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AREC 684 > Topics 2 & 3 > Flashcards

Topics 2 & 3 Flashcards

1
Q

What is strategy?

A
  • long term OBJECTIVES
  • course of ACTION
  • allocation of RESOURCES
  • important TRADE-OFFS
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2
Q

What is Operational Effectiveness?

A
  • increasing efficiency
  • generally includes benchmarking which by definition means doing things similarly to competitors
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3
Q

What is TPS

A

The Positioning School - positioning achieves competitive advantage

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4
Q

What is RBV

A

Resource-Based View - strategic resources provide competitive advantage
Resources -> Capabilities -> Competitive advantage -> Strategy -> Repeat

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5
Q

What is TPS strategy?

A
  • distinctive activities or methods
  • trade-offs
  • fit between activities
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6
Q

What are the principles/sources of uniqueness TPS?

A

variety- based
needs-based
access-based

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7
Q

What are the requirements for a strategic resource in RBV?

A

Valuable
Rare
Inimitable
Organized to take advantage of it
Non-substitutable

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8
Q

What are the four big issues in strategy?

A
  • Boundaries of the firm
  • Market and Competitive Analysis
  • Positioning and Dynamics
  • Internal Organization
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9
Q

What is the strategic management process?

A
  1. Strategic Formulation
  2. Strategic Implementation
  3. Strategic Evaluation
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10
Q

What is the process of strategic formulation?

A
  • Develop vision and mission statements
  • Internal environmental analysis
  • External environmental analysis
  • Objectives
  • Generate and choose strategies
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11
Q

What are the types of opportunities and threats in the external environment?

A
  • Economic
  • Trends and events
  • Technology
  • Political, government, and legal
  • Social, cultural, and environmental
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12
Q

What is PESTEL?

A

External factor assessment:
- Political
- Economic
- Social
- Technological
- Environmental
- Legal

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13
Q

What are the external and internal parts of a SWOT analysis?

A

Internal:
- Strengths
- Weaknesses
External:
- Opportunities
- Threats

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14
Q

What are Porter’s 5 forces?

A
  • Bargaining power of Suppliers
  • Bargaining power of Buyers
  • Threat of Substitutes
  • Threat of New Entrants
  • Industry Rivalry
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15
Q

What is zero-sum competition?

A

The market is finite, and whatever one company gains another must lose.

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16
Q

What is positive-sum competition?

A

The market is able to be expanded, and so increasing numbers of firms can service different parts of the market, expanding the market as they forge their unique path.

17
Q

What are the two forms of competition or industry rivalry?

A
  • Price competition
  • Non-price competition
18
Q

What are forms of non-price competition?

A
  • advertising
  • customer service
  • warranties
  • quality
19
Q

When does price competition intensify?

A
  • many sellers
  • some firms have a cost advantage
  • industry has excess capacity
  • undifferentiated products
  • low switching costs
  • prices and terms of sale not easily observable
20
Q

What are the two forms of barriers to entry?

A
  • exogenous (nature of the industry)
  • endogenous (incumbent’s strategic choices)
21
Q

Game theory and predatory pricing are examples of what kind of barrier to entry?

A

Endogenous

22
Q

What are the kinds of exogenous barriers to entry?

A
  • Economies of scale
  • Network effects
  • Switching costs
  • Incumbent advantage
  • Capital requirements
  • Access to distribution channels
23
Q

What are the main reasons for buyers having market power?

A
  • customer concentration
  • switching costs
  • threat of backwards integration
  • undifferentiated products
  • substitutes
24
Q

What affects the bargaining power of suppliers?

A
  • supplier concentration
  • industry switching costs
  • threat of forwards integration
  • few substitute inputs
  • differentiated product
  • low dependence on the industry
  • size/frequency of orders
25
Q

How to cope with the five forces in general:

A
  • develop a cost or differentiation advantage
  • seek industry segment where 5 forces are weaker
  • create switching costs (industry rivalry)
  • entry-deterring strategies
  • tapered integration (buyer/ supplier power)
26
Q

What are the four main aspects of strategy implementation?

A
  • budgeting
  • talent sourcing
  • align policies and procedures with strategy
  • internal information and communication
  • culture
27
Q

How do we see competitive advantage?

A

Superior economic performance

28
Q

How do we measure competitive advantage?

A

Accounting:
- ROA
- ROSales
- ROEquity
Economic:
- Capital budgeting/ NPV
- Opportunity cost

29
Q

What are the components of a balanced scorecard?

A
  • Financial
  • Customer
  • Internal Business Processes
  • Learning and Growth
  • Vision and Strategy

AREC 684 (6 decks)

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