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ETH: Introduction to Management > Mock Exam > Flashcards

Mock Exam Flashcards

1
Q

Information and Power Asymmetry in Blue-Sky Holdings

  • Information (2)
    Red, Green/Yellow
  • Main Cause (3)
A

Information and PowerAsymmetry in Blue-Sky Holdings

  • Redtail operational in regions with active senior management
  • Greenfields and Yellowfin centralized at corporate HQ,
  • → | creating a disconnect |

Main Cause:

  • Centralized divisions structure
  • HQ upper management,
    regional sepparation for operational divisions
  • → | Resulting in power imbalances favoring centralized divisions |
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2
Q

Missed Issues in Blue-Sky Holdings Entities.
(Missed Issue, Failure to Recognize ..)

  • Greenfields Ltd (2)
  • Redtail Ltd (2)
  • Yellowfin Ltd (2)
A

Greenfields Ltd:

  • Missed Issue:
    Overestimated monopoly position.
  • Failure to Recognize:
    External companies aiming for market share increase,
    discontent with lower project hierarchies and declining contract prices.

Redtail Ltd:

  • Missed Issue:
    Dependency on subcontracting
    for heavy lifting equipment.
  • Failure to Recognize:
    Greenfields Ltd’s decision to end internal contractual obligations, resulting in the loss of a primary revenue stream.

Yellowfin Ltd:

  • Missed Issue:
    Lack of awareness regarding government actions.
  • Failure to Recognize:
    Federal government actively reducing
    a. heavy industrial manufacturing,
    b. closing facilities,
    c. and offshoring contracts.
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3
Q

Environmental Changes
Affecting CBE

  • General Environment (2)
  • Competitive Environment (2)
A

General Environment

  • Technological Change
    Real-time data analytics standard; reduced CBE’s unique advantage and delivery time.
  • Government Regulations
    (EU & Tariffs)
    Forced CBE to raise prices due to regulatory changes and tariffs.

Competitive Environment

  • Increasing Competition
    Intensified competition as competitors matched or reduced delivery times.
  • Emergence of Substitutes
    (Online Shops of Flower Farms)
    Rise of online flower farm shops introduced substitutes, challenging CBE’s market position.
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4
Q

CBE’s Business-Level Strategy

  • Strategy
  • Evidences (5)
A

Strategy

  • Differentiation Strategy
    A generic strategy focused on creating unique and valued product or service offerings perceived industry-wide.

Evidences

Emphasis on Customer Economics (instead of supplier)

  • CBE focuses on meeting customer needs, providing a service (delivery time and rareness) for which consumers are willing to pay a premium.

Unique Differentiation
Three-Day Delivery Time

  • CBE guarantees a three-day delivery time throughout Europe,
    a unique offering compared to competitors who require around five days.

Customer Satisfaction Emphasis

  • CBE collaborates with customers on innovative applications and guarantees delivery time, reflecting a strong emphasis on customer satisfaction.

Offering Exotic and Premium Flowers

  • CBE’s product selection includes exotic and premium flowers, contributing to the unique and differentiated nature of their offerings.

Premium Pricing

  • CBE can charge a 15% premium compared to similar competitors, indicating that customers perceive and are willing to pay for the unique value provided by CBE’s differentiated offerings.
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5
Q

Congruence Model Elements and Example:
Apple Music

  • INPUT
    Environment (General, Competitive), History, Resources
  • STRATEGY
  • TRANSFORMATION PROCESS
    People, Informal (Culture), Work, Formal (Structure)
  • OUTPUT
A

INPUT

  • Environment
    • General
      Apple Music optimizes its sharing service with machine learning and sound technologies.
    • ★ Competitive
      Monitors Spotify, Amazon, and Chinese entrants.
  • ★ History
    Pioneered legal digital music with iPod.
  • Resources
    Leverages a strong brand, music label relationships, and financial strength.

STRATEGY

  • ★★ Differentiation ★★
    Pursues a global mass market with superior technology and continuous innovation.

TRANSFORMATION PROCESS

  • People
    Employs passionate experts valuing creativity and attention to detail.
  • Informal (Culture)
    Cultivates a culture with a high Achievement need and collaborative debates.
  • ★ Work
    Focuses on expertise in areas like machine learning and product design.
  • Formal (Structure)
    Adopts a functional structure for deep expertise development.

OUTPUT

  • Satisfaction (Education Customers)
  • Employee Satisfaction
  • Attraction (New Customers)
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6
Q

Diversity vs. Inclusion (2x3)

A

Diversity:

  • Definition:
    Involves bringing marginalized individuals into the workplace.
  • Nature:
    Can be voluntary or mandated; legislated.
  • Focus:
    Encompasses a mix of people and their unique attributes, acknowledging differences as a fact.

Inclusion:

  • Definition:
    Involves bringing marginalized groups into decision-making, ensuring equal access to resources.
  • Nature: Completely voluntary.
  • Focus: Ensures engagement, participation, and a sense of belonging; a choice emphasizing active involvement.
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7
Q

Name reasons for the give up of the consultant (3)

A
  • Political Power Play
    at Board Level
  • Organizations Working Against Each Other
    → Seen as Unwelcomed Outsider
  • Disdain (Geringschätzung)
    Against Middle Management & Subject-Matter Experts
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8
Q

Name reasons why the implementation failed! (2)

A
  • Lack of operational understanding
    (communication)
  • Conflicting strategies
    (missing congruence)
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9
Q

What was the outcome for Greenfields? (2) X

A

Lose of …

  • know how due to decoupling from Redtail
  • bargaining power against suppliers
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10
Q

What was the outcome for Redtail? (2) X

A

Loss of …

  • know-how
  • main Revenues stream due to decoupling from Greenfields
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11
Q

What was the outcome for Yellowfin? X

A

Loss of customer base
due to liquidation of Redtail

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12
Q

Name 3 reasons for the give up of the consultant!

A
  • Political power play
    at board level
  • Organizations work against each other
    Seen as unwelcomed outsider
  • Disdain against middle management and subject-matter experts
    leads to recruitment of new talent and effective freezing out of operation managers and subject-matter experts during strategy development
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13
Q

Name six reasons why the implementation failed! X

A
  • Little direction
    from the board
  • Conflicting strategies
    (missing congruence)
  • Convincing greenfields
  • Lack of operational understanding
    for Yellowfin (communication)
  • Yellowfin took activities from Redtail
  • Shadow inventory
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14
Q

Congruence Model
(Xerox - documentation)

In the early 1990s, the organizational structure resembled that of the Soviet Union, with a pyramid-like hierarchy.

However, the new CEO embarked on a mission to envision strategies for restructuring the business.

  • Problems (2)
  • Solutions (2)
A

Problems

  • Bureaucracy complexity
    hindering managers from making key decisions.
  • Excessive internal focus
    at the expense of customer demand.

Solutions

  • Comprehensive transformation touching all aspects: work,
  • structure, culture, and personnel. Dual-focused approach targeting
  • social
    (individual & cultural)
  • structural
    (strategy & work performance) enhancements.
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15
Q

PEST(LE) analysis:
TESCO - supermarket chain
(8)

A

Political:

  • Governments encourage domestic job creation in retail.

Economic:

  • Declining disposable income shifts focus to value brands.

Social:

  • UK consumers favor bulk & one-stop shopping => increasing non-food item sales.

Technological:

  • Online shopping with home delivery and self-checkout.

Legal:

  • FRC proposes a Code of Practice banning certain practices, like price changes without notice.
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16
Q

Business-Level Strategie
Swatch Group

  • Problems (3)
  • Solutions (3)
A

Problems:
1970s decline, mainly due to …

  • quartz watch invention,
  • Swiss companies’ self-satisfaction,
  • Chinese competition.

Solutions:

  • Shared production bases
    for cost efficiencies.
  • Utilized (Nutzung)
    Swiss watch tradition
    for affordable, stylish products.
  • Diversified into …
    Affordable vs. Expensive
    Sports vs. Refined categories.
17
Q

Differentiation Strategy

  • Key Components (4)
  • Benefits (4)
A

Key Components:

  • Product Innovation
  • Technological improvements
    (eg Distribution Channels, Customization & Quality)
  • Customer Service

Benefits: => Apple

  • Command premium prices.
  • Build customer loyalty.
  • Enhance brand reputation.
18
Q

Focus Strategy
Key Characteristics (4)

A
  • Niche Targeting:
  • Deep Understanding
  • Cost Leadership or Differentiation
  • Limited Scope
19
Q

Cost Leadership Strategy

  • Key Characteristics (4)
  • Advantages (3)
A

Key Characteristics:

  • Operational Efficiency
  • Standardization
  • Economies of Scale
  • Supplier Negotiations

Advantages:

  • Competitive pricing attracts price-sensitive customers.
  • Enhanced bargaining power in the industry.
  • Potential for higher profit margins despite lower prices.
20
Q

Shipbuilding Industry
General Environment

  • Politics, Technology, Economy
  • Competition

[⛵️ Case Sudy JoN]

A

Politics, Technology, Economy

  • Socio-political Exposure:
    Influenced by socio-political forces, especially in military projects.
  • Technological Edge:
    Vessels are advanced but built by heavy industrial organizations.
  • Massive Investments:
    Requires significant investment, often from taxpayers.

Competition

  • Limited Domestic Competition:
    Limited domestic competition; new entries rare without strategic, long-term investment.
  • Intense International Competition:
    Faces aggressive international competition.
21
Q

Shipbuilding Industry

  • Resources (5)
    (tangible → intangible)
A

Tangible Resources:

  • Complex plants require massive investments; operational continuity is crucial.

Unionization Impact:

  • Global shipbuilding, highly unionized, grants workers strategic bargaining power.

Corruption Challenges:

  • Waterfront industries globally historically prone to corruption.

Intangible Resources - Reputation:

  • Takes decades to build, proven in large-scale conflicts.

Intangible Resources - Knowledge/Skills:

  • Acquiring industry-specific knowledge/skills takes years;
  • risk of loss to international competitors.
22
Q

Shipbuilding Industry
[⛵️ Case Study JoN]
improve Strategy and Goals

  • Structure (3)
  • Congruence (6)
    What Holds the Organization Together
A

Defining Structure

  • Clear Vision
    for Competition and identity
  • Radical Reshaping
    start with strategic initiatives
  • Impact Consideration
    in Design (culture, politics, and behavior)

Congruence

  • Common Goals
  • Resource Allocation
  • Understanding Roles and Work
  • Performance Measurement
23
Q

ECL Holding - Shipbuilding Overview

  • Organization
  • Entities
  • Operations
  • ★ Porter’s Value Chain
  • ★ Strategic Goals
  • Challenge
A

Organization:

  • ECL Holding, a major shipyard conglomerate with a $2.5 billion turnover.

Entities:

  • Three independent entities:
    EC Ltd. (engineering and construction),
    MP Ltd. (maintenance and plant),
    CL Ltd. (Construction Logistics)

Operations:

  • Seasonal fluctuations, contractual agreements, diverse revenue sources.
  • Prioritizing revenue through cost reduction, process harmonization, and digitalization.

★ Strategic Goals:

  • Holding provides minimal directives emphasizing revenue maximization.

Challenge:

  • Mention of a potential “Kodak Moment,” highlighting the need for adaptability in a changing industry.
24
Q

Railtrack PLC Case - Privatization and Consequences

  • Background
  • Privatization ★
  • Railtrack PLC
  • Knowledge Outflow and Consequences ★
  • Renationalization and Network Rail
A

Background:

  • British Rail managed infrastructure (1948-1997), emphasizing modernization and economic service.

Privatization:

  • Adopted NPM principles, reducing subsidies, and introducing profit orientation.
  • Lack of clear mission led to confusion in the mixed economy.

Railtrack PLC:

  • Formed with goals like increased efficiency, customer focus, private investment, and clear standards.
  • Drawn from NPM principles and Transaction Cost Economics (TCE).

Knowledge Outflow and Consequences:

  • Aggressive outsourcing by Railtrack led to knowledge outflow.
  • Underinvestment and lack of experience caused major rail accidents, prompting renationalization in 2002.

Renationalization and Network Rail:

  • Network Rail took over infrastructure in 2002, in-housing maintenance, but construction remained outsourced
25
Q

Prorail Case - From Outsourcing to Alliance

  • Background
  • Challenges and NPM Arguments
  • Knowledge Outflow and Contracting Model
  • Core Activities and Measures
  • Preventing Knowledge Outflow
A

Background:

  • Dutch railway company NS aimed to modernize post-war infrastructure.

Challenges and NPM Arguments:

  • Loss of haul (Transportverlust) and inefficiency led to 1980s restructuring.
  • NPM principles for efficiency, competition, and network expansion.

Knowledge Outflow and Contracting Model:

  • Legal separation (1996-2002) prompted massive outsourcing.
  • Initial model shifted roles, but informal efforts prevented total loss of control.

Core Activities and Measures:

  • Identification of critical in-house skills for assessing contractors.
  • Sector process model and new management processes introduced for improved efficiency.

Preventing Knowledge Outflow:

  • ProRail, established in 2005, introduced matrix structure and restructured information flows.
  • Informal learning from British failures implemented as a formal process.
26
Q

Apple’s Music Evolution

  1. iPod Innovation
    (2001-2005)
  2. iTunes Music Store
    (2003-2006)
  3. Challenges and DRM System
  4. iPhone Impact
    (2007)
  5. iTunes Dominance
    (2010)
A

iPod Innovation (2001-2005):

  • Apple launched iPod offering significant storage.
  • Introduced variazioni like mini, nano, and shuffle for enhanced choice.

iTunes Music Store (2003-2006):

  • iTunes, initiated in 2003, reached one billion downloads by February 2006.
  • Steve Jobs convinced producers to join, marking a significant shift in digital music consumption.

Challenges and DRM System:

  • Apple’s DRM system prevented illegal sharing, but faced challenges from competitors like Napster and Motorola.

iPhone Impact (2007):

  • iPhone’s release marked Apple’s entry into the smartphone market.

iTunes Dominance (2010):

  • iPhone’s success propelled iTunes to become the world’s largest music retailer.

ETH: Introduction to Management (14 decks)

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