Final Exam Flashcards
What is the most important concept to understand if you want to succeed in business?
Value
Value
The subjective weight is assigned to an object, concept, or experience. The most important idea in business.
How many pieces are there of value?
4
How many traits are there of value?
2
What are the 4 pieces of value?
- Subjective
- Weight
- Assigned
- Target
Subjective
Opinion
Weight is
Importance
Assigned
By whom?
Target
Object, concept, experience, etc
2 traits of value
- Malleable
- Not necessarily logical
What does malleable mean?
Changeable
How is marketing related to value?
Pricing
How is management related to value?
Maslow’s hierarchy of needs
How is finance related to value?
Commodities exchanges
How is accounting related to value?
Depreciation schedules
How is information systems related to value?
Double the bandwidth but costs 4x the price
What is strategy?
A general plan to achieve one or more goals under conditions of uncertainty
What are the 4 types of strategic analysis?
- General Environment
- Industry
- Competitor
- Internal
What is General Environmental Analysis?
Focuses on the trends, predict the segments that you expect to have the most influence on your firm in the next several years
7 segments of the general environment
- Demographic
- Economic
- Political/legal
- Sociocultural
- Technological
- Global
- Physical
Industry Analysis
Understanding your position relatives to other companies in your industry
Competitor Analysis
Analyzing each of the firm’s primary competitors. Should identify competitors’ current strategies, strategic mission, capabilities, core competencies and a competitive response profile
Internal analysis
The process of examining an organization’s strengths and weaknesses. Determining how external factors affect your firm.
What are the 3 elements of strategy?
- Plan
- Goals
- Uncertainty
Analysis
(History)
- Breaking things down
- “What happened?”
- Explaining/ Telling
- Looking back
Synthesis
(Future)
- Combining things
- “What happens now?”
- “How?”
- Proposing/ creating
- Looking ahead
How much of the market share does coke own?
- 45%
- # 1 in the industry
- 25 subsidiaries
What are trends of the beverage industry?
Leaning toward more nutritional drinks, low calorie drinks
Who is Dr. Pepper owned by?
Keurig
What are the projections for the beverage industry
- The market is expected to grow annually by 2.3%
- Volume is expected to decrease by 2.5% for both
What is Pepsi’s market share?
25.9% with 23 subsidiaries
What percent of beverages at ACU go through Chart wells?
99%
How long are contracts with either coke or pepsi?
5 years
How long has ACU been with Pepsi?
1987
What percent of gross sales do we get from vending machines?
45%
What is ACU’s objective with the proposal?
Find best financial offer that meets the needs of the community
What makes Coke more desirable?
Diet Coke, Minute Maid, financial offer
Dr. Pepper
Both can pour fountain, but only Pepsi can vend it
What is the #1 drink dispensed at the bean?
Dr. Pepper
How much was the soft drink market worth in 2016?
250 Billion
How many serving of soda does the average person drink in a year?
600 servings
How much is the soda market projected to be worth in 2025?
388 Billion
How many gallons of soda does the average person drink a year?
41 gallons
What is the product life cycle?
- Introduction
- Growth
- Maturity
- Decline
What is SWOT analysis?
Internal- Strengths, weaknesses
External- Opportunities, threats
What is the PESTEL analysis?
- Political
- Economic
- Social
- Technological
- Environmental
- Legal
Porter’s Generic Strategies
- Cost leadership
- Differentiation
- Cost focus
- Differentiation focus
What initiatives does Dr. Crisp have for COBA for 2022?
- Strengthen and grow academic programs (data management courses)
- Student development beyond the class room
- Upgrading building and facilities
What is the Black Swan?
- a surprise event, to the observer, that has a major effect
- It is then rationalized as something that should have been foreseen and prevented
- It is also generally seen as negative
How does one prepare for a black swan?
Plan broadly, stay flexible, and monitor relevant segments of the environment
What is the cost leadership strategy?
Focus on increasing profits by lowering operation costs and beating competitor on costs
What is differentiation?
Making your product or service unique to others, sales and marketing play huge role
What is a focus strategy?
Developing a specialized product for a niche market, need to understand the market that you’re selling to
Step 1: To choosing the right strategy
SWOT analysis
Step 2: To choosing the right strategy
Use 5 forces analysis
Step 3: To choosing the right strategy
Compare SWOT to 5 forces, select segment that gives you strongest options
If you could cover one strategic model what would it be?
Competitive advantage
Consumers make value-based decisions on what?
Trade offs
Why do we use Porter’s generic strategies?
To segment large markets and identify market gaps
RNR means
Revise and Resubmit
Choosing how to choose is what?
Our first choice
What is optimizing?
The best outcome
Time for optimizing is
High
Quality for optimizing is
High
What is settling?
Just want to be done
Time for settling is
Medium
Quality for settling is
Low
What is Satisficing?
Choosing a good enough alternative, meets your needs
Time for satisficing is
low
Quality for satisficing is
High enough
Frustration for optimizing is
high
Frustration for settling is
high
Frustration for satisficing is
low
Reasons we use satisficing:
Time and effort are expenses, we acknowledge the myth of perfection
Creating an advertising campaign which increases sales as much as possible is an example of what?
Optimizing
Using a campaign most people sort of like is an example of what?
Settling
Defining “Good enough criteria” is an example of what?
Satisficing
Strengths
What you do well, qualities that separate you from competitors, internal resources
Weaknesses
Things you don’t have, things your competitors do better than you
Opportunities
Undeserved markets for specific products, few competitors in your area, emerging need for your product
Threats
Emerging competitors, changing environment, negative press coverage, brand reputation
How to classify items for SWOT
- Is it internal or external?
- Is it positive or negative for us?
- Attend to big things
- Seek council when unsure
SWOT errors
- Mis-assessing internal/external guessing
- False assumptions
- Missed links between opportunities and strengths
MKTG
Technology adoption curve/ hype curve
MGMT
Succession planning, what to do if CEO leaves
FIN
McDonald’s seasonal mcrib sales
IS
Moore’s Law
Why do we use PESTEL analysis?
To assess trends and events in the external environment
War is an example of what?
Political
New cheaper battery is an example of what?
Technology, economic, environmental
Legal marijuana is an example of what?
Environmental
Average # of children falls is an example of ?
Social and environmental
Product development comes before what?
The introduction
Potential benefits of product development
- Predict sales/ uptake
- Evolve marketing over time
- Manage aging products
- Plan for new products
Potential caveats of product development
- A general estimate only
- Assumes profit is possible
- Every product curve is potentially unique
Porter’s Five Forces
- Threat of entry and mobility
- Threat of substitute
- Supplier power
- Buyer power
- Competitive rivalry
Tech adoption life cycle
- Innovators
- Early adopters
- Early majority
- Late majority
- Laggards
Innovators
AKA tech enthusiasts, first to get a new product
What percent is innovators?
2.5%
Early adopters
aka visionaries, least price sensitive group
What percent are the early adopters?
13.5%
Early majority
aka pragmatists, follow whatever the trend is
What percent is early majority?
34%
Late majority
aka conservatives, will only buy from well established companies
What percent is late majority?
34%
Laggards
aka skeptics, will not buy
What percent is the laggards?
16%
Where is the chasm?
Between early adopters and early majority
What makes up the early market?
Innovators and early adopters
What makes up the mainstream market?
early majority, late majority and laggards
Value
The total amount buyers will pay for the firm’s product
Margin
Customer is willing to pay more than sum of activity costs in value chain
Why do we use the TAC
- Plan for/ manage growth
- Use data to predict
- Shape MKTG message
- Know when to get out
Value Chain Analysis
Views a firm as a series of business processes that each add value to the product or service
Primary activities
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
- Service
Secondary/ Support activities
- Firm infrastructure
- HR management
- Technology development
- Procurement
Why use VCA?
- To improve efficiency
- Benchmarks
- Customer contact
- To eliminate $ losing operations
First mover
- an organization that’s first to bring product innovation to the market
- Don’t over-estimate FMA, expect to be attacked, have an innovation roadmap
Second mover is aka?
Fast follower
Fast follower advantages
- More likely to win
- Don’t need to be the first mover to the market
- Know what the market is for the products
- Use your existing place in the market/ existing resources to promote your new product
Second movers
Improve, don’t just copy, stay nimble and monitor environment closely
Late movers
unlikely to generate competitive returns
Gartner Hype Cycle
- Innovation Trigger
- Peak of inflated expectations
- Trough of Disillusionment
- Slope of enlightenment
- Plateau of Productivity
Root cause analysis
Continue asking the “why” questions until you get to the root of the problem
What is benchmarking?
Measure our performance against a standard
What is internal benchmarking?
The comparison of one function within your organization to another function within your organization
What is competitive benchmarking?
The comparison of an organization’s processes with those of competing organizations
What is strategic benchmarking?
Comparing firm competitiveness along several dimensions, against something world class
What are the 8 steps to benchmarking?
- Who
- What
- Document
- Data
- Compare
- Plan
- Implement
- Repeat
Why do we benchmark?
To improve performance and identify negative trends or competitive disadvantages
GIGO
Garbage in, Garbage out
Ideal
Good data, good model, useful results
Synergy
the hole is greater than the sum of the parts
God calls business to
Realignment
What are the two big topics covered in the God and business video
Purpose and practice
What is purpose
to create opportunities to engage people in their God given abilities
Business exists to serve
Internally and externally
What does profit mean?
the means for attracting the capital and allowing businesses to serve
Profit is a
tool and not the end goal
Capital is there for the company to
serve
Money is a tool to
do good and do no harm along the way
Porter’s five forces are
- Competitive rivalry
- Supplier power
- Buyer power
- Threat of substitution
- Threat of new entrants
Supplier power is?
The ability of suppliers to drive up prices of your inputs or raw materials
What is buyer power?
The strength of your customers to drive down your prices
What is threat of subsitution?
The extent to which different products and services can be used in a place of your own
What is threat of New entrants?
The ease with which new competitors can enter the market and potentially drive down your prices
What is a corporation?
A business owned by stockholders who share in its profits but are not personally responsible for its debts
Dodge Brothers vs. Ford motor
Dodge bros take ford to court to raise prices and dividends- ruling was the business decisions are not ruling of the court
What is a corporation’s sole purpose?
to provide profit to shareholders
CEOs say maximizing shareholder value
is not the most important
What is the Triple bottom line
People, Profit, planet
What is white night?
someone who comes in to help last minute
What are poison pills?
Refers to a defense tactic used by a target company to prevent or discourage a potential hostile takeover
What are the 3 P’s?
People, purpose, perspective
