STRAT. MAN. -MIDTERMS Flashcards
1
Q
focuses on external events that may influence the present position of a business.
A
Environmental Scanning
2
Q
is primarily concerned with the trends of events.
A
Environmental Monitoring
3
Q
gives preferential importance on information about competitors.
A
Competitive intelligence
4
Q
Strategic Management Tools:
A
- Physical
- Societal
- Industry
- Internal
5
Q
The ff. are the key elements of the Physical Environment:
A
- Physical Resources (ex: raw materials, arable land, and availability of fresh water)
- Climate (ex: temperature and weather-related events such as floods and storms)
- Wildlife
6
Q
to determine the possible strategic factors that can reduce the negative or unfavorable impacts of the expected changes on the physical environment of a company.
A
Objective of the Analysis (Physical Environment)
7
Q
aims to evaluate the impact of a company’s activities on the physical environment.
A
Objective of the Analysis (Physical Environment)
8
Q
The strategic approach that is used to analyze the physical environment is
A
environmental scanning
9
Q
Information or data needed in the analysis of physical environment are collected from
A
secondary sources
10
Q
An element that is rated a moderate or high impact on a company shall be considered
A
Key External Strategic Factor
11
Q
The ff. are the strategic factors of the societal or general environment:
A
- Political or Legal Segment
- Economic Segment
- Sociocultural Segment
- Technological Segment
12
Q
to determine the trends of the strategic factors that are relevant to the growth of an industry.
A
Objective of the Analysis (Societal Environment)
13
Q
businesses tend to join a growing and promising industry where the strategic factors considerably contribute to its moderate or high growth.
A
Objective of the Analysis (Societal Environment)
14
Q
to gather, evaluate, and disseminate reliable and relevant information about the societal environment, the approach used is
A
environmental scanning
15
Q
the specific strategic tool used to scan the societal environment is the
A
PESTEL or STEEP analysis
16
Q
The data used in the analysis of societal environment come from
A
secondary sources
17
Q
is not a mere identification and listing of variables, which are commonly done, under a particular segment or strategic factor.
A
PESTEL or STEEP Analysis
18
Q
this procedure alone will not provide meaning info. to a management in making a strategic decision. Rather, it involves a deeper analysis of the collected data.
A
PESTEL or STEEP Analysis
19
Q
is the immediate environment surrounding a business.
A
The Industry or Task Environment
20
Q
The strategic factors of the industry environment are as follows:
A
- Customers
- Suppliers
- Creditors
- Employees
- The Government
- Competitors
21
Q
to determine the different forces that drive competition and the extent of the competition so a company can position itself in an industry.
A
Objective of the Analysis (Industry Environment)
22
Q
the analysis of the industry environment requires the use of the 3 methods of collecting data for strategic analyses.
A
scan, monitor, and conduct competitive intelligence
23
Q
Data used in the analysis of industry environment come mainly from
A
secondary sources
24
Q
the commonly used tool to analyze the industry environment.
A
Porter’s Five Forces of Competition Model
25
evaluates the level of competition and assesses the attractiveness of an industry itself.
Porter’s Five Forces of Competition Model
26
Porter’s Five Forces:
1. Rivalry among Competing Companies
2. Threats of New Entrants
3. Bargaining Power of Buyers
4. Threats of Substitute Products
5. Bargaining Power of Suppliers
27
to determine how culture influences strategy formulation.
Corporate Culture
28
To determine what structure can effectively and efficiently achieve organizational goals.
Organizational Structure
29
To determine which business resource contributes to the achievement of competitive advantage.
Business Resources
30
is influenced by the type of strategic factor being analyzed and the strategic tool used in the analysis.
Objective of the Analysis (Internal Environment)
31
evaluates the internal strengths and weaknesses of a company against what the external opportunities and threats offer.
SWOT Analysis Model
32
a tool to analyze the external environment because of the external factors.
SWOT Analysis Model
33
to assess a company’s strengths and weaknesses so that opportunities are exploited and threats are avoided or minimized.
Objective of the SWOT Analysis
34
stands for (value, rareness, imitability, and organization)
is a strategic management tool that assesses the resources of a company to achieve competitive advantage.
VRIO Framework
35
if it can add value for the customer and if it provides the company the capability to exploit opportunities or defend against threats.
Valuable
36
only a few company possess it.
Rare
37
if it can hardly be imitated or is costly to imitate.
Imitability
38
when the activities of different functional units, systems, processes, and structures are coordinated, planned, and arranged properly
Organized
39
is to identify a company’s resource that is considered valuable, rare, and difficult to imitate and to assess if the company is organized to use it to sustain a competitive advantage.
Objective of the VRIO Framework
40
- developed by Michael Porter
- is a strategic management tool that evaluates the internal activities of a company when producing goods or delivering services.
Value Chain Analysis Model
41
this model group business activities into primary and support activities.
Value Chain Analysis Model
42
Inbound logistics, Operations, Outbound logistics, Marketing, and Service.
Primary Activities
43
Company infrastructure, Human resource management, Technology development, and Procurement.
Support Activities
44
is to asses which of a company’s activities create value and which create cost in order for the company to improve its profit margin and achieve competitive advantage.
Objective of the Value Chain Analysis
45
to determine which activities, create value and which create cost so that the profit margin is improved and competitive advantage is achieved.
Objective of the Value Chain Analysis
46
represents the benefits that are derived from a product or service.
Value
47
can be attained by adopting an efficient manufacturing process.
Creating Value
48
the focus of the analysis is on the activities that create cost to the company and how they can be reduced.
Cost Advantage
49
the focus of the analysis is on the activities that create value for the customers and how they can be improved.
Differentiation Advantage
50
- developed by Bruce Herderson of the Boston Consulting Group (BCG) in 1970.
- is a strategic management model that assesses a company’s business units or products in terms of market share and market growth.
BCG Growth-Share Matrix
51
acts as a proxy for competitive advantage.
Market Share
52
serves as the proxy for industry attractiveness.
Market Growth
53
is to classify a business unit or product portfolio in an industry in terms of market share and growth rate relative to the largest competitor.
Objective of the Analysis (BCG Growth-Share Matrix)
54
to determine the status of a company’s unit of product portfolio in terms of market share and growth.
Objective of the Tool (BCG Growth-Share Matrix)
55
is to classify a business unit or product portfolio in an industry in terms of market share and growth rate relative to the largest competitor.
Objective of the Tool (BCG Growth-Share Matrix)
56
These are products that have high market shares and growth rates in high-
growth industries. They are cash generators and cash users.
STARS
57
these are products that have low market shares but consume large amounts of cash.
QUESTION MARKS
58
these are leaders in the mature market that generate steady cash flow but utilize small amounts only. Excess cash are flowed to question marks.
CASH COWS
59
these are products that have low market shares and growth rates. They generally consume large amounts of cash.
DOGS
60
the term "strategy" comes from the Greek word "strategia" which refers to the art of a troop leader or a general.
Strategy
61
in the context of strategic management, this text defines strategy as a plan formulated after an extensive critical analysis of a company’s resources which is then implemented in order for a company to achieve its mission and objectives effectively.
Strategy
62
defines as the analysis, decision, and action that enables a company to succeed.
Strategy (Dess et al. (2012)
63
define it as the comprehensive plan that states how a company will achieve its mission and objectives.
Strategy (Wheelen and Hunger (2010)
64
which represent the category of companies based on their common strategic orientation and combination of structure, culture, and processes.
Strategic Types (Wheelen and Hunger (2010)
65
these are businesses with few product lines, and they intend to defend them from new products entering the market. Their foremost concern is how to improve their operating activities in terms of cost reduction. Being cost- and efficiency oriented, they are unlikely to make bolder steps to innovate and move to new areas.
Defenders
66
these are companies with broad lines of products, product development, innovation, and a new market are the essence of their strategy orientation. Creativity for them is more important than efficiency in operations.
Prospectors
67
these are multidivisional companies that compete in at least two types of industries, one stable and one variable, while maintaining stability and flexibility.
Analyzers
68
these are businesses that do not have firm or consistent strategic orientations. They adopt piecemeal or quick response strategies which are oftentimes ineffective to meet the pressures, changes, and challenges of the environment.
Reactors
69
- the first stage of strategic management process
- the process of developing a comprehensive plan to effectively manage the external environmental strategic forces relative to a company’s strength and weaknesses.
Strategy Formulation
70
- occurs after a thorough and critical analysis of the environment is conducted.
Strategy Formulation
71
usually formulated by the top-level management, it is a comprehensive master plan that describes the overall direction of a company.
Corporate Strategy
72
occurs at the business or product unit and describes how a company improves its competitive position in a specific industry.
Business Strategy
73
a plan taken by functional areas that is intended to maximize the productivity of a resource to achieve competitive advantage.
Functional Strategy
74
is conducted by the top-level management, with inputs from the middle- and lower-level managements and other stakeholders in the form of quantitative or qualitative information.
Corporate Strategy
75
it is concerned with the overall direction of a company and is considered the general or grand strategy of the company.
Corporate Strategy
76
a corporate strategy that a company may adopt if it aims to expand its present operating activities. In short, the company intends to grow.
Growth Strategy
77
occurs when a company expands its operation domestically or globally.
Internal Growth
78
happens when a company enters into mergers, acquisition, or strategic alliances.
External Growth
79
appropriate to adopt when a company can reasonably determine that its current product lines have real growth potentials.
Concentration Strategy
80
a business expands its operations by entering into other geographic locations and by increasing the range of product lines for the current market.
Horizontal Growth Strategy
81
a company ships goods to other foreign countries.
Exporting
82
a company enters into an agreement with another company from another country to produce or sell the product/s of the former.
Licensing
83
a company enters into an agreement with a franchiser to use the name and system of the latter.
Franchising
84
a company combines its resources with other companies from foreign countries to produce new products.
Joint Venture
85
a company purchases a foreign company.
Acquisition
86
a company constructs its own plant and invests with other assets in a foreign country.
Green-Field Development
87
a company constructs operating facilities and transfers the same to the host country when completed.
Turnkey Operations
88
a company constructs facilities, operates them when completed, and turns them over to the host country.
BOT (build, operate, transfer) scheme
89
a company takes over the functions of a supplier and a distributor.
Vertical Growth Strategy
90
a company takes 100% control of the value chain.
Full Integration
91
a company acquires not more than 50% of its requirements from outsiders.
Taper Integration (backward integration)
92
a company purchases most of its requirements from outsiders.
Quasi-Integration (forward integration)
93
a company enters into an agreement with other companies to provide goods to each other over a specified period of time.
Long-term Contracts
94
appropriate growth strategy when the original industry appears to have matured, plateaued, and consolidated already.
Diversification Strategy
95
is more appropriate in a less attractive industry and for a company with a strong competitive position. In this case, a company has a greater chance to succeed by utilizing its core competency in exploiting a related industry.
Concentric Diversification Strategy
96
a company may consider this strategy as its growth strategy when its present industry is no longer attractive and it lacks the required abilities to transfer resources to related products or services.
Conglomerate Diversification Strategy
97
a company plans to continue its current activities without substantial change in its direction.
Stability Strategy
98
it is effective for short-term planning but may be detrimental if used for long-term planning.
Stability Strategy
99
a company takes a temporary timeout from its major activities while observing changes in its external environment. It is a temporary strategy. This is the strategy adopted by most companies when there is a financial crackdown and a pessimistic economic outlook.
Pause or Proceed With-Caution Strategy
100
does not imply that a company will shut down its operations. It only temporarily stops major critical activities before shifting to the growth or retrenchment strategy.
Pause or Proceed With-Caution Strategy
101
indicates that the company, which has a dominant position in the market, will not take anything new; rather, it will continue implementing its current activities in the near future.
No-Change Strategy
102
is effective when an industry is relatively stable with little expected growth, and consolidation is not expected to occur in the foreseeable future.
No-Change Strategy
103
is a temporary plan to a company in its desire to increase is profits when revenues are declining.
Profit Strategy
104
it is a cost-cutting mechanism to address a decline in profit because of a decrease in sales.
Profit Strategy
105
this is the strategy to be adopted when a company experiences poor competitive position and operating performance and competitive disadvantage.
Retrenchment Strategy
106
is adopted when a company is not yet critically bleeding financially.
Turnaround Strategy
107
a company intends to improve its operational efficiency by adopting drastic actions for a leaner organization. In contraction, being the initial stage of this strategy, there is an overall cost reduction in the entire company. In the consolidation stage, resources are consolidated, programs are developed, and the remaining best and qualified personnel are motivated to establish a new look and a strong company that can achieve competitive advantage in an industry.
Turnaround Strategy
108
is adopted by a company that has a weak competitive position in an industry and does not have the capability to implement a complete turnaround strategy.
Captive Company Strategy
109
in this strategy, a weak company becomes the captive of a strong company, which is usually its customers, in order to have continued existence.
Captive Company Strategy
110
adopted when a company has a weak competitive position in an industry and is not able to look for a strong partner to whom its business unit can be a captive.
Sell-Out or Divestment Strategy
111
is a favorable option when a company is able to look for a good price for the company.
Sell-Out or Divestment Strategy
112
implies that a business is selling the entire company, including all the business units and divisions.
sell-out
113
occurs when a company only sells its division or business unit that does not operate profitably.
divestment
114
is adopted when a company that is suffering heavy losses terminates its operations.
Bankruptcy or Liquidation Strategy
115
this is usually the last strategy that a company adopts when it has a very weak competitive position in an industry and nobody is willing to buy the company.
Bankruptcy or Liquidation Strategy
116
a company gives up its management to a court and settles some financial obligations in return.
bankruptcy
117
involves the conversion of non-cash assets to cash through selling to settle financial obligations.
liquidation
118
it is intended for the gathering of reliable and relevant information as basis when making a sound forecast about an industry (e.g., expected trends, growth, and competitive forces and the capability of a company to exploit its resources for competitive advantage.
Conduct a critical environmental analysis
119
a company can choose to adopt the growth, stability, or retrenchment strategy. When deciding on the future overall direction of a company, the industry, particularly its growth and life cycle, customer behavior and preferences, societal factors, and internal environment factors, should be highly considered.
Set the overall orientation of the company
120
a company cannot serve all types of customers with different tastes, preferences, and priorities. This way, a company will be able to focus its efforts and activities toward its ultimate direction.
Identify the industry or market to compete in
121
the last stage of corporate strategy formulation involves a business being able to define how its different functional units create synergy as it transfers resources from one unit to another.
Define how the company transfers resources to its business or functional units
