiling on the prices that firms in that industry can charge
what are substitute product and services
products and services outside the industry that serve the same customers needs as the industrys products and services
describe the intensity of rivalry
the threat that customers will switch their business to comptetitors within the industry
ex- price competitions, advertising battles, product intro
what causes intense rivalry
- numerous competitors
- slow indutry growth
- high fixed storage cost
- lack of differentiation orswitching cost
- capacity augmented in large increments
- high exist barriers
what is a zero sum game
a situation in which multi players interact and winners win only by taking from other players
what are complements
-product or services that have an impact onthe value of a firms products or services
what are strategic groups
- clusters of firms that share similar strategies
what is the main topic when analyzing the firms internal environment
-heavy emphasis on the value- chain concept
what are some examples of key value-creating activiting ( internal environment of the firm)
-operations, marketing,sales.procurement
what are some of the weeknesses in a swot analysis
- strenghts may not lead to advanatges
- its focus on external environment is too narrow ( ex. fail to notices changes in env. )
- gives a one shot view of a moving target ( one moment in time only)
- it overemphasises a single dimension of strategy
is value chain the primary basis for evaluating a firms internal strenghts and weekensses?
NO- what are the downsides of a SWOT analysis
what is a good toold to use to evaluate a firms competitive position ?
value- chain analysis
what is a value chain analysis
view the organization as a sequential process of value creating activities/ a startegic analysis of an organization that uses value-creating activities
what is value
value is the amount that buyers are willing to pay for what a firm provides them
when is a firm proftable
when the value it receives exceeds the total cost involved in creating its product or service
what are the two different categories of activities in an organization
primary activities and support activities
what are primary activities
-contirbute to the physical creation of the product or service, its sale and ransfer to the buyer, and its service after sale
what are support activitiesin a value chain
- activities that either add value by themselves or add value through important relationships with both primary activities or support activities
ex. procurement, technology, HR, general administration
what are the primary activities
- inboound logistics, operations, outbound logistics, marketing and sales, service
what are the support activities
-procurement, technology deveopment, human resource management, general administration
describe inbound logistics
- primarily associates with receiving, storing, and distributing inputs to the product
ex. material handling, inventory control, return to suppliers
ex. JIT
describe operations
- all activities associates with transforming inputs into the final product form
ex. machining, packagin, assembly, testing, printing
comp. adj- envirom. friendly
describe outbound logistics
includes collecting, storing and distributing the product or services to buyers
ex. finished goods, warehousing, delivery vehicle operations, order processing, scheduling
describe marketing and sales as one of the primary activities
- activities associates with purchases of product and end services by end users and the inducements to get them to make purchases
ex. advert, promotions, relationsh, pricing- PRODUCT PLACEMENT
describe service as the last primary activity
actions associates with providing service to enhanse or maintain the value of the product
ex. installation, repairing, parts supply
describe procurement as one of the support activities
function of purchasing inputsin the firms value chain. Not only those going directly into the product but also machinery, laboratory, and buildings ex. reduce dependence on one supplier
decribe technolog development as one of the support activities
activities associates with the development of new knowledge that is applied to the firms operations
describe human reources as a supporting activity
activitiesinvolved in the recfuiting, hiring, training, development and compensation of all types of personnel
-supports both primaru and support activities
describe general administration as a supporting activity
activities that support the entire value chain and not individual activities
ex. GM, panning, finance, legal, quality, info sys.
what are interralationships
collaborative and strategi exchange relationships between, value chain activities.
what is crowd sourcing
- when a firms taps into the knowledge ideas og a large number of customer and stakeholders
ex. social medica- superbowl commercials
downside: customers hijack them and cause negative adv. instead of positive - ex. mcfdolands - lost weight eating less mckdonalds
what are resource based view of the firm
perspective that firms competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate and costly to substitute
what are the three types of resources that firms pocess
- tangible resources
- intangible resources
- organizational capabilities
what are the tangible resources in the company
- financial
- physical
- technological l
- organizational
what are intenagible resources
- human
- innovation and creativity
- reputation
what are organizational capabilities
not specific tangible or intangible assets but competenciones that a firm emplyss to transform inputs into outputs ex. customer service
what do firms recourses need to have in order to have sustainable advantage
- is it valuable
- is it rare
- can it be imitated easily
what can a company do to prevent inimitability
- physical uniquness
- path dependancy - hard to imitate because it ex. gerber
- causal ambiguity- difficult to imitate
- social complixity ex. honesty
- are substitutes readily available
four factors that help explain the extents of their profits
- employee bargaining power
- employee replacement cost
- employee exit cost
- managers bargaining power
how to evaluate a firms performance
- financial ratio analysis
2. staholder view through the balance scorecard
what is financial ratio
a tequnique for measuring the performance of a firm according to its balance sheet, income statement and market valuation
how can meaningful comparisons be made when analyzing financial ratios
- historical comparisons
- comparison with industry norms
- comparison with key comparisons
what are the different sections on a balance scorecard
- customers perspective
- internal business perspective
- innovation and learing perspective
- financial perspective
what is a knowledge economy
- an economy where wealth is created through the effective management of knowledge workers instead of the control of physical assets
what is intellectual capital
the difference between a firms market value and book value
- a measure of the value of the firms intangible assets
ex. reputation, employee morale, skills
what is human capital
the individuals capabilities, knowledge skills and experience of the companys employees and managers
what is social capital
the network of relationships that individuals have throughout the organizations
whatare the two forms of knowledge and descipe them
- explicit knowledge - codified, documented, and easily reproduced such as patents
- tacit knowledge- knowledge that is in the minds of emplyees and is based on their experiences and backgrounds
what are the three interdependence activities of human capital
- attracting human capital
- developing human capital
- retaining human capital
how do you attract human capital
- hire for attitute, train for skill
- sound recruiting approaches and networking -referrals
- attract millenials
what are some of the best practices to attract millenials
- dont mess with the sales pitch
- le thtem have a life
- no time clocks
- give them responsibility
- feedback and more feedback
- giving back matters
how to develop human capital
- encourage widespread involvement
- mentoring
- monitoring progress and tracking development
- evaluate human capital
- 360 evaluation and feedback system
how do you retain human capital
- identiy with the organization mission and values
- challenging work and stimulating environment
- financial and non financial rewards
how do you enhanse human capital
- by redifining jobs
narrower more focused jobdescriptions
-managing diversity
what are some pros of having a diverse workforce
- cost argument
- resource aquisition argument
- marketing argument
- creativity argument
- problem solving argument
- organizational flexibility argument
what is social network analysis
analysis of patterns of social iteractions among individuals
what is closure in social networks
- many members have relationships or ties with other members
- ex. do favors for each toher
- downside: cut themselves from the rest of the group
what is the dowside of social capital
- group think
* tendency to not question shared beliefs
what are intellectual property rights
intangible property owned by firm in the forms of patents, copyrights or trade secrets
what are dynamic capabilities
a firms capacity to build and protect a competitive advantage
