Strategy Flashcards
corporate strategy vs business strategy
in which business should we go vs. how should we compete
Competitive advantage
differentiation -> chose this firm over another
cost leadership - lower cost of production/distribution
What are resources?
- tangible assets -> real estates, production facilities
- intangible assets -> reputation, brand, culture
- organisational capabilities -> combination of assets -> people, processes
What makes resources valuable?
demand, scarcity, appropriability, inimitability (not possible to imitate)
types of expansion
proactive - action to increase size
reactive - respond to outside threats
SWOT Analysis
Streangths (internal)
Weaknesses (internal)
Opportunities (external)
Threats (external)
Growth Share Matrix
STAR - High growth, high share -> invest because of future potential
CASH COW - low growth, high share -> milk cows to reinvest
QUESTION MARK - High growth, low share -> invest or discard depending on chances of becoming a star
PET - low growth, high share -> liquidate, divest or reposition
Porter’s five forces
Analysis of competitive environment used to guide business strategy
1. Competition in the industry
2. Potential of new entrants into the industry
3. Power of supplies
4. Power of Customers
5. Threat of substitute products
Resource based strategy
Resource Based View (RBV)
- resource is based on unique combination of its resources
– investing in resources
– Upgrading resources
– Leverage resources
Knowledge Based View (KBV)
- Among all resources, “knowledge” is the most important for management
Framework for corporate strategy
- vision -> aspiration and boundaries
- Objective -> quantitative & qualitative goals
- Resources -> assets, skills, capabilities
- Businesses -> The industry in which the firm operates
- Structure, systems, processes -> division, formal, informal elements
–> Corporate Advantage results from all the factors above and its harmonious combination
