Strategy Flashcards
1
Q
sustainint innovation involve what kind of planning?
A
deliberate
2
Q
disruptive innovation involve what kind of planning?
A
discovery driven planning
3
Q
performance
A
how well a product or service works
4
Q
process of planning for sustaining innovations
A
make assumptions about the future
define strategy and build financial projections
make investing decisions
implement strategy
5
Q
process of planning for disruptive innovations
A
make targeted financial projections
what has to happen for the projections to happen
implement a plan to test whether the assumptions are reasonable
invest on implementation
6
Q
decisions to initiate disruptive innovation projects should be based on
A
pattern recognition
7
Q
decision to iniciate sustaining innovation projects should be based on
A
numbers and rules
8
Q
what will happen over time regarding manager’s innovation and customer’s desires?
A
manager’s innovation will surpass customer’s desires and become oversatisfied
9
Q
ironclad rule of management
A
an organization must go from organic to mechanistic approach
10
Q
correlation between performance and price
A
high performance leads to high price
11
Q
when will a low end disrupter appear?
A
when an oversatisfied escenario happens
12
Q
what is nonlinearity?
A
the same amount of effort over time leads to different results
13
Q
investing is about..
A
patience
14
Q
types of disruptions
A
big bang
high end disruption
low en disruption
new market disruption
15
Q
high performance low price type of new disruption
A
big bang
16
Q
high performance high price type of new disruption
A
high end disruption
17
Q
low performance high price type of new disruption
A
new market disruption
18
Q
low performance low price type of new disruption
A
low end disruption
19
Q
stages of building a theory
A
observe phenomena
categorization
statements of association
20
Q
target customer of new market disruption
A
non consumers/ unhappy whith complaints
21
Q
christensen golden role of business
A
if you target the leading firm in their most profitable market you’ll die
22
Q
how to measure a client’s happiness?
A
assess the average customer’s level of satisfaction
23
Q
low en disrupters strategy
A
lower price and performance to target oversatisfied customers
24
Q
low disrupters steps
A
select the lower profit product within an industry
find a way to make it cheaper (sacrifice performance)
appeal to oversatisfied customers
improve performance over time
25
asymetric motivation
mix high end disruptive inovation strategy and low end
26
factors that determine a company's capabilities
resources
proceses
values
27
Patterns of interaction, coordination, communication and decision making employees use to transform resources into products
processes
28
defined and documented processes
formal
29
routines or ways of working that have evolved over time
informal processes
30
The organizations most serious disabilities to cope with change lie in
informal processes
31
They are inneficient when used for something else than what they were designed for
processes
32
Standards by which employees set priorities that enable them to judge wether o not an order is atractive and if a customer is important or if a new product is attractive, etc.
values
33
how does values reflect cost structure and business models?
determine How big an opportunity has to be to become interesting
34
barriers to disruption
excecutives
resource allocation process
you (focus on promotion)
35
factors within performance
functionality
| reliability
36
external environment can be divided into 2
general environment
| industry environment
37
elements of industry environment
suppliers
potential entrants
substitutes
buyers
38
porter 5 forces
```
entry barriers
suppliers
customers
substitutes
rivalry
```
39
low entry barriers lead to
increase competition and decrease of industry attractiveness
40
elements that highten a suppliers power
few within industry
key products
threat of integrating forward
no substitutes exist
41
elements that rise the customer's power
few number of customers
products are undifferentiated
buyers threaten to integratebackwards
informed buyers
42
elemets that rise threat of substitutes
many substitutes
buyers face few switching costs
substitutes are less expensive or better quality
43
product that serves consumer in different way
substitute
44
rivalry is big if:
```
many competitors
low concentration ratio
slow industry growth
lack of product diferentiation
high exit barriers
```
45
what is missing from 5 force model?
cooperation
| internal analysis
46
IO stands for
industrial organization
47
IO's focus
external environment is key
48
RBV stands for
resource based view
49
RBV's focus
internal environment
50
what makkes a resource valuable
scarcity
appropriability
demand
51
a valuable resource must
```
help produce something the customer want at a price they want to pay
be hard to immitate
be durable
appropriable
hard to substitute
be competitive superior
```
52
avoid overinvesting in resources that
will yeild low returns
53
if there are no valuable assets
add resources
upgrade to alterantive
move to a more attractive industry for your capabilities
54
common straegy errors when trying to leverage resources
overestimate transferability
overestimate ability to compete
overestimate the advantage a generic resource will give
55
to enter an industry with high entry barriers
merger
| aquisition
56
if suppliers have a lot of barganing power the industry...
sucks
57
IO key assumptions
external environment is more influential
the company success is tied to the environment
it is a good industry if there are high entry barriers
58
formula for profit margin
value-cost
59
core competencies are
what organizations do superior to their competitors
60
conditions of a core competency 3
valuable
diversifiable
difficult to imitate
61
only way to know your strenghts
feedback analysis
62
personal strenghts highlights
```
find your strenghts
waste no effort on areas of low competnece
discover reader or listener
do not try to change yourself
improve your best areas
```
63
what should i do? process
identify what does the situtation require
identify what you can contribute given your strenghts
what results have to be achieved to make a differenrce
64
a plan should cover no more than this time
18 months
65
Reasons for synergy failure
```
synergy upside bias
parenting bias
skill bias
hoarding
search bias
transfer bias
```
66
parenting bias
managers wanting to force synergy
67
effect of parenting bias?
when synergy is forced employees will only do it when management is looking, and theyll stop once they are left alone
68
what is synergy upside bias?
managers being overconfident on synergy working based on a hunch rather than facts
69
what is skills bias?
assuming that the divisions have the sills to create synergy when in reality they are too focusen con competition
70
what is hoarding bias?
divisions not wanting to share knowledge or skills
71
what is search bias
bad IT in place
72
what is transfer bias
difficulty transfering tacit knowledge.
73
rule to engange in diversification via M&A
the net present value must be above 0
74
why is diversification good for managers
lowers employment risk
justification fro more compentition
rises managerial hubris and emperie building asprations
75
time compression diseconomies
If you try to get a result in a shorter amount of time than required you'll get side effects
76
elements of strategy analysis
```
industry analysis (porter 5 forces)
customer trends
environmental forecast
competitor analysis
internal analysis
```
77
elements of strategy
```
arenas
vehicles
differentiatiors
staging
economic logic
```
78
what are strategy arenas?
where will the strategy take place
79
list of strategy arenas
product categories
markets
segments
geography
80
what are strategy diferentiators?
how we will win the marketplace. can be combined
81
list of diferentiators
```
image
customization
price
styling
quality
```
82
what is strategy staging?
speed and sequence of moves
83
what are the economic logic strategies?
lowest cost through scale
lowest cost through scope and replication
permium prices bc service
premium prices bc unique features
84
3 types of business as per their portfolio
settlers
migrators
pioneers
85
what are settlers?
business that offer me too products
86
what are migrators
busines with value improvements compared to the average
87
what are pioneers
busnisess that have value innovations
88
why should you pay attention to substitute industries?
the space between them provide opportunities for value innovation
89
which substitutes should you explore when there are many
high volume of usage
| high dollar value
90
what are strategic groups
group of companies within an industry with a similar strategy
91
good strategy when analyzing strategic groups
take the decisive advantage of 2 different but complementary strategic groups
92
what is the chain of buyers
chain of customers involved in the buying decision
93
what to do if the industry is at one end of the functional-emotional spectrum?
do the other
94
how are emotionally oriented industries?
offer many extras that lead to
| high price without elevating funcionality
95
3 important principles to assess trends over time
decesiveness to your business
irreversability
clear trajectory
96
what to do once you have identified a trend?
imagine what is its logical conclusion. work back from that to identify what needs to change to reach that superior value
97
steps when renewing organizations
```
establish sense of urgency
form powerful guiding coalition
vision
communicate vision
empower to act on vision
plan and create short-term wins
consistency
institutionalize new approaches
```
98
how to establish a sense of urgency
find a way to communicate continuously, broadly and dramatically about
- crises
- potential crises
- great opportunities
99
percentage of failure at establishing sense of urgency
50%
100
indices of a declining competitive position
```
new competition
shrinking margins
decreasing market share
flat earnings
lack of revenue growth
```
101
goal of establishing sense of urgency
mking it seem more dangerous to stay the same way than to launch into the unknown
102
good way to create a powerful guiding coallition
offsite retreats
103
what will happen without a powerful enough guiding coallition?
the opposition will stop change easily
104
members of a powerful guiding coallition
senior managers
board members
key customer representatives
powerful union leaders
105
how to now if your vision is good enough
you can communicate it in 5 minutes or less and get a reaction that signifies understanding and interest
106
3 common mistakes when communicating vision
communication via 1 single meeting
only CEO speeches
nwesletters and speeches but contradictory behaviour from top excecutives
107
obstacles of new vision
employee's mindest
organizational structure
compenzation systems
incongruent bosses
108
how early do you need a win?
1 to 2 years in
109
how long does it take for cultural changes to be completed
5 to 10 years
110
2 ways to help institutionalize new approaches
help people see the good results from their new behaviours
| educate next generation of top managers
111
levels of strategy
competitive
| corporate
112
what is competitive strategy?
how to create competitive advantage in each of the businesses a company is in
113
premises about diversification
competition occurs at business unit level
diversification adds costs to business units
shareholders can diversify themselves
114
portfolio management principles
diversification through acquisition
autonomous units compensated based on results
corporation supplies capital and management techniques
115
inter unit connection types
transfering skills
| sharing activities
116
transfering skills between units leads to competitive advantage if
similar activities
involves core skills
represents high value for receiving unit
117
tests that determine if an acquisition provides true value
attractiveness
cost of entry
better off
parenting
118
steps of choosing a corporate strategy
identify relationships among existing business units
ID opportunities to share skills
select core business
dispose of units not related
lay groundwork for diversification and create horizontal relationships among core
businesses
pursue diversification that have shared activities
pay dividends
119
how to mae certain a core business is sound?
upgrading management
internationalizing strategy
improving tech.
120
what to do if shared activities between units are limited?
pursue diversification through transfer of skills
121
a buyer group is powerful if
```
mayoristas
standard product
low profit margin
quality is unimportant
threat of backwards integration
```
122
a company should sell to powerful buyers only if...
its a low cost producer or the product has unique features
123
a supplier group is powerful if
few companies
unique product
no competition
threat of foward integration
124
threat of a powerful supplier
rise prices & reduce quality
125
high competition with rivals is related to
```
same size
slow growth
lack of diferentiation
high fixed costs
perishable products
high exit barriers
```
126
lower cost comes from
good effiency
127
2 ways of strategic positioning
different activities than rivals
| same activities in different ways
128
the sum of all existing best practices at any given time, maximum value a company can create
productivity frontier
129
decisions made by high level excecutive regarding the future of a company
corporate level strategy
130
scope of corporate strategy
portfolio and industries
131
scope types
vertical
geographical
horizontal
132
what is vertical scope?
vertical integration strategy, are we making or outsourcing?
133
wha is horizontal scope
product diversification strategy
134
when is best to vertically integrate?
when your product performance is not yet good enough so you can experiment
135
when the product's performance is better than what's demanded what should you invest in?
speed
convenience
customization
136
when should you outsource
when the product is more than good enough
137
what is comoditization?
final stage of product, there is no diferenciation and must compete on price
138
best strategy for commodities
passionate personalization
139
product diversification has a negative relationship with...
geographical diversification
140
How should the corporate office manage its group of businesses
synergy
141
whats the essence of strategy?
finding an industry that is not yet good enough, and vertically integrate to be able to experiment, get the performance up and make a lot of money.
142
The strategy with the most probability to succeed is also the one with the most probability to fail.
strategy paradox
143
the oposite of sucess
doing nothing (mediocrity)
144
CEO life cylce stages
```
respond to mandate
experimentation
selection of enduring theme
converging
dysfunction
```
145
at what stage of its life cylce should a CEO be replaced?
converging
146
3 types of people
takes
marchers
givers
147
google employees categories
butterflies
| lone stars tshaped managers
148
why do butterflies are the ones that fail the most in life?
they five without consideration of own well being and get taken advantage of
149
cost of entry test elements
how much does it cost to enter the industry
| can we get the money quickly?
150
atractiveness test question
is it gonna make money
151
better off test question
is there syergy with existing structures
152
traffic lights framework elements
value advantage
existing business
profit pool
sponsorship
153
kinds of growth
seasonal
| secular
154
mckinsey 3 horizons
h1 stable main business
h2 emerging business with potential
h3 uncertain huge potential
155
dynamic capability
being able to manage H1, H2, H3 at the same time
156
doing something because its time
time pacing
157
event ppacing
when we are reactive to environment and competitors
158
focus on H1
```
ROI
market share
revenue
efficency
reducing costs
```
159
H3 focus
survival
| taking risks
160
theory of dynamic capability
do the next right step, where you'll end up will show on its own
161
where should your focus be according to the theory of dynamic capablity?
being flexible and taing advantag of fleeting opportunities
162
complexity theory
too much conection creates rigidity and too little creates chaos
163
how to create simple rules
determine objective
find real bottleneck
craft rules
164
the perfect life is a balance between....
being
loving
working
