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SI422 > Midterm > Flashcards

Midterm Flashcards

1
Q

operational effectiveness

A

being better than enemy

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2
Q

strategy

A

doing activities differently

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3
Q

what is value creation?

A

inputs + value = outputs

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4
Q

how does the music industry case relate to value creation?

A

when value is created people in the supply capture it

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5
Q

what is value capture?

A

created value each party can internalize (profits they can “capture”)

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6
Q

what is competitive advantage?

A

firm > industry average

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7
Q

industry evolution

A
  1. firms changing the industry
  2. society influencing the industry
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8
Q

example of industry evolution

A

ducati didn’t enter the cruiser market to compete against harley (less rivalry)

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9
Q

strategic activity map

A

aligning strategies to the firm’s goals

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10
Q

example of strategic activity map

A

trader joe’s:
1. sailor theme
2. worker’s pay
3. attractive to college

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11
Q

what determines industry profitability?

A
  1. suppliers
  2. buyers
  3. rivalry/substitutes
  4. threat of entry
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12
Q

how do we approach the five forces?

A

industry level > ”what does the industry look like right now for the firms in it?”

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13
Q

factors creating low supplier power

A
  1. many suppliers
  2. low switching costs
  3. industry important to supplier
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14
Q

factors creating low buyer power

A
  1. many buyers
  2. high switching costs
  3. industry important to buyer
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15
Q

factors creating low rivalry

A
  1. few rivals
  2. growing industry
  3. low exit barriers
  4. high switch costs
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16
Q

if barriers to entry are high

A

threat of entry is low

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17
Q

factors creating high BTE

A
  1. high capital req
  2. cost disadvantage for new entrants
  3. access to distribution difficult
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18
Q

fixed costs vs BTE

A

how numerical costs (ie startup) impact barriers to entry

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19
Q

who are the buyers in the grocery industry?

A

wholesalers not the consumers (so if the wholesalers open a cereal factory they influence threat of entry)

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20
Q

what is differentiation strategy?

A

about product quality NOT being different

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21
Q

what’s the differentiation strategy impact?

A

high profits if maintain similar pricing

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22
Q

what’s the cost leadership impact?

A

cheap but must maintain quality

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23
Q

relative cost analysis

A

product cost break down by activity

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24
Q

when is relative cost analysis most appropriate?

A

for less diversified firms (ducati + trader joe’s)

25
Q

what is the VRIO framework?

A
  1. valuable (resource)
  2. rare (resource)
  3. hard to imitate (resource)
  4. organized to capture value (firm)
26
Q

if you pass the VRIO framework

A

firm has long term competitive advantage

27
Q

if a firm’s resource is not valuable

A

competitive disadvantage

28
Q

if a firm’s resource is not rare

A

compete on price

29
Q

if a firm’s resource not hard to imitate

A

temporary competitive advantage

30
Q

if a firm’s not organized to capture value

A

temporary competitive advantage

31
Q

what is organized to capture value?

A

do resources capture value (ie Google’s employees ideas)

32
Q

what is non market strategy?

A

things firms do to leverage themselves (ie lobbying, government incentives, etc)

33
Q

what are market failures?

A

opportunities for non-market strategies to be relevant (no market failure means no opportunities to lobby)

34
Q

types of market failures

A
  1. monopolies (raise prices w/out losing customers)
  2. public goods (no rivalry)
  3. externalities (costs firms can impose on others (ie. carbon affecting the public)
  4. information asymmetry
  5. transaction costs
35
Q

what are non-market strategy goals?

A
  1. improve industry profits
  2. improve against rivals
  3. improve social environment
36
Q

OITT framework

A
  1. opportunity (improve profits)
  2. interest (stakeholders)
  3. targets (goals)
  4. tools (resources)

what is the opportunity, who is interested, what is their goal and what resources can be used?

37
Q

why don’t firms pursue CSR?

A
  1. let them eat cake (max profit)
  2. icing on cake (greenwashing)
  3. deserves cake (stakeholder)
  4. have cake + eat (win/win)
38
Q

what is leadership advantage?

A

not the advantages of first but is first advantageous in the long run? (extended impact!)

39
Q

network effect

A

advantageous when other people are on it (social media)

40
Q

learning effect

A

producing more units increases efficiency in making the product

41
Q

pioneering cost

A

will the guys after benefit from my initial costs? (ie. mobile money case—convincing government + developing infrastructure)

42
Q

horizontal integration corporate strategy

A

moving across separate industries (can we lower our costs or raise WTP?)

43
Q

vertical integration corporate strategy

A

w/in one industry + quality impacted (can we lower costs or raise WTP?)

44
Q

better off test

A

does it lower cost or increase WTP? (ie. Apple iPad + Mac)

  1. passing = integrating + ownership
  2. failing = remaining separate
45
Q

ownership test

A

failing = firms need to reach contract agreement (long term vs short term)

46
Q

super soaker

A
  1. Johnson create a great toy.
  2. need distributor
  3. distributors capture most value
47
Q

lipitor

A

value creation declined (generic drug)

48
Q

music industry

A

record labels capture most value

49
Q

coke + pepsi (5 forces)

A
  1. bottling hard to replicate
  2. high barrier to entry
  3. bottlers have low power
  4. forward integration (more process control)
  5. marketing makes rivalry high
50
Q

coors

A
  1. shifted to more store vs bars
  2. people at home more
  3. high BTE from economies of scale
  4. wanted to narrow + differentiation
51
Q

ducati

A
  1. did not fight harley
  2. differentiation
  3. increased intangible value
52
Q

trader joe’s (strategic map + rca)

A
  1. small stores
  2. niche customer
  3. cost leader
  4. no branding
53
Q

zipcar (VRIO)

A
  1. marketing
  2. technology
  3. parking
  4. mainly not in VRIO
54
Q

mpesa

A
  1. networking effect
  2. pioneer cost
55
Q

tata

A
  1. indian law say 2% to CSR
  2. tata does although unprofitable
56
Q

apple

A
  1. horizontal integration
  2. economies of scale help
  3. innovation increase WTP
57
Q

disney + pixar (toy story)

A
  1. vertical integration
  2. disney needed pixar for toy story
  3. pixar leverage from relationship specific investment (toy story)
58
Q

easter eggs

A
  1. jellyfish protein
  2. questrom macy’s + JC penny
  3. bell telephone
  4. bu bridge
  5. US woman phd

SI422 (2 decks)

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