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Strategic Management > Strategies In Action > Flashcards

Strategies In Action Flashcards

1
Q

“Bonuses or merit pay for managers must be based to a greater extent on long-term objectives & strategies”

A

Arthur D. Little

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2
Q

Characteristics of Objectives

A

Quantitative, measurable, realistic, challenging, obtainable, understandable, hierarchical, congruent across departments

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3
Q

Benefits of Having Clear Objectives

A

synergy, direction, reduces conflicts, aids in allocation of resources, basis for evaluation, aids in job design, establishes priorities, reduces uncertainty, stimulates exertion

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4
Q

Financial Objectives

A

growth in ROI, growth in revenues, higher profit margin, higher stock price, higher EPS, higher dividends, growth in earnings, improved cash flow

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5
Q

Strategic Objectives

A

quicker on-time delivery than rivals, higher market share, lower costs, tech leadership, shorter design to market time, better product quality, wider geographical coverage, being ahead in new products than rivals

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6
Q

“If you think education is expensive, try ignorance.”

A

Derek Bok

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7
Q

Type of “not managing by objective”- “If it ain’t broke don’t fix it”

A

Managing by extrapolation

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8
Q

Type of “not managing by objectives”- true measure of a good strategist is ability to solve problems

A

Management by Crisis

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9
Q

Type of “not managing by objective”- Just do what you can to accomplish what you think should be done

A

Management by Subjectives

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10
Q

Type of “not managing by objective”- decisions predicated on hope that they will succeed; luck and good fortune

A

Management by Hope

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11
Q

strategic planning involves “choices that risk resources and tradeoffs that sacrifice opportunity”

A

Hansen and Smith

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12
Q

establishing websites to sell on

A

forward integration

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13
Q

franchising; food delivery/ own delivery system

A

forward integration

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14
Q

Starbucks buying own coffee farm

A

backward integration

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15
Q

negotiating with several outside suppliers

A

de-integration

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16
Q

“The trend toward horizontal distribution seems to reflect strategists’ misgivings about their ability to operate many unrelated businesses… direct competitors are more likely to create efficiencies than…between unrelated businesses… eliminating duplicate facilities and … more likely to understand the business of the target.”

A

Kenneth Davidson

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17
Q

GAP using same-sex couples in ads

A

market penetration

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18
Q

“Management found it couldn’t nanage the beast”; till today diversification is not so common

A

Michael Porter

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19
Q

“Companies are generally not very efficient diversifiers; investors usually can do a better job of that by purchasing stock in a variety of companies”

A

Barry Knap

20
Q

What makes diversification difficult?

A

Rapidly appearing new tech, new products, fast-shifting buyer preferences

21
Q

cost-cutting & asset reduction to reverse declining sales & profits; pruning product lines, laying people off; streamlining

A

retrenchment

22
Q

a corporation splits into 2 or more parts; Fiat Chrysler & Ferrari

A

divestiture

23
Q

Porter’s 5 Generic Strategies

A 
COST LEADERSHIP
Type 1- low-cost
Type 2- best-value
DIFFERENTIATION
Type 3- for those relatively price insensitive
FOCUS- small niche
Type 4- low-cost
Type 5- best-value
24
Q

Cost leadership must be generally pursued along with _________

A

differentiation

25
Q

When isit best to use cost leadership strategies?

A
  • market composed of price sensitive buyers
  • only few ways to achieve prod differentation
  • buyers are not brand picky/choosy
  • there are a large number of buyers w significant bargaining power
26
Q

Consequences of Cost Leadership

A

high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, rewards for cost containment

27
Q

Risks to Cost Leadership

A

competitors may imitate, tech nreakhroughs may make strategy ineffective, overall profits driven down, buyer interest swing to other differentiating features aside from price

28
Q

Benefit of Differentiation

A

can charge higher price & gain customer loyalty

29
Q

Risks to Differentiation

A

unique prod may not be as valued (thus go for cost leadership after), competitors may copy the innovation

30
Q

____________ and ______ firms can only effectively pursue focus strategies in conjunction with _______ or ________ strategies

A

Midsize and large; differentiation & cost leadership

31
Q

When are focus strategies most effective?

A

When consumers have distinctive preferences; when rival firms are not trying to specialize in same target segment

32
Q

“Within a decade, most companies will be members of teams that compete against each other.”

A

Kathryn Harrigan

33
Q

Why are joint ventures not always successful?

A
  • managers involved in daily ops are not involved in forming/shaping the venture
  • venture may benefit partner comps. but not the customers
  • venture may not be supported equally by both partners
  • venture may begin to compete more w one of the partners that the other
34
Q

Benefits of joint ventures

A

globalization of ops, improved comms and networking, minimization of risk

35
Q

“… Now the question is ‘Which joint ventures and cooperative arrangements are most appropriate for our needs and expectations?… “How do we manage these ventures most effectively?”

A

Kathryn Harrigan

36
Q

outsourcing, info sharing, joint marketing & R&D

A

Other methods of strategic partnering

37
Q

3 Reasons for the Trend towards Mergers/Acquisitions

A
  1. desire of diversified firms to spin off segments into sep companies then are acquired by other firms
  2. desire of firms to acquire similar comps in countries w lower tax rates
  3. desire of shareholders for firms to continually grow revs
38
Q

9 Reasons Why Many Mergers & Acquisitions Fail

A
  • integration difficulties
  • inadequate eval of target
  • large debt
  • inability to achieve synergy
  • too much diversification
  • managers overly focused on acquisitions
  • too large an acquisition
  • diff to integrate diff org cultures
  • reduced employee morale due to layoffs & relocations
39
Q

when a corporation’s shareholders are bought by the company’s mgt and other private investirs using borrowed funds

A

leveraged buyout

40
Q

11 Potential Benefits of Mergers & Acquisitions

A 
improved capacity utilization
decrease tax obligations
gain economies of scale
reduce managerial staff
make use if existing sales force
smooth out seasonal trends in sales
new tech
gain market share
enter global markets
gain pricing power
gain access to new distributors, suppliers, customers, prods, creditors
41
Q

PE to PE acquisitions

A

secondary buyouts

42
Q

when PEs borrow money to fund dividend payouts to themselves

A

dividend recapitalization

43
Q

3 Tactics to Facilitate Strategies

A

First mover advantages, outsourcing, reshoring

44
Q

moving some manufacturing back to country of origin (after outsourcing)

A

reshoring

45
Q

13 Potential Benefits of Outsourcing

A 
cost savings
reduce time to market
tax benefit
catalyst for change
focus on core business
cost restructuring- fixed costs move towards varcost; VC become more predictable
improved quality
knowledge
contract- financial penalties & legal redress when partner doesnt do job
access to talent
operational expertise
enhanced capacity for innovation
risk management

Strategic Management (6 decks)

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