Strategy models Flashcards
What are the factors of PESTEL? Give examples of each in the oil industry
Political:
Instability in Suadi Arabia
Economical:
Slow economic growth
Social:
Lower car usage
Technology:
Fuel efficient tech
Ecological:
Climate change
Legal:
Pollution laws
PESTEL:
How can the political environment be evaluated?
In terms of two dimensions:
1) Degree of political exposure
2) Degree of direct state involvement
See page 30
PESTEL:
What can be analysed when looking at the social aspect?
One might look into:
1) Demographics
2) Distribution of wealth
3) Geography
4) Culture and attitudes
What is key drivers of change? What can they be used for?
Key drivers for change are the environmental factors likely to have a high impact
on industries and sectors, and the success or failure of strategies within them.
Managers need to address
in their strategic choices. Alternative scenarios about the future can be constructed
according to how the key drivers develop.
What are the elements of Porter’s Five Forces?
1) Extent of rivalry
2) Threat of entry
3) Threat of substitutes
4) Power of buyers
5) Power of suppliers
What insights can be gained from Porter’s Five Forces
It gives an insight into market attractiveness
Five Forces:
What should be considered when evaluating the extent of rivalry?
Competitor concentration and balance:
Many, same-sized competitors = less attractive
Industry growth rate:
Low growth rate = less attractive
High fixed costs:
High costs = less attractive
High exit barriers:
High = less attractive
Low differentiation:
Low = less attractive
What should be considered when evaluating the threat of entry?
Scale and experience:
If incumbants have economies of scale it is hard to enter the market
Access to supply or distribution channels:
Expected retailiation:
High retaliation might prevent entries
Legislation:
Patents or regulation of markets can be examples of how legislation can prevent entries
What should be considered when evaluating the threat of substitutes?
Important to note, that substitutes are OUTSIDE the industry.
Price/Performance ratio:
A substitute can still be a threat if is more expensive, as long as it is equally better
Switching costs:
Are there high switching costs, then the threat decreases
What should be considered when evaluating the power of buyers / suppliers?
Concentrated buyers:
Are there few, large or many, small customers?
Few, large = higher power
Low switching costs:
If buyers can easily shift = higher power
Describe the phases in the industry life cycle
Development:
- Low rivalry
- High differentiation
- Innovation key
Growth:
- Low rivalry
- High growth
- Low entry barriers
- Growth ability key
Shake-out:
- Slower growth
- Managerial and financial strenght key
Maturity:
- Low growth
- Standard products
- High entry barriers
- Market share and cost key
Decline:
- Many exits
- Price competition
- Cost and commitment key
What is a strategy canvas?
A strategy canvas compares competitors according to their performance on key success
factors in order to establish the extent of differentiation.
It highlights:
- CSF
- Value curves
- Value innovation/Blue Ocean
What does the resource-based view (RBV) state?
the competitive advantage and superior performance of
an organisation are explained by the distinctiveness of its resources and capabilities.
What is the difference between resources and capabilities?
Resources: what we have (e.g. assets)
Capabilities: what we do well (e.g. processes)
What is threshold resources and capabilities?
Threshold resources and capabilities are those needed for an organisation to meet the necessary requirements to compete in a given market and achieve parity
with competitors in that market.
What are the elements of the VRIO framework?
Value:
Do resources and capabilities exist that are valued by customers and enable the organisation to respond to environmental opportunities or threats?
Rarity:
Do resources and capabilities exist that no (or few) competitors possess?
Inimitability:
Are resources and capabilities difficult and costly for competitors
to obtain and imitate?
Organisational support:
Is the organisation appropriately organised to exploit the
resources and capabilities?
What must be considered when evaluating “value” in VRIO?
Does the capability address opportunities or threats in the environment?
Is the capabilities valued by customers?
Can the costs be held low enough?
What are the different outcomes of the VRIO framework?
If not valuable: Competitive disadvantage
If not rare:
Competitive parity
If not inimitable:
Temporary comp. ad.
If not supported by organization:
Unused comp. ad.
If all is fulfilled:
Sustained comp. ad.
Give examples of rare capabilities/resources
Resources:
- Patentes
- Unique book collection
- Unique services
- Brand
Capabilities:
- Unique skills
- Unique processes
- Special relationships with customers/suppliers
Describe the TOWS matrix
The TOWS matrix is used in the discussion of future choices and options.
S+O: Use strengths to exploit opportunities
S+T: Use strengths to avoid threats
W+O: Use opportunities to overcome weaknesses
W+T: Minimise weaknesses and avoid threats
What are stakeholders?
stakeholders are
those individuals or groups that depend on an organisation to fulfil their own goals and on
whom, in turn, the organisation depends.
What is stakeholder mapping?
Stakeholder mapping identifies stakeholder power and attention in order
to understand political priorities.
See page. 116 for figure
What is CSR?
ypically expect greater responsibility on
the part of organisations than the bare minimum. Corporate social responsibility (CSR) is the
commitment by organisations to behave ethically and contribute to economic development
while improving the quality of life of the workforce and their families as well as the local
community and society at large
What are the different stances on CSR?
Laissez-faire:
Enlightened self-interest
Forum for stakeholder interaction
Shaper of society
See p. 125
What are the cultural web and the individual elements?
The cultural web shows the behavioural, physical and symbolic manifestations of a
culture that inform and are informed by the taken-for-granted assumptions, or paradigm,
of an organisation
Paradigm:
Assumptions held common and taken for granted
Rituals and routines:
How things are done and events used to emphasize the culture
Stories:
Symbols:
Power:
Organizational structures:
Control systems:
What is a competitive advantage?
competitive advantage is about how a company, business unit
or organisation creates value for its users both greater than the costs of supplying them and
superior to that of rivals.
