Midterm Review CH: 1,2,3,4,14 Flashcards
What is strategic management?
Formulating, implementing, and evaluating a company’s strategies.
What is strategy?
The company’s game plan.
What does the strategic management cycle look like?
Create mission and vision Internal and external assessment Create long-term objectives Generate, evaluate, select strategies Implementation Performance and evaluation
Strategic management achieves a firm’s success through ___________.
Integration
What does strategic management integrate?
Management Information management Human resources Research and development Marketing Finance/accounting Production (operations)
What are the aspects of a business strategy diamond?
Arenas Vehicles Differentiators Economic logic Staging (and pacing)
Adapting to change requires __________ focus.
Long-term
Strategic management involves gaining and maintaining ________________.
Competitive advantage
Considering external factors, the difference between intended and realized strategy depends on what?
Implementation levers and leadership.
What are implementation levers?
Structure
Systems
People
What is leadership?
Resource allocation and support
What are the specific targets for a company that have measurable outcomes?
Strategic goals/objectives
Describe what a company’s vision and mission are.
The fundamental purpose; values; a view of the future.
What are porters five forces?
Threat of substitutes Threat of new entrants Supplier (bargaining) power Buyer power Degree of rivalry \+ 1 complementors
Explain the degree of rivalry force.
How intense is the competition?
Will they fight or exit the industry?
Describe threat of new entrants.
How easy is it to enter the industry?
Cost, resources, government policies…
Explain threat of substitutes.
At what price will customers switch?
How easy is it to develop substitutes?
Explain bargaining (supplier) power.
How many suppliers are there?
How much power do they have?
What are the customer switching costs?
Define the bargaining power of customers.
How much do customers know?
How much power do they have?
Are products undifferentiated?
Define the complementors force.
Products in one industry increase sales in another.
Can working with buyers/suppliers add value?
Explain the stages of the industry life cycle.
Embryonic
Growing
Mature
In decline
What is a KSF and a value curve?
KSF - key success factors
Which are then plotted on a value curve based on the factors.
Describe the steps to doing an external factors evaluation (EFE) matrix.
- Summarize external factors (opportunities, threats)
- Rank importance of issue
- Evaluate the company’s response to the issues
- Calculate the average score of their responses to the issues
Give some examples of board duties.
Set strategy goals/direction. Hire/fire CEO. Supervise top management. Review/approve use of resources. Care for shareholder interests.
What are the types of directors?
Inside - management
Outside - non-management
Affiliated
When managers identify with company and will do what is right for company, what is this called?
Stewardship theory
What are the factors of PESTEL analysis?
Political Economical Socio-cultural Environmental Legal
What environment does PESTEL analyze?
Macro environment
Explain the resource-based view of competition.
Resources plus capabilities and strategic leadership create competitive advantage/disadvantage.
What are resources and capabilities?
Physical (plant, equip, tech, materials)
Human (people, collective experience, skills, knowledge)
Organizational (process, systems, culture, structure)
What does the VRINE framework summarize?
For testing competitive resources. Valuable Rare Inimitable Non-substitutabile Exploitable
What is a value chain?
A linked set of value-creating activities.
Explain how using value chains gain competitive advantage.
Identical -> differentiated processes
Different processes - long-lasting advantage
Better processes - short-term advantage
The systematic review of resources and capabilities of a business is considered what?
Internal assessment
Describe the steps of internal assessment.
1) VRINE analysis
2) value-chain analysis
3) internal factors evaluation
