Strategy Flashcards
What are the 3 levels of strategy?
- Operational: How business and corporate strategy is delivered, related to people and resources.
- Business strategy: Strategy and how to beat competition in a single market/business
- Corporate strategy: Overall scope of the organization. Which products and markets to include. Also considers diversification, integration, outsourcing and M&A.
What is a strategy canvas and its 3 features?
A map comparing competitors on their performance on key succes factors in the market
- Critical succes factors
- Value curves
- Value innovation
What are the support and primary activities in the value chain?
Support: infrastructure, HR, Tech dev. and procurement
Primary: Inbound log., operations, outbound log., marketing and sales and service.
Which 4 things is the strategic purpose concerned with?
- Governance
- CSR
- Stakeholder expectations
- Culture
What are the 2 governance models?
- Stakeholder model
2. Shareholder model.
What are the 4 approaches to CSR?
- Laissez-faire
- Enlightened self interest
- Forum for stakeholder interaction
- Shaper of society
According to Schein, how many layers does culture consist of and what are these layers?
- Values
- Beliefs
- Behaviours
- Taken for granted assumptions
What positive and negative effects can culture have on strategy?
Positive:
- Cultural glue: a good culture can make the org. easier to manage
- It can form a basis for competitive advantage
Negative:
- Often change is viewed from the perspective of the already existing culture which can be bad if it is a bad culture. This is called captured by culture.
- Can be a barrier to change, since culture can block strategic change and takes a long time to change aswell.
- Managing culture. This can be hard since it is hard to identify taken for granted assumptions.
Explain D’Avenis Interactive price and quality strategy
This theory is based on value lines percieved by the customer and analyses how companies place themselves on these value lines or eventually shifts them. The value line is defined by perceived quality on the x axis and price on the y axis.
What are drivers and potential problems with diversification?
Drivers: Economies of scope, the dominant logic(a good manager can apply his competencies across businesses), increasing market power, exploiting superior internal processes.
Problems: Managerial ambition, responding to market decline(from a shareholder perspective), spreading risk(from a shareholder perspective)
What are potential value creating/destroying activities for a corporate parent?
Value adding: Envisioning, coaching, facilitating synergies, providing resources and capabilites
Value destroying: Adding management costs, increasing bureaucracy, hiding financial underperformance through croos subsidizing.
What does a portfolio manager do?
Operates as an active investor in a way that shareholders cannot due in the stock market due to being too dispersed or inexpert.
What does the parental developer do?
Seek to employ its own central capabilities to the other businesses.
What are the reasons for acquisitions?
- Market power
- Overcome entry barriers
- Cost savings
- increase diversificatin
- Spreading risk
- Managerial ambition
What are potential problems with acquisitions?
- Integration difficulties
- Inability to achieve synergies
- Overpaying
- Getting too diversified
- Resulting firm is too large
- Large or extraordinary debt.
