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Strategic Management > Strategic Management > Flashcards

Strategic Management Flashcards

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1
Q

A strategy is a ______________ which positions the firm to _______________________

A

A strategy is an integrated set of choices which positions the firm to create a sustainable economic advantage

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2
Q

Strategy relies on (3)

A

Simple agreed goals
Appraisal of resources
Understanding competition

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3
Q

Types of strategy:
Corporate strategy: _____ to compete
Business strategy: ___ to compete
Functional:

A

Corporate strategy: Where to compete
Business strategy: How to compete
Functional: Technical steps to implement

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4
Q

I/O analysis: Definition and assumption

A

Industrial organisational economics assumes that outer environment dictates the actions of firms.

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5
Q

Structures incompatible with I/O (4)

A

Monopoly
Oligopoly
Perfect competition
Monopolistic competition

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6
Q

Assumptions of the I/O model (4)

A

All firms have similar capabilities
Resources are mobile
All firms act to maximise profit
Restrictions in the external environment

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7
Q

RBV: Definition and assumption

A

Resource based view says that the source of competitive advantage is the resources that a firm has.

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8
Q

Assumptions of RBV model (3)

A

Resources aren’t mobile
Resources are inhomogenous
Resources change over time

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9
Q

Definition: an industry is a __________ whose products/services

A

Definition: an industry is a collection of firms whose products/services are perfect/near perfect substitutes

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10
Q

Uses of I/O analysis: (2)

A

Helps to identify competitors

Helps to identify success indicators

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11
Q

Define and give example: Monopoly

A

One firm dominates the entire industry (DeBeers, Microsoft)

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12
Q

Define and give example: Oligopoly

A

A collection of firms dominate the industry (Wifi or mobile phone networks)

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13
Q

Define and give example: Perfect competition

A

Many small firms which offer near identical goods (commodity markets)

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14
Q

Define and give example: Monopolistic competition

A

Collection of small firms who have a different product, with consumers aware of the non-monetary benefits (hairdressers)

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15
Q

Porter’s Five forces (5)

A 
Threat of new entrants
Power of buyers
Power of suppliers
Threat of substitutes
Rivalry
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16
Q

Sources: threat of new entrants (9)

A 
Capital requirements
Technological requirements
Government legislation
Economies of Scale
Threat of retaliation
Established connections
Ease of switching
Product differentiation
Learning Curve cost effect
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17
Q

Threat of substitutes (4)

A

[ ] of substitutes and level of differentiation
Quality of product
Price of product
Ease of switching

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18
Q

Power of buyers (5)

A 
[ ] of buyers
Buyer information
Backwards integration threat
Lack of differentiation
Intensity of competition
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19
Q

Power of suppliers (5)

A 
[ ] of suppliers
Necessity of the product in the supply chain
Ease of switching
Forwards integration
Availability of substitutes
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20
Q

Degree of rivalry ((1x5),(1x5))

A

Intensity of competition: [ ] of competitors, growth in the industry, fixed costs, level of differentiation and more firms supplying
Exit barriers: specialised assets, fixed exit costs, strategic or emotional relationships, government legislation

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21
Q

Define:
Resource
Capability
Core competency

A

What a firm has
What a firm does: The firm’s capacity or ability to integrate firm resources to achieve a required goal
Actions a firm does particularly well to create a sustainable economic advantage

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22
Q

Types of resources (2)

A

Tangible and intangibles

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23
Q

Categories of tangible resources (4) and how to identify

A

Financial
Physical
Technological
Organisational

Can see their value on the balance sheets, check websites etc

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24
Q

Categories of intangible resources (4) and how to identify

A

Human
Reputation
Innovation
IP

Goodwill after M&A or as Kaplin of Harvard business school states, how closely aligned to the firm’s strategy are they

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25
Q

Types of capabilities (2)

A

Visual (what we can see and measure) invisible (what is not immediately obvious). Analogous to assets/resources

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26
Q

Core competencies are activities that are _______ and combine _________ and ___________.

A

Core competencies are activities that are strategically valuable and combine process innovation and production ability

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27
Q

How do we analyse resources and capabilities

A

VRIO framework is used

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28
Q

V in VRIO

A

Valuable- Perceived value is higher than the actual value in the eyes of a customer (eg Apple products)

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29
Q

R in VRIO

A

Rare-Few or a single firm posses the ability to produce this or implement this (Ni superalloys)

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30
Q

I in VRIO

A

Imitability- can this be copied at a reasonable cost (could you challenge Coca Cola on their budget?)

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31
Q

O in VRIO

A

Organised to capture value- can the company align everything they have to create value to the product/service

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32
Q

VRIO checklist

A 
Nothing = Competitive disadvantage
Just V= Competitive parity
V&R=Temporary competitive advantage
VR&I = Unused competitive advantage 
VRIO = Sustainable competitive advantage
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33
Q

Value chain: definition

A

The value chain describes all values that a firm engages in to add incremental value to their product/service

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34
Q

Primary activities in Porter’s value chain (IOOMS)

A

Inbound logistics, operations, outbound logistics, marketing and sales and services

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35
Q

Primary: Inbound logistics

A

Arranging inbound movement of materials and other inputs

36
Q

Primary: operations

A

Activities required to convert inputs to outputs

37
Q

Primary: outbound logistics

A

Activities required to collect, store and distribute products

38
Q

Primary: marketing and sales

A

Retail and advertisement

39
Q

Primary: services

A

Actions required after launch to keep the product or service working effectively

40
Q

Secondary activities in Porter’s value chain;

A

Firm infrastructure, human resources, technological development and procurement

41
Q

Business level strategies (Porter’s generic) (4)

A

Differentiation
Cost leadership
Focused differentiation
Focused Cost leadership

42
Q

Definition: Cost leadership

A

Same value in terms of the product, but at a lower cost

43
Q

Aims of cost leadership (4)

A

Offer better customer value
Target average customers using little differentiation
Streamline manufacturing and materials management
High volume low margin

44
Q

Drivers of cost leadership (3)

A

Lower cost inputs
Economies of scale
Learning curves

45
Q

Requirements and indicators of cost leadership (9)

A 
Cost control
Labour control
Scaling
Automation
Incentives 
Control reports
Cheaper inputs
Low cost distribution
Organisation
46
Q

Definition: Differentiation

A

Higher value for the customers relative to the competitors. Features are unique but priced at a similar level

47
Q

Aims: Differentiation (2)

A

Varied products and unique features

Low volume, high margin

48
Q

Drivers of differentiation (3)

A

Strong branding
Good market research
Differed product

49
Q

Indicators and requirements of differentiation (8)

A 
Creative flair
Incentive for skilled workers
Strong branding
Strong engineering
Quality led
Well coordinated work force
50
Q

Strategy focusing occurs when firms have _________ which serves the ___________

A

Strategy focusing occurs when firms have intimate knowledge of a market segment which serves the need of a particular corner of the market

51
Q

Benefit to focusing

A

Some core competencies are best serving a niche corner of the market

52
Q

Successfully implementing a mixed strategy

A

usually you could get caught in the middle. Can circumvent this by having subsidiary businesses within a firm which cater to particular needs.

53
Q

Definition: the value chain

A

The value chain describes all values that a firm engages in to add incremental value to their product/service

54
Q

Benefits of the value chain (3)

A

Identify a firm’s position in value chain
Identify the activity which creates value
identify the resources a firm has that create the value

55
Q

4 stages in industry life cycle and shape of curve

A

Introduction
Growth
Maturity (stationary point)
Decline

56
Q

Factors which engender a new industry (2)

A

Sharing of knowledge

Demand growth

57
Q

Effect of knowledge on innovation

A

Process innovation requires diffusion (hence curve looks like it has activation barrier).

58
Q

Dominant design process (5)

A 
Pioneers in R&D
1st prototype gets industry attention
First commercial 
Front runner 
Dominant design
59
Q

Dominant design and the industry cycle

A 
Introduction = Product is innovated
Growth = Design & manufacture of the good
Maturity = Shakeout, cost cutting, differentiation and commoditisation
Decline = Cost cutting and strategic issuees
60
Q

Exceptions to industry cycle (3)

A

Food industry (no decline if necessity)
Pharma/ICT (multiple versions)
TV (room for improvement

61
Q

Sources of corporate inertia (4)

A

Sticking to core competencies
Imitation (copy each other to gain legitimacy, seen in banks), known as institutional isomorphism
Limited search: accepting temporary solutions
Complementary strategy: interdependent activity in a firm

62
Q

Signs of mature industries (3)

A

Slowing of innovation
Low technological change
Market saturation

63
Q

Cost optimisation of mature industries (4)

A

Economies of scale
Low cost inputs
Lower overheads
Outsource]

64
Q

Definition: Strategic innovation

A

Strategic innovation is a revamp of corporate strategy

65
Q

Examples of strategic innovation (4)

A

Dramatic redefinition of the customer base
Dramatic redefinition of the concept of customer value
Dramatic redesign of end to end value chain architecture
Bundle experience

66
Q

Organisational ambidexterity vs Dual strategy

A

Organisational ambidexterity is the act of doing both strategy for now that exploits existing resources and capabilities, and future planning by having a strategy for tomorrow, SIMULTANEOUSLY. Dual strategy is doing one at a time.

67
Q

Dynamic capabilities

A

Firms that readjust to address rapidly changing industries

68
Q

Types of dynamic capability (3)

A

Sensing of threats and opportunities
Seizing of opportunities
Maintain competitiveness whilst overhauling assets

69
Q

Declining industries: indicators and solutions (4)

A

Leadership: establish a dominant position. Encourage exit of rivals by commiting
Niche: focus strategy
Harvest: maximise cash flow
Divest: Get out and sell

70
Q

Innovation:

A

Commercialisation of an invention

71
Q

Invention

A

Creation of products my development of new knowledge

72
Q

Idea adopters (5)

A 
Innovators
Early adopters
Early majority
Late majority
Laggards
73
Q

Level of profits extracted from an invention (2)

A

How much value does the invention have to customers

How well can it be appropriated

74
Q

Appropriation of ideas

A

Legal IP
Complementary resources
Imitability
Lead time

75
Q

What is the chasm and how is it surpassed?

A

It is the gap between the early adopters and early majority. There needs to be a need for the good

76
Q

Benefits and drawbacks of first movers

A

Monopoly on the gain of a new product, but have to forge their own path (costly) and also high uncertainty.

77
Q

Benefits of follower (3)

A

Can learn from first mover and exploit potential, and have more time to fine tune

78
Q

Definition: strategic window

A

A period in time when the firms resources and capabilities are aligned with the market. Larger firms have a longer window, smaller firms have higher pressure to get the product to market quickly

79
Q

Definition: emergence of standards

A

A standard is a format that allows inter-operability.

80
Q

How do standards emerge (2)

A

This can arise from a public or private fund, and are linked to the dominant design.

81
Q

Definition: technical standards

A

These emerge for network externalities, where my experience depends on your participation

82
Q

Establishing as the standard (3)

A

Establish allies
Pre-empt the market
Manage expectations

83
Q

How do you stimulate innovation? (5)

A

Cross functional product development
Buying innovation
Open innovation
Corporate incubators

84
Q

Definition: CSR

A

Coroporate social responsibility

85
Q

Example of CSR

A

B-Corp. Private non profit which ranks the behaviour of firms on economics and social issues, so they can brand it.

Strategic Management (1 decks)

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