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Strategic Management > Exam 1 > Flashcards

Exam 1 Flashcards

Prep Material

1
Q

Competitive Advantage

A

Firm use strategy to create:

1) Superior value for customers
2) Products hard to duplicate
3) Brand to costly to imitate

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2
Q

Strategic competitiveness

A

When firm successfully uses a formal and value creating strategy

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3
Q

Strategy

A

Set of commitments and actions to preform task efficiently and gain competitive advantage

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4
Q

Above-Average Returns

A

More than the investors expected from similar return of same amount

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5
Q

Risk

A

Uncertainty about economic gains and losses from investments

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6
Q

Average Returns

A

Investments that are just like others with the same amount of risk

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7
Q

strategic management process

A

Set of

1) Commitments
2) Decisions
3) Actions

required for strategic competitiveness and earn above-average returns

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8
Q

Hypercompetition

A

Firms that create:
1) Instability
2) Disruption
to the competitive landscape

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9
Q

global economy

A

Where Goods and Services move freely across geographic borders

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10
Q

Globalization

A

Large number of firms competing against each other with Goods and Services

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11
Q

Perpetual innovation

A

describe how rapidly and consistently new, technologies replace older ones

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12
Q

Knowledge

A

1) information
2) intelligence
3) expertise

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13
Q

Strategic flexibility

A

Set of capabilities to deal with demands and opportunities in uncertain competitive environment

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14
Q

Resources

A

Inputs to production process

1) Capital Equipment
2) Skills of individual employee
3) Patents
4) Finances
5) Talented Managers

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15
Q

Capability

A

Capability to perform a task

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16
Q

Core competencies

A

Capabilities serving as sources of competitive advantage

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17
Q

Vision

A

Plans for where the firm wants to achieve

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18
Q

Mission

A

Specifies the business in which the firms intends to compete

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19
Q

Stakeholders

A

Investors

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20
Q

Strategic leaders

A

people from different location using the strategic management process

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21
Q

Organizational culture

A

refers to the complex set of ideologies, symbols, and core values of the firm

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22
Q

What are the two Major Model used in Ch1

A

(I/O) model of above-average returns

The Resource-Based Model of Above-Average Returns

23
Q

The core assumption of the I/O model is that?

A

the firm’s external environment has more influence on the choice of strategies than internal resources

24
Q

What is the I/O Model used for?

A

I/O model is used to understand the effects on deciding what strategies to use in competing against rivals.

25
Q

What are the steps for Strategic management process

A

Analysis, Strategy, Performance

26
Q

What are the steps for I/O Model of Above-Average Returns

A 
The External Environment
An Attractive Industry
Strategy Formulation 
Assets and Skills
Strategy Implementation 
Superior Returns
27
Q

What is the purpose of strategic group

A

Analyzing an industry’s competitive structure.

competition, positioning, and the profitability of firms competing within an industry

28
Q

Five Forces are?

A

1) Power of Supplier
2) Power of Buyer
3) Threat of new Entrants
4) Threat of substitute products
5) Rivalry among competing firms

29
Q

Factors that drive Threat of new Entrants & substitute

A 
Economies of Scale 
Product Differentiation 
Capital Requirements 
Switching Costs 
Access to Distribution Channels 
Cost Disadvantages Independent of Scale 
Government Policy
30
Q

3 major parts of external environment

A

general environment
industry environment
competitor environment

31
Q

Limitation of Five Forces

A
  • Ignores internal factors
  • Assumes zero-sum game
  • doesn’t account for performance diff
  • No other External factors
  • static analysis
32
Q

PESTLE Analysis

A 
Political
Economic
Social
Technological
Legal
Environmental
33
Q

Difference between External & Internal Analysis?

A

External (Opportunities, Threats)

Internal (Strengths, Weaknessess

34
Q

Origin of the term Strategy

A

Strategos(Greek) - Art of the general

35
Q

2 Important type of Decisions?

A

Where do we compete - Corp Strategy

how to we compete - Business Strategy

36
Q

Take away from Alaska Gold Mine

A

Strategy involve trade-offs, uncertainty, competition

Drivers are External Environment & resources

learning how to be a Team player

37
Q

What Strategy is not

A

Big general goals “We want to win”

Operational effectiveness, competitive benckmarking, etc.

Description of what the company wants

38
Q

I/O Model Assumptions

A

External Environment imposes pressures

resources cause similar strategies

Resource differences among competitors are short-lived

39
Q

The Resource-Based Model

A

Building Competitive Advantage:

1) Resources
2) Capability
3) Core Competence

40
Q

List 5 business-level strategies

A
  1. Cost Leadership
  2. Differentiation
  3. Focused Cost Leadership
  4. Focused Differentiation
  5. Integrated Cost Leadership/Differentiation
41
Q

Cost(Leadership)-based Advantage

A

Provide Goods & Service than competitors with equivalent Willingness to Pay (WTP)

Lower Total delivered cost (TDC)

42
Q

Differentiation-based advantage

A

Provides unique product/service at a premium price.

Creates more customer-perceived differentiation increase Willingness to Pay WTP

WTP must be greater than Total delivered cost TDC

43
Q

Hybrid strategy(integrated cost leadership & differentiation

A
  1. Stuck in the middle
  2. differentiation can help understand
  3. Org Barrier
  4. Factors to succeed:
    a) Structural Separation
    b) Increase effort & complexity
44
Q

Gucci Case Takeaway

A

Repositioning(Doing a Gucci) - Turnover was becuz tight fit amongst various activities

Differentiation Strategy: selling more items and the brand (Gucci man)

Role of top management teams: working well as a team (Dom-Tom dream team)

45
Q

Resources

A

What a firm HAS

Tangible:
Fin
Physical
Org

Intangible:
Human, Social Capital, Knowledge, Corp culture, reputation

46
Q

Capabilities

A

What a firms DOES

47
Q

Competencies

A

Resources + Capabilities working together

48
Q

Value Chain

A

Shows sequence activities firms engages in when transforming inputs and outputs

49
Q

What are the 2 types of Activities?

A

Primary - Directly add value

Support - Indirectly add value

50
Q

What does Value do?

A

Explains how firms values creation breaks down

Helps identify relevant resources and capabilities

51
Q

Resources/Capabilities costly to imitate

A

History
Time to do it right
complexity
Copyright, Trademarks, patents

52
Q

VRIN Framework

A 
Valuable 
Rare
Difficult to imitate
Without substitutes
Sustainable competitive advantage
53
Q

eHarmony Case

A

Strong fit between external positioning and internal resources

Resources and Capabilities difficult to imitate

Strategic Management (1 decks)

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