intro strategy Flashcards
what is the blue ocean strategy?
- go where the profits and growths are - where competition is not
what effect does technology and globalization have?
-information of products and prices will be immediately available
-internet causing accelerated commodization
-niche markets quickly disappear
what causes accelerated commodization?
-when brands become more similar people will buy more on price causing the prices to decrease
-there are some brands that do a good job on differentiating themselves despite sharing similar functionality
how is the ipod a blue ocean strategy?
-it looked beyond the traditional customer -for music
-non-customers refused it but listened to digital music
-non-consumers- people who never considered an ipod or any other form of digital music
despite the ipod not being the first mpb3 player on the market it was the most successful, why was that?
apple did everything themselves making it easy for people to use
what does bliue ocean even mean?
-creates a new group of consumers
-creates industry not in existence
-most blue oceans are created within red oceans by expanding
what are the two main reasons why venture capitalist will not invest in a deal?
- they do not think the management team can pull it off ( do not believe in the people)
-risk profile is simply not commensurate with the potential rewards (imbalance between risk and reward)
what really matters at the end of the day?
market opportunity - of customers want what you have they will come at you until you deliver to them
what are differences between the red ocean and blue ocean strategy ?
red
-compete in existing market space
-beat the competition
-exploit existing demands
-make value cost trade off
-align the whole system of a firms activities with its strategic choice of differentiation or low cost
blue
-create uncontested market space
-makes comptition irrelevant
- create and capture new demand
-break the value costs trade off
-align the whole system of activities in pursuit of differentiation and low cost
why is value innvation the winning strategic approach?
-reduces the cost and increases the value of buyers (by enhancing a limited set of key factors that no one cares about)
-break the value cosy trade off
why are some orgs more successful than others ?
-luck, market timing, customer wants / management
what is a strategy?
Long-term plan for success concerned with deciding what business should be in, where it wants to be an how it will get there
what is a strategic plan?
- a plan that identifies critical direction and allocation of resources
What is strategic management?
is the process through which organizations:
= Analyze and learn from stakeholders inside and outside of the organization
=establis strategic direction
= Create strategies that are intended to help achieve established goals and execute those strategies
what does the broad environment consist of?
socio-cultural trends
tech trends
poltical trends
econmic trends
what are the global forces to monitor and predict?
economic growth
interest rates
trade deficits
what is task environment?
consists of external stakeholders like the customer, suppliers, competitors, unions, and government
what is a mission statement?
reflects what an organization is
what is a vision statement?
forward-looking
what are the multiple uses of a mission statement?
-used for decision-making and resource allocations but also letting the employees and customers know what they are all about
what were the three simple missions given to the CEO in Blue Ocean? and what do they not have?
- you own 100%
- t is the only asset you will ever have
-you cannot sell it
-there is no mission statement
what changes the world?
education research and discovery
what are Michael Porter’s five forces? and what is at the center?
-the entire industry is at the center of the model
power of customer
power of suppliers
the threat of potential entrants
availability and compatibility of substituents
competition among existing competitors
when suppliers have power…
-a small number of suppliers
-few substitutes
- suppliers are not dependent on the buyer
-industry must-have product
-costly to switch
