Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Strategic Management > Strategic Management > Flashcards

Strategic Management Flashcards

1
Q

Definition of Competitive Advantage:

A

Superior performance relative to competitors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Definition of Sustainable competitive advantage:

A

Occurs when a company implements a value-creating strategy of which other companies are unable to duplicate the benefits or find it too costly to imitate.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Definition of Strategy:

A

The quest to create, capture and sustain competitive advantage.
It is not a zero-sum game. It requires trade-offs for strategic positioning.

Grant: Finding the best fit between the firm (goals, value, resources & capabilities, structure & systems) and its environment (competitors, customers, suppliers, technologies, products, PESTEL) => Mix between Porterian approach and Resource-based view.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Roles of strategy (DTC):

A
  1. Decision support: Improves the quality of decision making
  2. Target: improves performance by setting high aspirations
  3. Coordination and communication: create consistency and unity
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Successful Strategy (OUR):

A
  1. Long-term, simple and agreed objectives
  2. Profound understanding of the competitive environment
  3. Objective appraisal of resources
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Goals of Strategy:

A 
-	Profitability (net profits) => Source of superior profitability are:
o	Industry attractiveness
o	Competitive advantage
-	Efficiency (low costs)
-	Market share
-	Growth
-	Shareholder wealth
-	Utilization of resources
-	Contribution to stakeholders
-	Survival
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Levels of Strategy:

A
  1. Corporate strategy: Where to compete? Decisions making by top executives.
  2. Business strategy: How to compete? Strategic choice of generic strategy (cost leadership, differentiation, focus). For multiple-business companies.
  3. Functional strategy: How to implement? Improvement of the effectiveness of functional operations within a company.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Strategic Management process (ACI):

A
  1. Strategic Analysis
  2. Strategic Choice
  3. Strategic Implementation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Value chain:

A

Set of interrelated organizational activities and relationships that are necessary to create a product or a service.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Drivers of value creation:

A
  • Increase price premium: service, quality, delivery, technology, etc.
  • Reduce cost: economies of scale, scope, learning curve, etc.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Creating value from the perspective of stakeholders:

A

distribution of value reflects the balance of power between stakeholders.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Company performance (NIC):

A
  • National context
  • Industry context
  • Company capabilities and strategies
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Objective of industry analysis:

A
  1. Assess industry attractiveness
  2. Understand how industry structure affects competition which determines the level of industry profitability
  3. Use evidence on changes in industry structure to forecast future profitability
  4. Identify opportunities to change industry structure to increase industry profitability
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Industry Attractiveness factors:

A
  • Growth
  • Profitability
  • Size
  • Technological intensity
  • Environmental friendliness
  • Capital intensiveness
  • Countercyclical
  • Cash flow patterns
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Industry structure & profitability:

A
  • Concentration
  • Entry and exit barriers
  • Product differentiation
  • Information
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Segmentation analysis 5 stages:

A
  1. Identify key variables and categories
  2. Construct a segmentation matrix
  3. Analyze segment attractiveness
  4. Identify KSF in each segment
  5. Analyze benefits of broad vs narrow scope
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Basis for segmentation (buyers & product as opportunities for differentiation):

A
  • Characteristics of the buyers (industrial buyers, household, distribution channel, geographical location)
  • Characteristics of the product (physical size, price level, pro
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Identification of KSF:

A
  • What do customers want (external - analysis of demand): who & what
  • How does the firm survive competition (internal - Analysis of competition): intensity, what drives competition, how to get superior CA?
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Threat of new entrants:

A
  • Where do they come from: startups or diversification
  • Attraction and deterrence factors:
  • Entry barrierseco of scale, experience, capital, distribution channels, proprietary technologies, rules and regulation.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Threat of substitutes:

A
  • Alternative from outside the given industry
  • Sources: technological innovation & demand and habit changes
  • Depends on: product obsolescence rate, buyer’s propensity to change
21
Q

Rivalry depends on:

A
  • Concentration
  • Growth rate
  • Product differentiation
  • Number and size of competitors
  • Excess capacity and exit barriers
  • Cost conditions: scale economies and fixed/variable costs
  • Degree of commitment of competitors
22
Q

Strategic group analysis:

A
  • Definition: group of firms in an industry following the same or similar strategy
  • Mobility barriers dimensions: specialization, brand identification, technological leadership, product quality, cost position, vertical int.
  • Usage (FAU): understand, anticipate, formulate
23
Q

Multiple regression analysis:

A
  • Definition: evaluate the degrees to which deviations of the dependent variable from its mean are explained by or associated with variations in each of a set of independent or explanatory variables (concentration, barriers to entry, demand, etc).
  • Problems: mis-specification problems, measurement problems, identification problems
24
Q

KSF in industry lifecycle:

A
  1. Introduction: product innovation, credible image of firm and product
  2. Growth: Design for manufacture, access to distribution, brand building, fast product development, process innovation
  3. Maturity: Cost efficiency through capital intensity, scale efficiency and low input cost
  4. Decline: Low overheads, buyer selection, signalling commitment, rationalizing capacity
25
Q

Scenario Building method:

A

Generate variables (using PEST), select most impactful variables, generate mini scenarios, combine mini scenarios, write scenarios.

26
Q

Strategies when uncertainty:

A
  1. Bet big on desired scenario
  2. Make robust decisions (OK in all scenarios)
  3. Bet a little on all possible scenarios, wait and see and revise => strategic options
27
Q

Resource-based view (RBV)

A

Resources and capabilities are the primary sources of profitability
Two critical assumptions:
- Resource heterogeneity: bundles of resources and capabilities differ across firms
- Resource mobility: resources tend to be sticky and do not move easily

28
Q

RBV => VRIO

A
  • Valuable => Competitive disadvantage
  • Rare => Competitive Parity
  • Costly to imitate => Temporary competitive advantage
  • Organized to capture value => Temporary competitive advantage
  • => Sustained competitived advantage
29
Q

Importance and strength of resources and capabilities:

A
  • CA established: scarcity, relevance
  • CA sustained: durability, transferability, replicability
  • Appropriability: proprietary rights, relative bargaining power, embeddedness
30
Q

Framework for appraising resources and capabilities

A

Relative strength & Strategic importance

31
Q

Limitations of RBV

A
  • Underestimates:
    o Value and role fo opportunity in any development process
    o Learning is triggered and enhanced by need
    o Role of competitors and the impact of their strategic choices
  • Biased against unrelated diversifications, encourages related diversification drift
  • Overestimates the transferability of resources and capabilities within the firm
32
Q

Protection of competitive advantage:

A
  • Identification: obscure superior performance
  • Incentives for imitation: deterrence, pre-emption (exploit all available investment opportunities
  • Diagnosis: rely upon multiple sources of CA to create ambiguity and complexity
  • Resource acquisition: base competitive advantage upon resources and capabilities that are immobile and difficult to replicate
33
Q

Measurement of competitive advantage:

A
  • economic value, accounting profit or shareholder value
34
Q

Balanced-scorecard approach:

A

Help manager achieve their strategic objectives more effectively
Harnesses multiple internal and external performance metrics in order to balance both financial and strategic goals
- How should shareholders view us?
- What core competencies do we need?
- How should we create value?
- How should customers view us?

35
Q

Balanced-scorecard advantages and disadvantages:

A
  • Advantages: communicate vision, design business processes, implement organizational learning.
  • Disadvantages: tool for implementation not formulation, limited guidance on selecting metrics, limited insight on how to get back on track to meet goals (just tracking tool for metrics)
36
Q

Multidemensionality of performance:

A
  • Accounting returns
  • Growth
  • Stock market
37
Q

Generic strategies by Michael Porter:

A
  • Strategic position: Differentiation Cost leadership

- Competitive scope: Narrow Broad = focused or not strategic position

38
Q

Limit of learning curve:

A
  • Copying and reverse engineering of products
  • Hiring a competitor’s employees
  • Purchasing the know-how from consultants
  • Obtaning the know-how from customers
  • Experience advantages are often nullified by product obsolesces and innovations
39
Q

Base of differentiation:

A

focus of competition is on non-price attributes (product features, customer service, customization, and complements

  • Tangible differentiation
  • Intangible differentiation
40
Q

Corporate strategy:

A

The way a company creates value through the configuration and coordination of its multi-market activites.

41
Q

Business strategy:

A

Integrated and coordinated set of commitments and actions designed to provide value to customers and gain a competitive advantage by utilizing core competencies in specific individual product markets.

42
Q

Portfolio planning models:

A
  • Allocating resources
  • Formulating business-unit strategy (build, old or harvest)
  • Setting performance targets (cashflow, ROI)
  • Portfolio balance
43
Q

Portfolio planning advantages and disadvantages

A
  • Advantages: simplicity, big picture, analytical versatile, can be augmented
  • Disadvantages: simplicity, ambiguous, ignores synergy
44
Q

Three dimension of corporate strategy:

A
  • Vertical integration: risks (increasing costs, reducing quality & flexibility, increasing potential for legal repercussions) & alternative (tapered integration, strategic outsourcing)
  • Horizontal integration
  • Geographic scope
45
Q

Diversification create shareholder value it should meet three tests:

A
  • Attractiveness test
  • Cost of entry test
  • Better-off test
46
Q

Globalization:

A

process of closer integration and exchange between different countries and peoples worldwide

47
Q

The integration-responsiveness framework:

A

Low to high pressure for:

  • Local responsiveness
  • Cost reductions
48
Q

Porter’s diamond model:

A
  • Competitive intensity in focal industry
  • Demand conditions
  • Related and supporting industris/complementors
  • Factor conditions
49
Q

Four global strategies:

A
  • International strategy
  • Localization (product differentiation) strategy
  • Global standardization (cost leadership) strategy
  • Transnational strategy

Strategic Management (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions