Tutorial 1 Flashcards
Triggering events that force companies to rethink their strategic orientation and engage in re definition of their strategy
Performance gap (unment performance expectations)
Changes in ownerships
New anticipated trends
Mergers acqs
Why have some companies lost superior performance and others excelled in the same environment / industry
They failed to adapt their strategy to a changing environment
They had to learn that past performance is no guarantee for future success
They have tried too heavily on intuitive thinking in their strategic decisions
Their strategic decision making was not based on data Analysis
Describe what is operational effectiveness
Operational effectiveness means performing similar activities better than rivals perform them
Includes effectiveness, reduce customer complaints, increase productivity, reduce lead times
Strategic positioning
Strategic positioning means performing different activities from rivals or performing similar activities in different ways
Unique customer value, estabilishing a unique position within a competitive arena through performing different activities than rivals do
Three important stakeholder categories a firm needs to consider in a strategic analysis
Organisational stakeholders: internal to the firm and include employees, managers; board members and stockholders
Economic stakeholders: external stakeholders such as customers, competitors and creditors
Societal stakeholders like external stakeholders like communities governments etc
What is the business case for sustainability and what are the drivers to integrate sustainability in strategic management
Business case for sustainability: to “realise economic success t tough an intelligent design of voluntary environmental and social activities
Drivers to integrate sustainability in strategic management:
Critical stakeholders
Companies identifying sustainability as a source for gaining competitive ads
Availability bias
Reliance and knowledge that is readily available in the mind rather than examining additional sources of info
Eg after your mates winning lottery you think you have a better likelihood of winning one
Shortly describe the 4 main performance measures a company can use to evaluate its strategy
Economic value: firm has a competitive ad when it creates and captures more economic value derived from was he customer value it generates
Accounting performance: prof ratios better than rivals
Shareholder value: greater earnings over cost of capital
Corporate sustainability; integrated economic, ecological and social performance is better than rivals
Multinational companies can follow two strategic approaches
Global standardisation and integration: achieving economies of scale, realising economics of scope; exploiting natural differences in cost and availability
Local responsiveness:
Presence of socio cultural differences, difference in national infrastructure, local competitive dynamics
Name the five typical organisational levels for which strategies are relevant
Corporate strategy: primarily choosing the gen direction of a company as a whole
Business strategy: concerned with how to position a company’s business units within their competitive arena
Functional strategy: the strategic approach of a functional area in the organisation to support achievement of corporate and business strategies
Regional and country strategy: how they vary in regions and countries
Product strategy or service strategy: design and structure of the marketing mix
Strategic decisions vs operational decisions
Strategic decisions: directION, long term,
Operational decisions: efficiency, short term
