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Strategic Management > Final - Strategic > Flashcards

Final - Strategic Flashcards

1
Q

Long-tail

A

A business model in which companies can obtain a large part of their revenues by selling a small number of units from among almost unlimited choices.

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2
Q

Competition

A

A process driven by the perennial gale of creative destruction

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3
Q

Invention

A

The transformation of an idea into a new product or process or the modification and recombination of existing ones

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4
Q

patent

A

a form of intellectual property that gives the inventor exclusive rights for a period of time

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5
Q

double edge sword

A

refers to the idea that patents give you a monopoly for a period of time, but you have to give competitors your entire underlying technology which could lead to imitation

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6
Q

Trade secret

A

valuable proprietary information that is not in the public domain where the firm makes every effort to maintain its secrecy

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7
Q

innovation

A

the commercialization of any new product or process or the modification of existing ones

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8
Q

first mover advantage

A

This says there are competitive benefits to being the first innovator in the market as you can lock in key suppliers and have complete market advantage. But there are more costs associated with spending on R&D, needing to educate consumers, and the second mover can copy but do it better

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9
Q

imitation

A

if and when an innovation is successful competitors will imitate it

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10
Q

The fourth industrial revolution

A

we are currently in the fourth Industrial Revolution that is characterized by AI and automation advancements

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11
Q

Entrepreneurship

A

the process by which change agents under take economic risk to innovate

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12
Q

social entrepreneurship

A

innovating for the purposes of social goals

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13
Q

strategic entrepreneurship

A

the pursuit of innovation using strategic techniques

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14
Q

Industry life cycle

A

Cycle that explains the stages of an industry from introduction, growth, shakeout, maturity to decline

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15
Q

Introduction

A

the first stake of the industry life cycle that is characterized by high R&D costs, few individuals in the market the invention has just become an innovation. Need to educate consumers and find distribution channels.

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16
Q

growth

A

Second phase of the industry life cycle characterized by market expansion. Here economies of scale is accessed and fits are finding new ways to accelerate growth

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17
Q

Shakeout

A

the third stage of the industry life cycle in which growth declines, and firms begin to compete. Here the firms that maintain are the ones that achieve a cost leadership or differentiated strategy

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18
Q

Maturity

A

this is the 4th stage of the industry life cycle and the industry is now an oligopoly with only large firms. the market has reached its max size and industry growth is zero

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19
Q

decline

A

this is the last stage of the industry growth cycle where changes in the external environment move industries demand to fall

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20
Q

crossing the chasm framework

A

this framework shows how each stage of the industry life cycle applies to a different customer group

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21
Q

tech enthusiasts

A

a customer group that adopts new technologies during the introduction stage of the industry life cycle.

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22
Q

early adopters

A

customers entering during the growth stage of the life cycle because they are eager to buy the newest technologies

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23
Q

early majority

A

these are consumers entering during the shakeout stage of the life cycle. they buy technology that has a practical purpose in their life

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24
Q

Late majority

A

consumers that come in at the maturity stage and they are often afraid of having to learn new technology

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25
Q

Laggards

A

consumers coming in at the decline stage and will only get new tech when it is necessary

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26
Q

Incremental innovation

A

innovation that steadily builds on existing products and services

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27
Q

radical innovation

A

innovation that draws on novel methods from an entirely different knowledge base or draws from existing ones

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28
Q

architectural

A

a new product in which known components based on existing technologies are reconfigured

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29
Q

disruptive innovation

A

innovation that leverages new technology to attack existing markets

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30
Q

platform business

A

business’ that scale more efficiently because they eliminate gatekeepers and leverage technology

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31
Q

corporate strategy

A

the decisions that management makes to gain and sustain competitive advantage

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32
Q

vertical integration

A

The firms ownership of the inputs needed for production or of the channels through which is distributes its outputs

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33
Q

horizontal differentiation

A

which products and services they should offer

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34
Q

geographic scope

A

where they should operate

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35
Q

Transaction Costs

A

all internal and external costs associated with an economic exchange whether within the firm or external

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36
Q

external transaction costs

A

costs of searching for a firm or individual with whom to contract with

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37
Q

internal transaction costs

A

costs pertaining to organizing an economic exchange within the organization

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38
Q

Determining whether to make or buy

A

in some cases the costs of using the market (external transaction costs) may be higher than the costs of integrating the activity within a firm (internal transaction costs) when these costs of pursuing in house is less then the firm should vertically integrate

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39
Q

advantages for making in firm

A

command and control over decisions, coordination, transaction specific investments

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40
Q

disadvantages for making in the firm

A

administrative costs, low powered incentives, principal agent problems

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41
Q

advantages for markets

A

high powered incentives and flexibility

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42
Q

disadvantage for markets

A

search costs and incompetence contracting

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43
Q

Short term contracts

A

A frim sends out requests for proposals to several companies initiating competitive bidding for contracts with the shortest duration

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44
Q

strategic alliance

A

voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities

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45
Q

licensing

A

a form of long term contract in the manufacturing sector that enables firms to commercialize intellectual property

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46
Q

franchising

A

a long term contract in which a franchisor grants franchisee the right to use the franchisors trademark

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47
Q

equity alliance

A

a partnership in which at least one partner takes partial ownership of other partner

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48
Q

credible commitment

A

a long term strategic decision that is both difficult and costly to reverse

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49
Q

join venture

A

a stand alone organization created and jointly owned by two or more parent companies. Company A and Company B came together to create company c

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50
Q

Parent subsidiary relationship

A

the corporate parent owns the subsidiary and can direct it via command and control

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51
Q

Industry value chain

A

description of the transformation of raw materials into finished goods and services along distinct vertical stages

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52
Q

backward vertical integration

A

changes in an industry value chain that involve moving ownership of activities upstream to the originating point o the value chain. Moving toward the buying supplier and away from customer

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53
Q

forward integration

A

changes in an industry value chain that involve moving ownership of activities closer to the customer

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54
Q

Taper integration

A

a way of orchestrating value activities in which a firm is backwardly integrating but also relies on outside market firms for some of its spies

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55
Q

strategic outsourcing

A

moving one or more internal value chain activities outside the firms boundaries to other firms

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56
Q

diversification

A

an increase in the variety of products and services a firm offers or markets and the regions that it competes

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57
Q

Product diversification

A

Corporate strategy in which a firm is active in several different product markets

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58
Q

Geographic diversification

A

corporate strategy in which a firm is active in several different countries

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59
Q

product market diversification

A

corporate strategy in which a firm is activity in several different products in several different markets

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60
Q

Related diversification

A

corporate strategy in which a firm derives less than 70% of its revenues from a single business activity

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61
Q

related constrained diversification

A

a kind of related diversification strategy in which executives pursue only businesses where they can apply the reduces they already have

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62
Q

related linked diversification

A

a kind of related diversification in which less than 70% of a firms revenues come from a single business but activities share linkages to the main business

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63
Q

unrelated diversification

A

less than 70% of a firms revues come forma a single business strategy and there are few if any linkages among businesses

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64
Q

Conglomerate

A

a company that combines two or more strategic business unites under one overarching corporation follows an unrelated diversification

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65
Q

Boston consulting groups growth share matrix

A

a corporate planning tool which the corporation is viewed as a portfolio of business units which are represented graphically along relative market share and speed of market growth

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66
Q

Dogs

A

underperforming businesses that have small market share and low growth market, they have low and unstable earnings. Should be harvested

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67
Q

Cash Cows

A

compete in low growth markets but hold high market share. invest in these

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68
Q

star

A

high market share in a high growth market. earnings are high you should invest

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69
Q

question mark

A

low market share in a high growth market. unclear whether they will become stars or dogs. earnings are low and unstable but growth market is high

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70
Q

Build borrow buy framework

A

conceptual model that aids firms in deciding whether to pursue internal development, enter contracts or build alliances, or acquire a new resource, capabilities and competencies

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71
Q

resources

A

include capabilities and competencies. These are valuable when they are rare and difficult to imitate

72
Q

relevancy

A

ig the resource is relevant to the firms internal resources they should build

73
Q

tradability

A

a traceable resource is one that the firm is able to source externally through a contract that allows for the transfer or ownership. if it is highly tradable they should borrow

74
Q

closeness

A

only if there is extreme closeness to the source partner would you buy

75
Q

integration

A

how well can you integrate the targeted firm as a resource partner. Should only integrate if there is low relevance and traceability, but high closeness

76
Q

Complementary assets

A

assets such as marketing, manufacturing and after sales service that are needed to commercialize a new product or service successfully

77
Q

Co-optition

A

cooperation by competitors to achieve a strategic objective

78
Q

learning races

A

situations in which both partners in a strategic alliance are motivated to form an alliance for learning but the rate at which the firms may vary

79
Q

Non-equity alliance

A

partnership based on contracts between firms

80
Q

explicit knowledge

A

knowledge that can be codified, concerns knowing about a process or product

81
Q

tactic knowledge

A

knowledge that cannot be copied, concerns knowing how to do a certain task and can be acquired through activite participation (equity alliances)

82
Q

venture capital

A

equity investments by established firms in entrepreneurial ventures

83
Q

alliance management capability

A

a firms ability to effectively mange three alliance related tasks concurrently

84
Q

partner capability

A

cultural fit between firms when forming alliances

85
Q

partner commitment

A

concerns the willingness to make the necessary resources available and to accept short term sacrifices to ensure longterm rewards

86
Q

Merger

A

the joining of two independent companies to form a combined entitiy

87
Q

acquisition

A

the purchase or takeover of one company by another

88
Q

hostile takeover

A

acquisition in which the target company does not wish to be acquired

89
Q

horizontal integration

A

the process of merging with competitors leading to industry consolidation

90
Q

Managerial hubris

A

a form of self-delusion in which mangers convince themselves of their superior skills in the face of clear evidence to the contrary

91
Q

Why do firms acquire others

A

to access new markets, to overcome entry Barries, to access a new capability

92
Q

Globalization

A

the process of closer integration and exchange between different countries and people worldwide

93
Q

Multinational Enterprise

A

a company that deployed resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries

94
Q

global strategy

A

part of a firms corporate strategy to gain competitive advantage when competing against other foreign and domestic companies around the world

95
Q

Globalization 1

A

all important business functions were in the home country, only sales and distribution took place over seas

96
Q

Globalization 2

A

MNEs began to create smaller self-contained copies of themselves with business functions in tact

97
Q

Globalization 3

A

world trade organization came

98
Q

globalization 3.1

A

many black swan events have buffeted the world economic contributing to the rise of nationalism

99
Q

Advantages to globalization

A

gain access to larger markets, gain access to low-cost input factors, develop new competencies

100
Q

location economies

A

benefit from locating value chain activities in the worlds optimal geographies for specific activity

101
Q

Disadvantages of globalization

A

Liability of foreignness, loss of reputation loss of intellectual property

102
Q

liability of foreignness

A

additional costs of doing business in an unfamiliar cultural and economic environment and of coordinating across geographic regions

103
Q

CAGE distance framework

A

a decision framework based on the relative distance between home and a foreign target country along cultural distance, administrative distance, geographic distance, and economic distance

104
Q

Cultural distance

A

C in the cage framework that says cultural disparity between an internationally expanding firms home country and its targeted host country.

105
Q

Administrative and political distance

A

the A in the CAGE framework that says the distance can increate with political hostilities, weak legal institutions and the absence of a shared currency

106
Q

Geographic distance

A

G in CAGE framework that says the distance increases with a lack of common border, physical remoteness and time zone differences

107
Q

Economic distance

A

E in CAGE framework that says distance increases with different consumer incomes, costs, and information

108
Q

Globalization Hypothesis

A

assumptions act consumer needs and preferences throughout the world are converging and thus becoming homogenous

109
Q

local responsiveness

A

the need to tailor product and service offerings to fit local consumer preferences and host country requirements

110
Q

cost responsiveness framework

A

strategy framework that juxtaposes the pressures of multinational companys face for cost reductions and local responsiveness derive four different strategies

111
Q

International

A

strategy involved leveraging home based core competencies by selling the same product in both markets

112
Q

multi domestic

A

strategy pursued by MNEs that attempt to maximize local responsiveness with the intent that local consumers will perceive them to be domestic companies

113
Q

Global standardization

A

strategy attempts to reap significant economies of scale and location economies by pursuing a global diversion of labor based on wherever best of class capabilities are at the lowest cost

114
Q

transnational

A

strategy that attempts to combine the benefits of a localization strategy with those of a globalization standardization strategy

115
Q

Death of distance hypothesis

A

assumption that geographic location alone should not led to firm level competitive advantage because firms are now more than ever able to source inputs globally

116
Q

porters diamond framework

A

explains national competitive advantage through factor conditions, demand conditions, competitive intensity in a focal industry and related industries or complementary

117
Q

Strategy should proceed structure

A

strategy helps you identify where your core competencies are and where you will be most effective them you can build your structure around

118
Q

organizational design

A

the process of creating, implementing, monitoring, and modifying the structure processes and procedures of an organization

119
Q

inertia

A

a firms resistance to changing the status quo, which can set the stage for the firms subsequent failure

120
Q

Organizational structure

A

a key determining how the work efforts of individuals and teams are orchestrated and how resources are distributed

121
Q

specialization

A

an organizational element that describes the degree to which a task is divided into separate jobs

122
Q

formalization

A

an organizational element that captures the extent to which employee behavior is steered by explicit and codified rules and procedures

123
Q

centralization

A

an organizational element that refers to the degree in which decision making is concentrated at the top of the organization

124
Q

hierarchy

A

an organizational element that determines the formal position based reporting lines

125
Q

mechanistic organizations

A

characterized by high degree of specialization and formalization and by a tall hierarchy that relies on centralized decision making

126
Q

organic organization

A

characterized by a low degree of specialization and formalization a flat organizational structure and decentralized decision making

127
Q

simple structure

A

organizational structure in which the founders tend to make all the important strategic decisions

128
Q

functional structure

A

organizational structure that groups employees into distinct functional areas based on domain expertise

129
Q

ambidextrous organization

A

an organization able to balance and harness different activities in trade off situations

130
Q

ambidexterity

A

a firms ability to address trade offs over time

131
Q

exploitation

A

applying current knowledge to enhance firm performance in the short term

132
Q

exploration

A

searching for new knowledge that may enhance a firms future performance

133
Q

Disadvantages to the functional strategy

A

although it facilities rich communication between members of the same department it lacks communication between members in other departments and cannot address higher level of diversification

134
Q

multidivisional structure

A

organizational structure that consists of several distinct strategic business units each with its own profit and loss responsibility. SBUs operate independently and report to the corporate office

135
Q

matrix structure

A

organizational structure that combines the functional structure with multidivisional. the matrix organizational structure is where functional structure is combined with product groups

136
Q

open innovation

A

a framework for R&D that proposes permeable firm boundaries to allow a firm to benefit not only from internal ideas but from externals as well

137
Q

absorptive capacity

A

a fries ability to understand external technology developments evaluate them and integrate them into current products or create new ones

138
Q

organizational culture

A

the collectively shared values and Norms of an organizations members

139
Q

norms

A

unwritten rules that define appropriate employee attitudes and behaviors in employees day to day interactions

140
Q

values

A

define what is considered important

141
Q

artifacts

A

elements that allow corporate culture to be expressed such as via the design and layout of physical space,etc.

142
Q

strategic control and reward system

A

internal governance mechanisms put in place to align the incentives of principals and agents

143
Q

objectives and key results

A

a strategic reward and control system that helps a team and its individual members monitor objectives and outcomes

144
Q

input controls

A

mechanisms in a strategic control and reward system that seeks to direct employee behavior

145
Q

output controls

A

mechanisms that seek to guide employee savior by defining expected results

146
Q

star model

A

all is connected to create employee behaviors that leads to behaviors ultimately creating culture and performance

147
Q

corporate governance

A

a system of mechanisms to direct and control an enterprise in order to ensure that it pursues its strategic goals successfully and legally

148
Q

agency theory

A

a theory that views the firm as a nexus of legal contracts

149
Q

adverse selection

A

a situation that occurs when information asymmetry increases the likelihood of selecting the wrong agents

150
Q

moral hazard

A

a situation in which information asymmetry increases the incentive of one party to shirk other responsibilities because the costs incurred to the other party

151
Q

board of directors

A

the centerpiece of corporate governance composed of inside and outside directors who are elected by shareholders

152
Q

role of the board of directors

A

make annual budget, set company rules, responsible for organizational performance, elect CEO and organize compensation for C-Suite

153
Q

major challenges a board may face

A

shareholder interests may not be uniform

154
Q

inside directors

A

board members who are generally party of the companies senior management team, appointed by shareholders to provide internal information

155
Q

CEO duality

A

Situation where CEO of company is also on the board

156
Q

Outside directors

A

board members who are not employees of the firm but who are executives of other companies

157
Q

stock options

A

an incentive mechanism to align the interests of shareholders and managers by giving them the recipient the right to buy company stocks

158
Q

leveraged buyout

A

a single investor or group buys with the help of borrowed money the outstanding shares of a publicly traded company to make it private

159
Q

poison pill

A

a defensive mechanism to deter hostile takeovers by making the target firm less attractive

160
Q

winners curse

A

in a hostile take over the buyer generally overpays for the transaction

161
Q

business ethics

A

an agreed upon code of conduct in business based on societal norms

162
Q

codes of conduct

A

go beyond the minimum acceptable standard codified by law to detail how the firm expects employees to behave and represent them in business dealings

163
Q

business models

A

how business intends to make money

164
Q

strategy

A

a set of goal directed actions a firm takes to gain and sustain superior performance relative to competitors

165
Q

razor blade model

A

initial product is sold at a loss to drive up demand for complementary good

166
Q

subscription

A

user pays for access to a product or service regardless of if or how much they use it

167
Q

pay as you go

A

user pays for what they consume

168
Q

freemium

A

the basic feature is free but for premium service it is more expensive

169
Q

ultra low cost

A

a model in which basic service is provided at a low cost and items are sold at a premium

170
Q

wholesaler

A

the traditional model for retail in which something is sold to the retailer at a fixed price and retailers set their own price

171
Q

agency

A

producer relies on an agent to sell the product

172
Q

bundling

A

sells products for which demand is negatively correlated with a discount

173
Q

platform

A

creating a platform for consumers and producers to meet

174
Q

business model innovation

A

a firms competitive advantage based on product innovation

175
Q

long tail

A

business model innovating in which companies can obtain. large part of their revenues by selling a small number of units from unlimited choices

176
Q
A

Strategic Management (1 decks)

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