Strategy Flashcards
sustainint innovation involve what kind of planning?
deliberate
disruptive innovation involve what kind of planning?
discovery driven planning
performance
how well a product or service works
process of planning for sustaining innovations
make assumptions about the future
define strategy and build financial projections
make investing decisions
implement strategy
process of planning for disruptive innovations
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
decisions to initiate disruptive innovation projects should be based on
pattern recognition
decision to iniciate sustaining innovation projects should be based on
numbers and rules
what will happen over time regarding manager’s innovation and customer’s desires?
manager’s innovation will surpass customer’s desires and become oversatisfied
ironclad rule of management
an organization must go from organic to mechanistic approach
correlation between performance and price
high performance leads to high price
when will a low end disrupter appear?
when an oversatisfied escenario happens
what is nonlinearity?
the same amount of effort over time leads to different results
investing is about..
patience
types of disruptions
big bang
high end disruption
low en disruption
new market disruption
high performance low price type of new disruption
big bang
high performance high price type of new disruption
high end disruption
low performance high price type of new disruption
new market disruption
low performance low price type of new disruption
low end disruption
stages of building a theory
observe phenomena
categorization
statements of association
target customer of new market disruption
non consumers/ unhappy whith complaints
christensen golden role of business
if you target the leading firm in their most profitable market you’ll die
how to measure a client’s happiness?
assess the average customer’s level of satisfaction
low en disrupters strategy
lower price and performance to target oversatisfied customers
low disrupters steps
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
asymetric motivation
mix high end disruptive inovation strategy and low end
factors that determine a company’s capabilities
resources
proceses
values
Patterns of interaction, coordination, communication and decision making employees use to transform resources into products
processes
defined and documented processes
formal
routines or ways of working that have evolved over time
informal processes
The organizations most serious disabilities to cope with change lie in
informal processes
They are inneficient when used for something else than what they were designed for
processes
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
how does values reflect cost structure and business models?
determine How big an opportunity has to be to become interesting
barriers to disruption
excecutives
resource allocation process
you (focus on promotion)
factors within performance
functionality
reliability
external environment can be divided into 2
general environment
industry environment
elements of industry environment
suppliers
potential entrants
substitutes
buyers
porter 5 forces
entry barriers suppliers customers substitutes rivalry
low entry barriers lead to
increase competition and decrease of industry attractiveness
elements that highten a suppliers power
few within industry
key products
threat of integrating forward
no substitutes exist
elements that rise the customer’s power
few number of customers
products are undifferentiated
buyers threaten to integratebackwards
informed buyers
elemets that rise threat of substitutes
many substitutes
buyers face few switching costs
substitutes are less expensive or better quality
product that serves consumer in different way
substitute
rivalry is big if:
many competitors low concentration ratio slow industry growth lack of product diferentiation high exit barriers
what is missing from 5 force model?
cooperation
internal analysis
IO stands for
industrial organization
IO’s focus
external environment is key
RBV stands for
resource based view
RBV’s focus
internal environment
what makkes a resource valuable
scarcity
appropriability
demand
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
avoid overinvesting in resources that
will yeild low returns
if there are no valuable assets
add resources
upgrade to alterantive
move to a more attractive industry for your capabilities
common straegy errors when trying to leverage resources
overestimate transferability
overestimate ability to compete
overestimate the advantage a generic resource will give
to enter an industry with high entry barriers
merger
aquisition
if suppliers have a lot of barganing power the industry…
sucks
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
formula for profit margin
value-cost
core competencies are
what organizations do superior to their competitors
conditions of a core competency 3
valuable
diversifiable
difficult to imitate
only way to know your strenghts
feedback analysis
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
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
a plan should cover no more than this time
18 months
Reasons for synergy failure
synergy upside bias parenting bias skill bias hoarding search bias transfer bias
