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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
Q

Explain porters genetic strategies

A

Scope: narrow or broad
Source of competitive adv: cost or diff

Cost leadership
Cost focus
Diffentiation
Differentiation focus

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26
Q

Where do companies not want to be in porter’s generic strategies?

A

I’m the middle

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27
Q

What is the business model?

A

Company’s plan for making a profit

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28
Q

Porter: what is the essence of strategy?

A

Choosing what not to do

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29
Q

Porter: what is strategy about?

A

Making choices and deliberately choosing to be different

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30
Q

What elements make up the external environemnt?

A

General environment
Industry
Market
Firm

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31
Q

What are the elements of PESTEL analysis?

A

Political
Economic
Socio-cultural
Technological
Ecological
Legal/ethical

32
Q

Explain the PESTEL prioritization matrix

A

X = impact
Y = probability of occurance

Formulate strategy for Med-high impact and prob of occur

33
Q

What is the SCP model and what do each mean?

A

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
Q

What are the four levels of competition and what is the spectrum of profit?

A

<fragmented: low profit>
Perfect competition
(passive price takers, no diff)
Monopolistic competition
(Unique features, can diff)
Oligopoly
(Firm strategies interdependent)
Monopoly
(Significant market power)
<consolidated: high profit>

35
Q

What is the porter five forces model focused on?

A

Industry structure and how it impacts firm profitability

36
Q

Name the elements of porter five forces

A

Rivalry among competitors
Bargaining power of
-buyers
-suppliers
Threat of
-substitutes
-new entrants

37
Q

Name things taken into account during porter five forces analysis

A

Concentration ratio
Switching costs
Forward/backward integration

38
Q

Are porter five forces analysis atemporal?

A

No. Must be renewed as industry is dynamic

39
Q

Explain the industry attractiveness diagram and axes

A

Industrial attractiveness =
**Entry-exit barriers
**Supplier-buyer power
**Threat of substitute-boon of compliment

40
Q

What are the sources of competitive advantage?

A

Core competencies
Capabilities
Activities
Resources

41
Q

What is the resource based view of competitive advantage? Explain the graph

A

Tangible and intangible resources
That are heterogenous and immobile
And have VRIO attributes
Provide competitive advantage

42
Q

What are the primary activities of value chain analysis?

A

Inbound logistics
Manufacture and assembly
Distribution
Marketing and sales
Post-sales support

43
Q

What are the support activities of value chain analysis?

A

R&D
Information systems
HR
Firm infrastructure
Accounting, finance, and planning

44
Q

What is ratio analysis used for?

A

Internal analysis

45
Q

Name 10 key ratios and define

A

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
Q

What is process benchmarking and what is it used to compare?

A

Compares with internal and external benchmarks

47
Q

What are common forms of benchmarks?

A

Process
Product (external)
Function
Financial
Performance (external)

48
Q

Describe the SWOT framework

A

External-internal
Positive-negative
Strengths-weaknesses
Opportunities-threats

49
Q

What are types of external analysis?

A

PESTEL
Porter five forces

50
Q

What are types of internal analysis?

A

VRIO
Value chain analysis
Benchmarking
Ratio analysis

51
Q

What are strategic groups?

A

Groupings within industries where similar companies compete (e.g. Kia-Ferrari)

52
Q

Relate the layers of external analysis with the appropriate analysis tool

A

Strategic group and industry: porter 5
Industry: SCP
Global: PESTEL

53
Q

What causes new firms to enter an industry?

A

High growth and profits

54
Q

List the factors impacting analysis

A

Concentration (HHI)
Switching costs/brand loyalty
Differentiated product
Industry growth rate
Forward/backward integration
Availability of substitute
Excess capacity
Purchaser sophistication

55
Q

What are the two views on the bases of competitive advantage? Describe

A

I/O = industry forces primarily determine performance

Resource-based = select the strategy that best exploits available resources c.f. External opponents

56
Q

List corporate growth strategies

A

Concentration
Diversification
Vert integration
Hori integration

57
Q

Explain the scope of corporate and business level strategies

A

Business - single product market, focused on competitive advantage

Corporate - multiple industries and markets, focused on firm scope and resource allocation

58
Q

What are the three types of strategy?

A

Growth
Stability
Renewal

59
Q

What are the Substrategies of the renewal strategy, and what are the chapters associated?

A

Retrenchment
Turnaround
Divestiture
Liquidation

60
Q

List growth strategies

A

Concentration
Diversification
Vertical integration
Horizontal integration

61
Q

What are the three dimensions of scope?

A

Vertical integration
Diversification
Geographical scope

62
Q

Explain the GE-McKinsey 9 box matrix

A

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
Q

Explain the diversification strategy matrix

A

Square of
existing product - new product
Existing geography - new geography

64
Q

What are benefits of diversification?

A

-Leverage capabilities in new markets/Econ of scale
- new profit and growth opps
- spread financial risk
-cross-subsidize products, ops

65
Q

What are the stages of diversification?

A

Single business > 95%
Dominant business 70-95%
Related diversification < 70%
Unrelated diversification < 70%

66
Q

What is the relationship of diversification and performance?

A

Convex rise and fall in performance with peak at related diversification

67
Q

What are the costs of diversification?

A

Coordination costs
Influence costs

68
Q

What are the types of horizontal integrations, and when is it appropriate?

A

Merger and acquisition

-lack of key capability, product, or resource
-economies of scale/scope
-industry is crowded with excess cap

69
Q

What happens to most horizontal integrations?

A

They get blocked by DOJ or otherwise not completed, or the synergies don’t materialize

70
Q

Differentiate red and blue ocean strategies

A

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
Q

What are the key risks of blue ocean strategy?

A

Too early
Too new
Too different
Misread the market
Lacks complements
Give up too soon

72
Q

What is the productivity frontier?

A

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
Q

What is the value innovation framework?

A

Eliminate
Reduce
Raise
Create

74
Q

What are the elements of a concentration strategy?

A

Market penetration
Market development
Product development

75
Q

Explain ansoff’s matrix

A

Existing product-new product
Existing market-new market
UL market penetration
UR product development
LL market development
LR diversification

76
Q

What is a blue ocean strategy?

A

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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