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MGT8803 > Strategy > Flashcards

Strategy Flashcards

1
Q

What is SMART in goal setting?

A

Specific
Measurable
Achievable
Relevant
Time frame is clear

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2
Q

What are the tenets of good business strategy?

A

-Diagnose the competitive challenge
-Create guiding policy on how to address
-Set of coherent actions to implement policy

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3
Q

What is and what are the elements of management’s vision?

A

-what org will look like
-business model
-tech architecture
-workforce
-strategic planning

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4
Q

What is the mission statement elements?

A

What does the org do?
How is it organized?
Commitments to key stakeholders
Core values
Must be real, not hype

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5
Q

What are the two focuses mission statements can have?

A

Product focus
Customer market focus

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6
Q

What are core values?

A

Guiding principles of the firm that is specific to company

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7
Q

What are the three components of business model?

A

Value delivery
Value creation
Value capture

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8
Q

What are common revenue models?

A

Retail
Rental/lease
Ads and sponsors
Affiliate marketing
Brokerage
Usage
Licensing
Transaction
Subscription membership
Data driven
E-commerce

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9
Q

What are the components of value delivery in business models?

A

Products
Sales and distribution
Markets

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10
Q

What are the value creation elements of of business model?

A

Core competencies
Capabilities
Activities
Partners
Resources

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11
Q

What are the value capture elements of business model?

A

Expenses
Revenues

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12
Q

What are the three steps of traditional top down planning?

A

Analysis
Formulation
Implementation

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13
Q

What are the limitations of top down planning?

A

Assumes future will be like past
Based on centralized authority and senior management’s decision making

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14
Q

What is a pitfall of the top-down approach?

A

Underestimates uncertainty

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15
Q

What is residual uncertainty?

A

Unknowable unknowns in top-down planning

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16
Q

What are the levels of uncertainty?

A
  1. Clear future
  2. Alternative futures hinging on a key event
  3. A range of futures
  4. True ambiguity
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17
Q

What is a non-traditional type of strategic planning and how does it differ and when does it work?

A

Scenario-based
Considers alternatives based on different futures
Applicable to levels 2-3 rather than 1-2

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18
Q

What is a third option of strategic planning?

A

Strategy as planned emergence
Strategy can emerge from anywhere in an org based on discretionary budgets

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19
Q

What kinds of scope are there and what are it’s components? Where is it an issue?

A

Key strategic issue at corporate level
Broad or narrow
Product
Market
Geography

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20
Q

How can scope be changed?

A

Vertical integration
Horizontal integration
Diversification
Divesture

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21
Q

What are strategic issues at corporate level?

A

Capital allocation
Firm organization and shared services
Establishing business unit goals

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22
Q

What is competitive advantage?

A

Factors that allow a company to produce goods or services better or more cheaply than its rivals

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23
Q

What are the sources of competitive advantage?

A

Cost
convenience
Distinctiveness/uniqueness

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24
Q

What is strategic positioning?

A

Unique position in the industry that allows firms to provide value while controlling costs

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25
Explain porters genetic strategies
Scope: narrow or broad Source of competitive adv: cost or diff Cost leadership Cost focus Diffentiation Differentiation focus
26
Where do companies not want to be in porter’s generic strategies?
I’m the middle
27
What is the business model?
Company’s plan for making a profit
28
Porter: what is the essence of strategy?
Choosing what not to do
29
Porter: what is strategy about?
Making choices and deliberately choosing to be different
30
What elements make up the external environemnt?
General environment Industry Market Firm
31
What are the elements of PESTEL analysis?
Political Economic Socio-cultural Technological Ecological Legal/ethical
32
Explain the PESTEL prioritization matrix
X = impact Y = probability of occurance Formulate strategy for Med-high impact and prob of occur
33
What is the SCP model and what do each mean?
Structure -industry and firm structure: # rivals, value chain and vertical integration Conduct -How firm operates: branding, diff, cost, innovation, collusion Performance -results: profits, value creation
34
What are the four levels of competition and what is the spectrum of profit?
Perfect competition (passive price takers, no diff) Monopolistic competition (Unique features, can diff) Oligopoly (Firm strategies interdependent) Monopoly (Significant market power)
35
What is the porter five forces model focused on?
Industry structure and how it impacts firm profitability
36
Name the elements of porter five forces
Rivalry among competitors Bargaining power of -buyers -suppliers Threat of -substitutes -new entrants
37
Name things taken into account during porter five forces analysis
Concentration ratio Switching costs Forward/backward integration
38
Are porter five forces analysis atemporal?
No. Must be renewed as industry is dynamic
39
Explain the industry attractiveness diagram and axes
Industrial attractiveness = **Entry-exit barriers **Supplier-buyer power **Threat of substitute-boon of compliment
40
What are the sources of competitive advantage?
Core competencies Capabilities Activities Resources
41
What is the resource based view of competitive advantage? Explain the graph
Tangible and intangible resources That are heterogenous and immobile And have VRIO attributes Provide competitive advantage
42
What are the primary activities of value chain analysis?
Inbound logistics Manufacture and assembly Distribution Marketing and sales Post-sales support
43
What are the support activities of value chain analysis?
R&D Information systems HR Firm infrastructure Accounting, finance, and planning
44
What is ratio analysis used for?
Internal analysis
45
Name 10 key ratios and define
Day sales outstanding (credit repayment) Inventory turnover (time to sell inventory) Asset turnover (sales to assets) Current ratio Quick ratio Debt to equity (leverage) Gross margin (proportion of earnings generated by sales) Net profit margin (net profit to sales) Return on assets (efficiency of asset use, including debt) Return on equity (return on net assets)
46
What is process benchmarking and what is it used to compare?
Compares with internal and external benchmarks
47
What are common forms of benchmarks?
Process Product (external) Function Financial Performance (external)
48
Describe the SWOT framework
External-internal Positive-negative Strengths-weaknesses Opportunities-threats
49
What are types of external analysis?
PESTEL Porter five forces
50
What are types of internal analysis?
VRIO Value chain analysis Benchmarking Ratio analysis
51
What are strategic groups?
Groupings within industries where similar companies compete (e.g. Kia-Ferrari)
52
Relate the layers of external analysis with the appropriate analysis tool
Strategic group and industry: porter 5 Industry: SCP Global: PESTEL
53
What causes new firms to enter an industry?
High growth and profits
54
List the factors impacting analysis
Concentration (HHI) Switching costs/brand loyalty Differentiated product Industry growth rate Forward/backward integration Availability of substitute Excess capacity Purchaser sophistication
55
What are the two views on the bases of competitive advantage? Describe
I/O = industry forces primarily determine performance Resource-based = select the strategy that best exploits available resources c.f. External opponents
56
List corporate growth strategies
Concentration Diversification Vert integration Hori integration
57
Explain the scope of corporate and business level strategies
Business - single product market, focused on competitive advantage Corporate - multiple industries and markets, focused on firm scope and resource allocation
58
What are the three types of strategy?
Growth Stability Renewal
59
What are the Substrategies of the renewal strategy, and what are the chapters associated?
Retrenchment Turnaround Divestiture Liquidation
60
List growth strategies
Concentration Diversification Vertical integration Horizontal integration
61
What are the three dimensions of scope?
Vertical integration Diversification Geographical scope
62
Explain the GE-McKinsey 9 box matrix
X = comparative business strength Y = market attractiveness Invest in upper left (highly attractive, low strength) Neutral in the diagonal Divest from lower right (low attractive, high strength)
63
Explain the diversification strategy matrix
Square of existing product - new product Existing geography - new geography
64
What are benefits of diversification?
-Leverage capabilities in new markets/Econ of scale - new profit and growth opps - spread financial risk -cross-subsidize products, ops
65
What are the stages of diversification?
Single business > 95% Dominant business 70-95% Related diversification < 70% Unrelated diversification < 70%
66
What is the relationship of diversification and performance?
Convex rise and fall in performance with peak at related diversification
67
What are the costs of diversification?
Coordination costs Influence costs
68
What are the types of horizontal integrations, and when is it appropriate?
Merger and acquisition -lack of key capability, product, or resource -economies of scale/scope -industry is crowded with excess cap
69
What happens to most horizontal integrations?
They get blocked by DOJ or otherwise not completed, or the synergies don’t materialize
70
Differentiate red and blue ocean strategies
Red-blue -Compete in existing market//create uncontested market space -beat competition//competition irrelevant -exploit existing demand//create and capture demand -value-cost trade off//break the trade off -either cost leader or differentiate//new system in pursuit of both
71
What are the key risks of blue ocean strategy?
Too early Too new Too different Misread the market Lacks complements Give up too soon
72
What is the productivity frontier?
Represents a set of best in class positions that a firm can take at a given point in time. Sum of all best practices. Always moves outwards Arc between differentiation and cost leadership
73
What is the value innovation framework?
Eliminate Reduce Raise Create
74
What are the elements of a concentration strategy?
Market penetration Market development Product development
75
Explain ansoff’s matrix
Existing product-new product Existing market-new market UL market penetration UR product development LL market development LR diversification
76
What is a blue ocean strategy?
Simultaneous pursuit of cost leader and diff to open a new market space and creste new demand. Based on the view that market boundaries and industry structure are not a given

MGT8803 (8 decks)

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