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MGMT 449 > Test 1 > Flashcards

Test 1 Flashcards

1
Q

A.Profound understanding of the competitive environment

B.Objective appraisal of resources

A

Strategic Choice
A.External analysis
B. Internal analysis

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2
Q

A set of integrated and coherent choices and actions that allow firms to provide unique value that is superior to the competition

A

Strategy Statement

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3
Q

The expectation that businesses or individuals will strive to improve the overall welfare of society

A

Social Responsibility

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4
Q

Make a number of possible paths about a future and assign their likliehood

A

Scenario Planning

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5
Q

PESTEL

General Environment

A 
Political
Economic
Social
Technological
Environment
Legal
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6
Q

Book says

General Environment

A 
Demographic
Sociocultural
Political/legal
Technological
Economic
Global
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7
Q

Encompass the broad environmental context in which a company’s industry is situated

A

Macro-environment

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8
Q
  • High capital requirement

- Economies of Scale

A

Cost disadvantage of new entrants

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9
Q

Limit the potential returns of an industry by placing a ceiling on the prices that firms can profitably charge

A

Substitute products/services

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10
Q
  • small # of firms
  • unique/highly differentiated products
  • Threaten “forward vertical integration”
A

Supplier Bargaining power

Profit

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11
Q
  • ability to do backward vertical integration
  • product sold are undifferentiated and price transparent
  • switching costs to competing sellers
A

Powerful Buyers bargaining power

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12
Q

The degree to which a seller can steal buyers from other sellers

cost involved if buyers wants to
switch to different firms

A

Switching costs

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13
Q

Group of firms producing products or services that are perceived by customers as meeting the same needs

A

Industry

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14
Q

Strategies as building defenses against the competitive forces or finding a position where the forces are weakest

A

Positioning the company

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15
Q

Technology, regulation, social trend may change the bases of industry structure
(shifting threats of five forces)

A

Exploiting Industry change

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16
Q

Leaders guide their industries toward a new ways of competing that alter the five forces for the better

A

Shape Industry structure

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17
Q

The value net

A

Remedy of the problem in the Five Force Model

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18
Q

Clusters of firms that share similar strategies:
Price/quality
Degree of vertical integration
type of distribution

A

Strategic Grpups

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19
Q

Involves surveillance of a firm’s external environment

  • predicts changes to come
  • allows firm to be procactive
A

Environmental Scanning

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20
Q

tracks evolution of environmental trends
hard- measurable facts
soft- estimated, probable events

A

Environmental monitoring

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21
Q

Helps firm define and understand their industry

-identify rivals strengths/weaknesses

A

Competitive intelligence

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22
Q

predicts change

A

Environmental forecasting

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23
Q

involves detailed assessments of the ways trends may affect an issue and development of alternative futures based on these assessments

A

Scenario analysis

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24
Q

Forces managers to consider both internal and external factors
Makes firms act proactively
Raises awareness about role of strategy

A

SWOT Analysis

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25
Q

forces influence the values, beliefs, and lifestyles of a society
-more women in workforce

A

Sociocultural

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26
Q

processes and legislation influence environmental regulations with which industries must comply

  • ADA (disabilities)
  • Deregulation of utilities
  • increase min wage
A

Political/legal

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27
Q

Developments lead to new products and services; can create new industries and alter existing ones

  • Genetic engineering
  • wireless commmunication
A

Technological

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28
Q

Affect all industries

  • interest rate
  • unemployment
  • consumer price index
A

Economic Forces

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29
Q

offer both opportunities and risks

  • currency exchange rates
  • trade agreements
A

Global

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30
Q

consists of factors in the task or industry environment that are particularly relevant to a firm’s strategy

A

Competitive environment

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31
Q

Looks at the sequential process of value-creating activities
-how is value created within organization?

A

Value-chain analysis

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32
Q

contribute to the physical creation of the product or service; the sale and transfer to the buyer; and service after the sale

A

Value-chain PRIMARY activities

  • Inbound logistics
  • operations
  • outbound logistics
  • marketing and sales
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33
Q

Either add value by themselves or add value through important relationships with both primary activities and ___ activities

A

Value-chain SUPPORT activities

  • procurement
  • tech development
  • human resource mgmt
  • general admin
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34
Q

-Expand value chain by exchanging resources

A

Interrelationships among value-chain activities

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35
Q

Combines internal and external analysis of the industry and its competitive environment

A

Resource-based view of firm

RBV

36
Q

-Physical assets - plant, machinery and equip

Financial Assets - cash

Tech assets - patents, copyrights

Organizational resources - effective planning processes and control sytems

A

Tangible resources

easy to identify

37
Q
  • Human resources - trust, capabilities of employees
  • Innovation resources - technical and scientific expertise and ideas
  • Reputation resources - brand names
A

Intangible resources

difficult for competitors to account for or imitate - embedded in unique culture

38
Q

Competencies or skills that a firm employs to transform inputs into outputs; the capacity to combine tangible and intangible resources to attain desired ends

A

Organizational capabilities

39
Q
  1. Valuable
  2. Rare
  3. Difficult to imitate
  4. Difficult to substitute
A

Strategic resources 4 attritubutes

40
Q
  • Balance sheet
  • income statement
  • market valuation
  • Historical compensation
  • comparison with key competitors
A

Financial Ratio Analysis

evaluating firm performance

41
Q
  1. Short term solvency or liquidity
  2. long-term solvency measures
  3. Asset management or turnover
  4. Profitability
  5. Market Value

Meaningful ____ must include

  • How rations change over time
  • how ratios are interrelated
A

5 types of financial ratios

42
Q
  • Employees
  • owners
  • customer satisfaction
  • internal processes
  • Innovation, learning, and improvement activities
A

Balanced scorecard

evaluating firm performance

43
Q

A meaningful integration of many issues that come into evaluating performance

  • how do customers see us?
  • how do we look to shareholders?
A

Balanced scorecard

44
Q

A company’s value is not derived solely from its physical assets. Rather it is based on knowledge, know-how, and intellectual assets - all embedded in people

A

Central role of knowledge

45
Q

Wealth is increasingly created by effective management of knowledge workers instead of by the efficient control of physical and financial assets

A

Knowledge Economy

46
Q

measure of value of firm’s intangible assets- the difference between a firms market value and book value

A

Intellectual capital

  • reputation
  • employee loyalty
  • customer relationships
  • company values
47
Q

includes individual capabilities, knowledge, skills, and experience of company’s employees and managers

A

Human capital

48
Q

The friendships and working relationships among talented individuals- helps tie knowledge workers to a given firm

Interaction, sharing, collaboration will help develop firm

A

Social capital

49
Q

codified, documented, easily reproduced, widely distributed

A

Explicit knowledge

50
Q

in minds of the employees, based on their experiences and backgrounds

A

Tactic knowledge

51
Q
  • Hiring via personal social networks

- pied piper effect -same job candidates may bring other talent with them

A

How social capital helps attract and retain talent

52
Q

Depicts the pattern of interactions among individuals and helps to diagnose effective and ineffective patterns

A

Social Network

53
Q

The degree to which all members of the social network have relationships with other group members

A

Closure relationships

social network

54
Q

Structural holes

-Connect otherwise disconnected people

A

Bridging Relationships

social network

55
Q

Groupthink

  • dysfunctional human resource practices
  • expensive socialization processes
  • individuals distort or selectively use information to favor themselves
A

Limitations to Social capital

56
Q

capacity to build and protect a competitive advantage

A

Dynamic capabilities

57
Q

Overall cost leadership
Differentiation
Focus

A

Porters 3 generic strategies

58
Q
  • Creating low-cost position relative to a firm’s peers

- managing relationships throughout the entire value chain to lower costs

A

Overall cost leadership

McDonalds, Walmart

59
Q

Products and/or services that are unique and valued

-emphasis on nonprice attributes for which customers will gladly pay premium

A

Differentiation

Apple

60
Q

Narrow product lines, buyer segments, or targeted geographic markets
-advantages obtained either through differentiation or cost leadership

A

Focus

Ikea,Costco

61
Q
  • Vigorous pursuit of cost reductions from experience
  • Tight cost reductions from experience
  • Lower costs through experience curve
  • Competitive parity - “on par” with competitors in low-cost, differentiation, or other strategies
A

Cost Leadership involves

62
Q
  • Too much focus on one or a few value chain activities
  • Increase in the cost of inputs on which the advantage is based
  • strategy can be imitated easily
  • reduces flexibility
A

Pitfalls to cost leadership

63
Q
  • prestige or brand image
  • technology
  • innovation
  • features
  • customer service

A level of cost parity relative to competitors

  • superior material handling
  • personal relationships with key customers
A

Differentiation Strategy

64
Q
  • Creates higher entry barriers due to customers loyalty
  • higher margins
  • reduces buyer power because buyers lack suitable alternatives
A

Advantages to Differentiation

65
Q
  • Uniqueness that is not valuable
  • too high a price premium
  • dilution of brand identification through product line extension
A

Pitfalls to differentiation

66
Q

Based on choice of narrow competitive scope within an industry
-firm selects a segment and tailors its strategy to serve them

Cost focus
-creates cost advantage in its target segment

Differentiation focus

  • differentiates itself in its target market
  • exploits special needs of buyers
A

Focus Strategy

67
Q
  • Erosion of cost advantages within the narrow segment

- still subject to competition from new entrants and imitation

A

Pitfalls of Focus

68
Q

Makes it difficult for competitors to duplicate or imitate strategy

Combination strategy to provide unique value in efficient manner

A

Combination strategy: low-cost and differentiation

69
Q
  • creates higher entry barriers due to both ___
  • Can provide higher margins that enable the firm to deal with supplier power
  • reduces buyer power because of fewer competitors
  • an overall value proposition reduces threat from substitutes
A

Integrated overall low cost and differentiated strategy

70
Q

New technologies, shifting social and demographic trends, and sudden changes in the business environment can create opportunities

  • involves value creation and the assumption of risk
  • startup ventures
  • major corporations
  • nonprofit organizations
A

Entrepreneurial Strategy

71
Q
  • attractive
  • achievable
  • durable
  • value-creating
A

Viable opportunities

72
Q

depend on stage of venture development and venture scale

A

Financial resources

73
Q

Personal savings, family, and friends

-crowdfunding

A

Initial start up financing

74
Q

Bank financing, angel investors

A

Early stage financing

75
Q

Commercial banks, venture capitalists equity financing

A

Later stage financing

76
Q

An entrepreneur’s most important asset

- requires transformational leadership

A

Vision

77
Q

Helps explain why strategies evolve and how to respond:

  • New competitive action
  • threat analysis
A

Competitive dynamics

78
Q

involves an assessment of

  • market commonality
  • resource similarity

-what is the intent of the competitive response?

A

Threat Analysis

79
Q

Strategic actions - entering new markets, new product introductions, changing production capacity, mergers/alliances

Tactical actions - price cutting(or increases), product/service enhancements, increased marketing efforts, new distribution channels

A

Competitive dynamics types

80
Q

Market dependence

  • competitor’s resources
  • the reputation of the firm that initiates the action -actor’s reputation
A

Likelihood of competitive reaction

81
Q

Forbearance

co-operation- working together behind the scenes to achieve industrywide efficiencies

A

Choosing not to respond

82
Q

Analysis
-vision, mission, internal and external environment

Decisions -formulation
-what industries should we compete in?

Actions - implementation
-allocate necessary resources

A

Strategic management

83
Q

Starting point in strategic mgmt process
-involves careful analysis of the overarching goals of the organization

  • Establish hierarchy of goals
  • vision, mission, objectives

Analyze external environment
-managers must monitor and scan environment as well as competitors

Assessing internal environment
-strengths and relationships

Assessing firms intellectual assets
- knowledge workers and networks and relationship

A

Strategy analysis

84
Q

the relationship among various participants in determining the direction and performance of corporations

  • shareholders
  • mgmt (CEO)
  • board of directors
A

Corporate governance

85
Q

Zero sum

  • stakeholders compete for attention and resources
  • gain of one is loss to the other

Symbiosis

  • stakeholders are dependent upon each other for success and well being
  • receive mutual benefits
A

2 views of stakeholder management

86
Q

the expectation that businesses or individuals will strive to improve the overall welfare of society

-firms must create shared value -identify and expand connections between societal and economic progress

A

Social responsibility

87
Q

Firms can measure a triple bottom line

-assessing financial, social, and environmental performance

A

Environmental sustainability

MGMT 449 (1 decks)

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