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Strategy > Key concepts > Flashcards

Key concepts Flashcards

1
Q

Two models to explain above-average returns

A

I/O model (external perspective)

Resource-based model (internal perspective)

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2
Q

Three elements of the external environment

A

General environment
Industry environment
Competitor environment

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3
Q

Four parts to external environment analysis

A

Scanning
Monitoring
Forecasting
Assessing

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4
Q

8 segments of the general environment

A 
Demographic
Political/legal
Technological
Global
Sociocultural
Sustainable/physical
Economic
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5
Q

Five forces of competition model

A 
Threat of new entrants
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitute
Rivalry among competitors
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6
Q

Barriers to entry

A 
Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost disadvantages independent of scale
Government policy
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7
Q

Threat of new entrants is dependent on

A

Barriers

Expected relatiation

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8
Q

Bargaining power of suppliers is dependent on

A

Concentration
Substitute products
Switching costs

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9
Q

Bargaining power of buyers is dependent on

A

Purchase fraction
Switching costs
Differentiation degree

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10
Q

Rivalry among competing firms

A
  • Numerous or equally balanced competitors
  • Slow industry growth
  • High fixed costs or storage costs
  • Lack of differentiation or low switching costs
  • High strategic stakes
  • High exit barriers
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11
Q

Four dimensions of competitor analysis

A
  • Future objectives
  • Current strategy
  • Assumptions
  • Strengths and weaknesses
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12
Q

Sustainability of a competitive advantage depends on three factors

A
  • Rate of obsolescence
  • Availability of substitutes of core competence
  • Imitability of core competence
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13
Q

Three conditions that affect managers

A

Uncertainty
Complexity
Interorganisational conflicts

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14
Q

Elements of competitive advantage

A

Resources (tangible and intangible)
Capabilities
Core competencies

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15
Q

Two ways of assessing core competencies

A

VRCN model

Value-chain analysis

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16
Q

VRCN model

A

Valuable
Rare
Costly-to-imitate
Non-substitutable

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17
Q

Types of value chain activities

A 
Value chain activities (primary)
Support functions (secondary)
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18
Q

Benefits of outsourcing

A

Focus on core competencies
Increased flexibility
Easier to get rid of partners when needed (not integrated)

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19
Q

Risks of outsourcing

A

Reputation risks
Contract enforceability
Hold-up situation (supplier with high bargaining power)

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20
Q

Business-level strategies differentiate between two dimensions

A

Broad/narrow market segment

costs vs differentiation

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21
Q

Five types of business-level strategy

A 
Cost leadership
Differentiation
Focused cost leadership
Focused differentiation
Integrated cost/differentiation
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21
Q

Elements of the red vs blue ocean strategy

A 
Market space
Competition
Demand
Value/cost trade-off
Strategic choice
22
Q

Two elements of competitor analysis

A

Market commonality

Resource similarity

23
Q

Three drivers of competitive behaviour

A

Awareness
Motivation
Ability

24
Q

Two types of actions/responses

A

Strategic

Tactical

25
Q

Likelihood of attack is dependent on

A

First-mover benefits
Organisational size (smaller firms can be more dynamic)
Quality

26
Q

Likelihood of response is dependent on

A

Type of competitive action (strategical or tactical)
Actor’s reputation (past behaviour)
Market dependence

27
Q

Types of market cycles

A

Slow-cycle
Fast-cycle
Standard-cycle

28
Q

Three dimensions of corporate strategy

A

Business diversification (horizontal expansion)

Vertical integration

International expansion

29
Q

Five levels of diversification

A 
Single business
Dominant business
Related constrained
Related linked
Unrelated
30
Q

Three dimensions of transactions that affect governance choice

A

Uncertainty
Frequency
Asset specificity

31
Q

Three types of asset specificity

A

Site
Physical asset
Human asset

32
Q

Value creating ways of diversification

A

Economies of scope
(sharing activities and transferring core competencies)

Market power
(blocking competitors and vertical integration)
Financial economies
(efficient internal capital allocation and business restructuring)
33
Q

Three options to leverage synergies

A

Integration
Cooperation
Organisation

34
Q

Incentives to diversify

A

Antitrust regulation and tax laws
Low performance
Uncertain future cash flows
Synergy and firm risk reduction

35
Q

Types of acquisitions

A

Horizontal
Vertical
Related

36
Q

Reasons for acquisitions

A 
Increased market power
Overcoming entry barriers
Lower development cost/increased speed to market
Lower risk
Increased diversification
Reshaping competitive scope
New capabilities
37
Q

Problems in acquisitions

A 
Integration difficulties
Inadequate evaluation of target
Large or extraordinary debt
Inability to achieve synergy
Too much diversification
Managers overly focused on acquisitions
Too large
38
Q

Two dimensions to acquisition approaches

A

Need for organisational autonomy and need for strategic interdependence

39
Q

Four types of acquisition approaches

A

Preservation
Holding
Symbiosis
Absorption

40
Q

Four main motives for internationalisation

A

Natural resource seeking
Market seeking
Strategic resource seeking
Efficiency seeking

41
Q

Incentives for internationalisation

A 
Extend product's life-cycle
Easier access to raw materials
Integration opportunities
Developing technology opportunities
Access to emerging markets
42
Q

Three benefits of internationalisation

A

Increased market size
Economies of scale and learning effects
Location advantages

43
Q

Two types of international business strategies

A

Business-level

Corporate-level

44
Q

Four determinants of national advantage

A

Factors production
Firm strategy, structure and rivalry
Demand conditions
Related and supporting industries

45
Q

Four types of international corporate-level strategy

A

Global (centralised)
Transnational (mix global efficiency and local responsiveness)
Multidomestic (decentralised)
home replication strategy (just adding sales)

46
Q

Seven entry modes

A 
Exporting
Franchising
Licensing
Strategic alliances
Equity joint ventures
Acquisitions
Wholly owned subsidiaries (Greenfield ventures)
47
Q

Four C’s of strategic alliances

A

Complementarity
Congruent goals
Compatibility
Change

48
Q

Types of international environment risks

A

Political

Economic

49
Q

Trade-off in internationalisation strategy

A

Standardisation vs adaptation

50
Q

Three corporate governance mechanisms

A

Ownership concentration
Board of directors
Executive compensation

51
Q

Roles of subsidiaries

A

Strategic leader
Contributor
Implementer
Black hole

52
Q

Pyramid of ethical behaviour (bottom to top)

A

Complying with laws and regulations
Ethical behaviour
Corporate social responsibility

Strategy (4 decks)

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