STRATMGMT - Chapter 5 Flashcards
TRUE OR FALSE: If there is a long delay between an attack and a response, this generally provides the attacker an edge
TRUE
service industries
franchising
This involves creating a new, untapped market rather than competing with rivals in an existing market.
Blue ocean strategy
It refers to the nature of raw material and other inputs that firms need to create goods and services
Factor conditions
“driving pleasure”
Fahvergnugen
What strategy captures the essence of the saying “you get what you pay for”
Differentiation Strategy
borrowed from the arts
Bricolage
This refers to a firm that has operations in more than one country
Multinational corporation
the determinants of national advantage
Diamond model
This adds complexity to decisions about whether to respond to a rival’s moves
Multipoint Competition
This is most frequently used in manufacturing industries
Licensing
With this strategy, a firm tries to balance the desire for efficiency with the need to adjust to local preferences within various countries
Transnational strategy
This refers to how challenging it is to survive domestic competition
Firm strategy, structure, and rivalry
What are the possible responses to Disruptive Innovation?
- Ignore the disruption, thus focus on the traditional strategy
- Attacking the other dimensions
- Simply match the competitor’s move
TRUE OR FALSE: Firms tend to cooperate in activities located far in the value chain from customers, and competition generally occurs close to customer
TRUE
Cost leaders manage to charge low prices but have a profit through the use of ___________
Efficiency
highlights a complex interaction
Co-opetition
TRUE OR FALSE: Successful use of a differentiation strategy depends only on offering unique features to potential customers
FALSE
This is generally best suited for “creating a pie”
Cooperation
This strategy requires competing based on price to target a narrow market
Focused cost-leadership
This refers to when a firm faces the same rival in more than one market
Multipoint Competition
This strategy attempts to convince customers to pay a premium price for its good or services by providing unique and desirable features
Differentiation Strategy
He argued that technological advances and increased interconnectedness is leveling the competitive playing field between developed and emerging countries
Thomas Friedman
A business operation in a foreign country that a firm full owns
Wholly owned subsidiary
TRUE OR FALSE: One drive of the rapid growth of external business over the past two decades has been the opening up of large companies
FALSE (external-internal)
This involves whether a firm is trying to gain an edge by lowering costs down or by offering something unique in the market
Competitive Advantage
Firms that uses focused cost leadership generally perform poorly because they lack a clear market or competitive pricing
FALSE (focused cost leadership-stuck in the middle)
cut-throat
Red ocean strategy
It occurs when rivals do not act aggressively because each recognizes that the other can retaliate in multiple markets.
Mutual Forbearance
TRUE OR FALSE: The pharmaceutical industry is the location of many strategic alliances
TRUE
series of upsprings
Arab spring
A firm using a ___________ sacrifices responsiveness to local requirements within each of its markets in favor of emphasizing efficiency
Global Strategy
TRUE OR FALSE: Overcoming advantages in factor conditions leads companies to develop unique skills
FALSE (disadvantage-advantage)
This refers to the general way of positioning a firm within an industry
General strategy
This is the lower-end brand that a firm introduces to try to protect a firm’s market share without damaging the firm’s existing brands
Fighting brand
A finnish rock band that has created a niche for itself by combining heavy metal music with the imagery and costumes of Vikings
TURISAS
Who discovered the idea of business-level strategy?
Michael Porter
Narrow Market
Niche
It is created when the costs of offering goods and services decreases as a firm is able to sell more items
Economies of Scale
A small position that a firm intentionally establishes within a market in which it does not yet compete
Foothold
It is a cooperative arrangement in which two or more organizations each contributing to the creation of new entity.
Joint venture
This refers to the potential for a company’s operations in a country to struggle because of difference in language, customs, norms, and customer preferences
Cultural risk
This refers to the potential for a country’s economic conditions and policies, property rights protections, and currency exchange rates to harm a firm’s operations within a country
Economic risk
It occurs when job that had been sent overseas are returning home
Reshoring
Cost leaders rely on this one to achieve efficiency
Economies of Scale
granting the right to use
franchising
What are the advantages of marketing internationally?
- Access to new customers
- Lowering costs
- Diversification of business risk
This sacrifices efficiency in favor of emphasizing responsiveness to local requirement within each of its markets
Multidomestic strategy
rapid and unpredictable moves
Hypercompetition
Refers to the potential for government upheaval or interference with business to harm an operation within a country
Political risk
What are the three international strategy?
- Multidomestic strategy
- Global strategy
- Transnational strategy
TRUE OR FALSE: One route toward a best-cost strategy is for a firm to adopt a business model whose fixed costs and overhead and very high relative to the costs that competitors are absorbing
FALSE (high-low)
“He who hestitates is lost”
Joseph Addison
Occurs when a firm’s assets in a country are seized by te national government
Nationalization
It involves creating goods within a firms home country and then shipping them to another country
Exporting
What are the five basic options to enter a new market?
- Exporting
- Creating a wholly owned subsidiary
- Franchising
- Licensing
- Joint venture & strategic alliances
TRUE OR FALSE: The pursuit of uniqueness is often taken to the proverbial “next level” by firms using a Focused cost-leadership
FALSE (cost leadership - differentiation)
What are the four factors under diamond model?
- Demand condition
- Factor condition
- Related and supporting industries
- Firm strategy, structure, and rivalry
This exists when making the initial move into a market allows a firm to establish a dominant position
First-mover advantage
This allow firms to enjoy success that might not otherwise be reached
Cooperative Moves
What are the three types of risk when marketing internationally?
- Political risk
- Economic risk
- Cultural risk
TRUE OR FALSE; Making a first move is generally risky
FALSE (generally-inherently)
A firm following is strategy offers products or services with acceptable quality and features to a broad set of customers at a low price.
Cost-Leadership Strateggy
Land, labor, infrastructure, and capital markets are example of what factor?
Factor conditions
Firms that charge relatively low prices and offer substantial differentiation are using what strategy?
Best-cost strategy
key components of modern vehicles
Electronics
TRUE OR FALSE: A relative lack of market research can lead cost leaders to be less skilled than other firms at detecting important environmental changes.
TRUE
powerful framework
Diamond Model
This strategy explains that an effectively serving the specialized needs of a niche market can create great riches.
Focused Differentiation Strategy
It addresses the question of how a firm will compete in a particular industry
Business-level strategy
“the early birds gets the worm”
First-mover advantage
It means using whatever resources and materials are available as inputs to create a product
Bricolage
This refers to the nature of domestic customers
Demand conditions
TRUE OR FALSE: Executive apply the concept of Joint Venture when they combine ideas from existing businesses to create a new business
FALSE (Joint venture-bricolage)
It refers to the potential that an operation might fail
Business risk
This strategy requires offering a unique features that fulfill the demands of a narrow market.
Focused Differentiation
This involves whether a firm is trying to attract customers in general or trying to attract a specific segment of customers.
Scope of Operations
These are strategies that involves targeting a relatively narrow niche of potential customers
Focus strategies
They are known for insisting on very high levels of quality, aesthetics, and reliability.
Japanese consumers
The extent to which firms’ domestic suppliers and other complementary industries are developed and helpful
Related and supporting industries
What are the two dimensions of business-level strategy?
- Competitive Advantage
- Scope of operations
A firm is said to be a ___________ if it does not offer features that are unique enough to convince the customer to buy its offerings, and its prices are too high to compete effectively based on price
Stuck in the middle
companies exist in what type of world?
flat world
An innovation that conflicts with and threatens to replace traditional approaches to competing within an industry
Disruptive Innovation
This occurs when goods and services offered under different brands are located close to one another.
Colocation
This involves very rapid and unpredictable moves and countermoves that can undermine competitive advantage
Hypercompetition
This enables firms to share resources and to learn from one another’s strengths
Cooperation
TRUE OR FALSE: Business risk is reduced when a firm is involved in multiple countries
TRUE
TRUE OR FALSE: A firms’ business level strategy should try its hardest to serve the varied needs of different segment of customers in an industry.
FALSE
It is a cooperative arrangement between two or more organizations that does not involve the creation of a new entity
Strategic Alliances
TRUE OR FALSE: Focusing on generic strategies allows executives to concentrate on the core elements of firms’ business-level strategies
TRUE
What are the three factors that determines the likelihood that a firm will respond to a competitive move?
- Awareness
- Motivation
- Capability