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ETH: Introduction to Management > | ★ | Lecture 04 - Strategy: Business & Corporate Level > Flashcards

| ★ | Lecture 04 - Strategy: Business & Corporate Level Flashcards

1
Q

What is the difference between business and corporate strategy?

A
  • Business strategy
    How should we compete?
  • Corporate strategy
    What businesses should we be in?
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2
Q

What are the three business-level strategies? Explain each strategy!

A
  • Differentiation
    Uniqueness perceived by the customer (e.g. product technology, customer service etc. ..)
  • Cost leadership
    Low cost position
  • Focus
    Focus on specific segment only (niche product)
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3
Q

How do you call a strategy, which employs

  • differentiation
  • cost leadership
  • focus
A

Hybrid strategy

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4
Q

Name 2 key words associated with strategy?

A
  • Detailed plan
  • Long-term
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5
Q

What does strategy in the congruence model refer to? What is the central question for strategy? (2)

A

Allocation of resources (Business decisions) against demands, constraints and opportunities offered by the environment.

  • What businesses should we be in.
  • How should we compete to achieve competitive advantage?
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6
Q

What is the difference between strategy and strategy making?

A
  • Strategy: Outcome/Product
  • Strategy making: Process
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7
Q

What does diversification mean?

A

Entering a new business

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8
Q

What are the different types of diversification? (corporate level strategies) (3)

A
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9
Q

Roughly explain related and unrelated diversification for Gillette and GE?

A
  • GE: Electricity and health care
  • Gillette: Blades and razors
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10
Q

Explain the main difference between backward and forward integration!

A
  • Backward integration: To supplier (parntership)
  • Forward integration: To customer (service)
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11
Q

Name one example for horizontal integration!

A

PS4 and games

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12
Q

Name 2 dangers of an overall cost leadership strategy!

A
  • Easy imitation
  • Same raw materials (cost increase!)
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13
Q

Name 2 dangers of a differentiation strategy!

A
  • Easy imitation
  • Price too high
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14
Q

Name two dangers of a focus strategy!

A
  • Cost advantage may be 0 overtime
  • Competition
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15
Q

What are the stages of the industry life cycle? (4)

  • Name for each stage 2 characteristics and 1 strategy!

🌟

A
  1. Introduction
  • New unknown products and operating loses
  • Focus on R&D and marketing activities
  1. Growth (critical phase!)
  • Increase in sales and growing competition
  • Define product & brand, to achieve repeat purchasers!
  1. Maturity
  • Direct & price competition
  • Repositioning?
  1. Decline
  • Declining sales and increasing price competition
  • Check out competitors and act accordingly
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16
Q

Business-level strategy (Definition) (2)

A
  • A strategy designed for a firm or a division of a firm that competes with a single business.
  • It focuses on how the business will compete in its specific industry or market segment to gain a competitive advantage.
17
Q

generic strategies (Definition) (3)

A

basic types of business-level strategies based on ..

  • breath of target market
    (industrywide vs narrow market segment    )
  • type of competetive advantage
    (low cost vs uniqueness)
18
Q

overall cost leadership (Definition) (2)

A
  • a firm`s generic strategy based on appeal to the industrywide market using a competetive advantage based on low cost.
19
Q

What Is The Experience Curve And Why It Matters In Business (2)

A

decline in unit costs of production as cumulative output increases

20
Q

competetive parity (Definition) (2)

A

a firm`s achievement of similarity, or being “on par,” with competitors

with respect to strategic product characteristic ..

  • low cost,
  • differentiation,
  • or other, ..
21
Q

What is a focus strategy? (2)

A

A firm’s generic strategy based on appealing to a narrow market segment within an industry,

aiming to serve the needs of a specific group of customers more effectively than competitors who target a broader market.

22
Q

differentiation strategy (2)

A
  • a firms generic strategy based on creating differences in the firms product or service offering
  • by creating something that is perceived industrywide as unique and valued by customers.
23
Q

Differentiation
3 topics & 2 examples each

A

Prestige or brand image
BMW automobiles, Hotel Monaco

Quality
Apple, Michelin tires, Ruth`s Chris steak houses)

  • Innovation
    (Tesla Motors, Medtronic medical equipemnt)
  • Features
    (Ducati motorcycles, Cannondale mountain bikes)

Technology
North Face camping equipemnt, Martin guitars

  • Customer service
    (USAA financial sercises, Nordstrom department stores)
  • Dealer network
    (Caterpillar earthmving equipment, Lexus automobiles)
24
Q

Describe the role of competitive advantage in Management (3)

A

set of unique attributes or capabilities, ..

  • that allow a company to outperform its competitors
  • essential for long-term success
25
Q

Explain how managers can create value through corporate diversivication

  • Benefits (3)
A
  • expanding into new markets or industries (Strategically)
  • Align core competencies and resources.

Benefits

  • risk reduction,
  • economies of scope
  • innovation
26
Q

Explain how and why …

  • Formal Structure & Performance (2)
  • Informal Social Structure (2)

helps to implement strategy and achieve strategic goals

A

In practice, successful organizations recognize the interplay between formal and informal structures. They aim to strike a balance that aligns with their strategic goals.
~~~
Formal Structure & Performance
Organizes roles/responsibilities for strategic alignment. Performance management measures contribution to strategy.

Informal Social Structure
Influences employee alignment with strategic goals. Facilitates communication and collaboration for successful strategy implementation.
~~~

27
Q

What is the central question for strategy?

What does the strategy in the congruence model refer to?

A

Strategy

  • What businesses should we be in and how should we compete?
  • How do we achieve competitive advantage?

Congruence (effectiveness)

  • Business decisions about the allocation of resources against demands, constraints and opportunities offered by the environment.
28
Q

-

A

-

29
Q

What are the stages of the industry life cycle? Name for each stage two characteristics and 1 strategy! (4) X

A

● Introduction - New unknown products and operating loses - Focus on RND and marketing activities
● Growth - Increase in sale and increasing competition - Define product/brand
● Maturity - Direct and price competition - Repositioning?
● Decline - Declining sales and increasing price competition - Check out competitors and act accordingly

ETH: Introduction to Management (14 decks)

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