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Strategic management > U1 > Flashcards

U1 Flashcards

1
Q

Developing a strategy is a company’s main priority, as it is a strategy that will act as?

A

a map for the future.

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2
Q

This course will demonstrate the significance of a corporate strategy and explore who is involved in developing it.

A
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3
Q

You will discover what information companies require to develop?

A

a strategy and how to generate this information.

Furthermore, you will gain insight into various models, analyses, and techniques that help in collating this data.

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4
Q

Using various case studies from different fields of practice, you will learn what foundations should be established in order to?

A

develop a strategy and what considerations influence the decision-making process.

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5
Q

Moreover, you will become more familiar with the international business environment and the strategic opportunities it offers companies. In addition, you will learn?

A

how strategies are evaluated and what is essential for the successful implementation of a strategy.

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6
Q

The recommended reading will add a further dimension to the concepts that constitute this course by introducing you to?

A

the most important authors and articles in the field of strategy.

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7
Q

Case Study
The German-based company Alfred is?

A

a medical equipment manufacturer.

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8
Q

The equipment Alfred manufactures consists of ?

A

various components.

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9
Q

One component is?

A

Alfred’s core technology for which Alfred is the market leader.

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10
Q

However, in order to make this core component applicable for medical treatment, it is necessary to?

A

integrate it with three additional components which are supplied by three different manufacturers from the USA, Italy, and Germany.

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11
Q

Alfred has been very happy with two of the suppliers, but there are continuous issues regarding?

A

the quality of components supplied by the US manufacturer.

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12
Q

Core technology

A

Core technology is a main techno­logy around which a product is developed.

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13
Q

A quality control check is carried out when?

A

the purchased components are supplied;

only if the components are supplied as specified does Alfred integrate them into their system.

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14
Q

The integration process is very complex, as all components have to be?

A

adjusted to provide a functional final product.

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15
Q

——————–provides a similar component to
————————————– supplier. However, Xion is neither a —————————-, not does it provide a product for the —————————————————————–.

A

Xion
Alfred’s US
supplier to Alfred

same market segment as Alfred.

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16
Q

Xion is?

A

two hours away from Alfred and faces bankruptcy.

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17
Q

Alfred’s management sees this as an opportunity and ?

A

buys Xion, with one of the goals being to replace the US supplier and integrate Xion’s component into all its systems.

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18
Q

After two years, a full integration of the Xion systems still has not been ———————–.Furthermore, the hospital market now requires additional ———————- systems.

A

carried out.

data management

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19
Q

Alfred has not developed any expertise in data management as their entire focus was on?

A

the integration of the acquired company Xion.

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20
Q

Alfred is forced to close Xion due to ?

A

the increased financial burden.

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21
Q

What happened?

A
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22
Q

What is a Corporate Strategy?
Corporate strategy?

A

A corporate strategy defines the future goals of an organization.

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23
Q

A corporate strategy is like a map that an organization draws in order to?

A

reach a specific goal in the future.

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24
Q

The strategy therefore shows the long-term direction of ?

A

the organization.

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25
Q

A strat­egic plan is never static as?

A

the environment and the markets are constantly changing.

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26
Q

A strat­egic plan is never static as the environment and the markets are constantly changing. This requires organizations to?

A

review strategic plans
and make adjustments
and changes in order to meet these new demands.

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27
Q

The three leading corporate strategists,
Alfred Chandler,
Michael Porter
and Henry Mintzberg,
define strategy as follows.

A

Alfred Chandler:
“Strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.”

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28
Q

Michael Porter:

A

Strategy is defined in relation to competition. “Strategy is the creation of a unique and valuable position, involving a different set of activities.” (Porter 1996, p. 1)

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29
Q

Henry Mintzberg:

A

Strategy is “a pattern in a stream of decisions.” (Mintzberg 2007, p. 3)

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30
Q

Resources

A

Resources are means that are available to an organization.

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31
Q

Alfred Chandler:
“Strategy can be defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.”

=====This means that if an organization starts producing one product or a product line and the demand for the product increases, the size of the organization and its complexity——————————–.

A

increases accordingly.

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32
Q

Eventually the structure of the organization will also have to change in line with?

A

the new strategic outlook.

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33
Q

If the structure of an organization is not adapted to its strategy, the organization will face ?

A

major problems.

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34
Q

Product line

A

A product line is a group of products with a similar purpose.

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35
Q

Michael Porter: Strategy is defined in relation to competition. “Strategy is the creation of a unique and valuable position, involving a different set of activities.”

Michael Porter takes a different view when it comes to?

A

defining the purpose of a corporate strategy.

It is not the long-term view itself that is important in a strategy, but the goal of developing a competitive advantage over time.

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36
Q

Competitive advantage

A

A competitive advantage provides the organization with a better position in the market compared to its competitors.

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37
Q

In Mintzberg’s view, it all starts with ?

A

a vision that is fully understood.

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38
Q

The decision patterns required to reach the vision constitute the corporate strategy. If the environment changes or an extraordinary opportunity arises and the envisioned goal becomes unattainable, the vision may need?’

A

adjusting.

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39
Q

Often, the more flexible and adaptable the corporate strategy, the better it is?

A

for the organization.

40
Q

An explicit strategy is ?

A

often too rigid and cannot be changed easily.

41
Q

it is necessary to keep a corporate strategy flexible and open to changes.

A

Such a strategy ties organizations psychologically to their pre-defined goals, even if these could lead to disadvantages.

42
Q

If we apply these definitions to our case study at the beginning of this chapter, we can see that Alfred did not adapt its structure to a new strategy.

A

On the contrary, it changed the corporate structure by acquiring Xion and then tried to develop a strategy out of this new situation.

43
Q

If we look at our example through the eyes of Michael Porter, Alfred did not develop a competitive advantage by?

A

investing in its core competency or by developing a competency in data management systems, which was a trend visible on the horizon.

44
Q

The company invested in a component that did not add any value for the customer, thus?

A

forgoing the opportunity of developing a competitive advantage in the long term.

45
Q

Many corporate decisions are made too fast, without a thorough analysis of all factors and scenarios available at the time. In order to?

A

develop successful strategies, companies need detailed information and adequate time to analyze it.

46
Q

A corporate strategy has many aspects. To develop a sound strategic plan, management needs to study and analyze all these aspects.

A

In the following chapters, you will learn various techniques that were developed to enable managers to take a closer look at various corporate issues and market developments in order to make better decisions for the future.

47
Q

What Has To Be Taken Into Consideration When Making Strategic Decisions?

When managers make strategic decisions they look at the:

A

==long-term orientation of the organization
==purpose of the organization
==attainment of a competitive advantage
==adaptability to change
==expandability of resources and the efficiency of the organization
==corporate philosophy
==expectations of stakeholders

48
Q

Corporate philosophy

A

The corporate philosophy defines the main principles by which an organization functions.

49
Q

It would be interesting to find out Alfred’s long-term orientation. Looking at the long-term vision might have?

A

answered the question about whether a vertical integration, in this case purchasing a component manufacturer, made sense and whether it was a good fit for the company strategy.

50
Q

A different option could have been to increase the pressure on the US supplier of the component to supply?

A

the component at a consistently higher quality.

51
Q

Vertical integration

A

Vertical integration means that a company acquires a supplier or a distributor.

52
Q

The purpose and the markets of the two companies, Alfred and Xion, were too different to ——————————. Both supplied products for ———————and private practices but they were serving very different ——————-and very different ———————.

A

integrate

hospitals
segments
customers

53
Q

Alfred’s competitive advantage is clearly its?

A

core technology, which made it the market leader in the company’s specific field.

54
Q

The additional components to this core technology did not add value for?

A

the customer in order for Alfred to gain a further share of the market.

55
Q

In this specific case, the changes in the market did not take place in the components that were acquired by ———————. The company should have looked at the entire environment and where —————————- were taking place, namely in ——————————-systems.

A

Alfred

new developments
data management

56
Q

The company invested in the wrong technology and therefore?

A

showed very little adaptability to change.

57
Q

Looking at the expandability of resources and the efficiency of the two organizations, there was little competence in?

A

either company that could bridge the two technologies or corporate cultures.

58
Q

The technical integration of the products from Alfred and Xion caused?

A

major problems as the systems are complex and the core competences of the two companies lay in two very different areas.

59
Q

Companies have very different cultures and philosophies; it is often difficult to?

A

integrate them in the event of an acquisition.

60
Q

In our case, this was part of the reason why the takeover———————.

A

failed.

61
Q

Alfred’s stakeholders favored the acquisition as?

A

it expanded the range of products;

however, they underestimated the integration problems.

Additionally, the distribution networks of both companies were different as they served varying market segments.

62
Q

There was no possibility of increasing efficiency by?

A

combining the distribution networks.

63
Q

A clear corporate strategic plan could have circumvented many of the problems faced by?

A

Alfred.

64
Q

Sound strategic decisions are based on ?

A

a solid strategic plan.

65
Q

Who Takes Part in Developing a Strategy?

Depending on the size of the organization, there are various levels of?

A

strategic development.

66
Q

These various levels all contribute to?

A

the strategic planning process.

67
Q

Figure 1: Strategic Levels

A
68
Q

Figure 1: Strategic Levels

A
69
Q

The upper level of strategic planning is?

A

the corporate level.

70
Q

Decisions regarding the overall purpose and the development of the organization are made at ?

A

this level.

71
Q

This level defines the vision and the mission, as well as?

A

the purpose of the organization.

72
Q

The corporate level analyses the strategic business units (SBUs) in terms of their growth potential in the future and decisions are made accordingly regarding?

A

the budgets for the SBUs

73
Q

The more promising SBUs are allocated larger budgets, and thus?

A

receive greater financial support.

74
Q

Strategic business unit

A

A strategic business unit is a unit of a business that could act independently of the other units in the market place.

75
Q

The SBUs look at the threats (risks) and opportunities in?

A

their respective business environments.

They also analyze the strengths and weaknesses of their own resources and contribute competitive analyses to the strategic plan.

76
Q

The marketing plans are developed at the product level. These include:

A

situation analyses,

the marketing strategy and business plans for the respective products.

They also define the mechanisms required to implement these plans.

77
Q

All managers at each level, from top to bottom, need to be familiar with the strategic planning process?

A

because all levels are involved in the strategic planning process.

78
Q

Strategic plans are either developed internally by ?

A

the organization itself or coached and managed by external consultants.

79
Q

What is Included in a Solid Strategic Plan?

To develop a solid strategic plan, an organization has to answer important questions regarding?

A

their position in the market and their strategic resources and possibilities as well as how to implement the strategy.

80
Q

Strategic planning is a long-term process as it takes time to?

A

assemble all the information required in order to develop a solid overall strategy.

81
Q

The strategic position of the company in the market place

In order to understand the strategic position in its entirety, it is important to analyze:

A

==the strengths and weaknesses of your organization

82
Q
A

==the opportunities and threats present in the business environment

==the influence of the corporate strategy on the environment and the corporate culture

83
Q
A

==whether the existing resources can sufficiently support the strategic goals of the organization

==whether the strategic plan fits the purpose (mission) of the organization

84
Q

The strategic capabilities

In order to understand the availability of the strategic resources, it is important to analyze:

A

==whether the portfolio of the business units fits well with the strategic objectives

==whether the business units are adequately positioned in the market place to support the strategy

85
Q
A

==the international markets in which the organization aims to operate

==what strategic alliances should be formed

==whether the organization is active in the right areas of innovation

86
Q

The implementation

In planning the implementation of the strategic plan, it is important to analyze:

A

==what process is necessary to develop a strategy

==what strategy is a good fit for the organization and what is feasible

==what corporate structure and systems in the organization are necessary to implement the strategic plan

87
Q
A

==how best to manage the implementation process

==how to evaluate the strategy
who is responsible for the implementation process

88
Q

The strategic plan can be compared to a road map that an organization draws up in order to?

A

reach its strategic goals.

89
Q

The strategic goals show where the organization wants to be in ?

A

the near future.

90
Q

Three leading business strategists,
Chandler,
Porter,
and Mintzberg,
look at strategy from different perspectives;

A

for Chandler, it is important that the structure of the organization fits its strategy while Porter looks

91
Q
A

at strategy in comparison to the organization’s competitors and Mintzberg sees strategy as a dynamic process.

92
Q

Many different factors influence the strategic outlook of an organization. Therefore, the managers of any organization need to be?

A

familiar with the organization itself and the markets in

93
Q
A

which the organization operates in order to make sound strategic decisions.

94
Q

All levels of an organization participate in the strategic planning process:

A

the corporate level defines the mission and vision of the organization,

95
Q
A

the strategic business units evaluate the strengths and weaknesses of the organization and the opportunities and threats in its environment, and the product management level draws up the marketing plans for the products.

96
Q

A solid strategic planning process requires an analysis of ?

A

the company’s position in the market place, an evaluation of its strategic capabilities, and a detailed implementation plan.

Strategic management (8 decks)

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