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Strategy and Organisation - UvA > Week 1 > Flashcards

Week 1 Flashcards

1
Q

Definition: Strategy

A

We define strategy as an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.

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2
Q

How is strategic competitiveness achieved?

A

Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy

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3
Q

What’s the goal of a strategy

A
  • Receive above-average returns
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4
Q

What are the 4 parts of the Strategic management process?

A
  • Part 1: Strategic inputs
  • Part 2: Formulation
  • Part 3: Implementation
  • Part 4: Performance
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5
Q

What are strategic inputs (part 1) composed of?

A
  • Strategic management and strategic competitiveness
  • The external environment
  • The internal organisation
  • The integration of internal and external resources
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6
Q

What is the Formulation (part 2) composed of?

A
  • Business-level strategy
  • Competitive rivalry and competitive dynamics
  • corporate-level strategy
  • strategic acquisition and restructuring
  • international strategy
  • cooperative strategy
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7
Q

What is the Implementation (part 3) composed of?

A
  • Strategic leadership
  • Corporate governance
  • Organisational structure and controls
  • Strategic entrepreneurship
  • Strategic renewal
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8
Q

What is the Performance (part 4) composed of?

A

Competitive advantage in above-average returns

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9
Q

A firm’s __________ demonstrates how it differs from its competitors.

A

strategy

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10
Q

When does a firm have a competitive advantage

A

A firm has a competitive advantage when it implements a strategy that competitors are unable to duplicate or find too costly to try to imitate.

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11
Q

How can an organisation be confident that its strategy has resulted in one or more useful competitive advantages?

A

A firm can only be confident when:

  • Only after competitors’ efforts to duplicate its strategy have ceased or failed.
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12
Q

Is a competitive advantage permanent.

A

No, the speed with which the competitors will find skills to try to imitate this is the time for the advantage to last.

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13
Q

Definition: Above-average returns

A

Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

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14
Q

Definition: Risk

A

Risk is an investor’s uncertainty about the economic gains or losses that will result from a particular investment.

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15
Q

How are returns measured?

A

The returns are often measured in terms of accounting figures.

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16
Q

Firms without a comp advantage or that are not competing in an attractive industry earn…

A

…average returns

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17
Q

Definition: Average returns

A

Average returns are returns equal to those an investor expects to ear from other investments with similar amount of risk.

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18
Q

Definition of the strategic management process:

A

The strategic management process is the full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns.

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19
Q

Analyzing its external environment and internal organisation to determine..

A

..its resources, capabilities, and core competencies is the first step the firm takes in the strategic management process.

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20
Q

How is the competitive landscape growing bigger?

A
  • The boundaries of an industry become challenging
  • Conventional sources of CompAdv (Economies of scale and huge advertising budgets) are not as effective as they once were
  • The traditional managerial mindset is unlikely to lead a firm to strategic competitiveness ( due to changing conditions)
  • Under the conditions of hypercompetition, assumptions of market stability are replaced by notions of inherent instability and change.
    > Emergence of a global economy and
    technology are two primary drivers of
    hypercompetitive environments.
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21
Q

Definition: Hypercompetition

A

Hypercompetition is a term often used to capture the realities of the competitive landscape

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22
Q

Definition: Global economy

A

A global economy is one in which goods, services, people, skills and ideas move freely across political borders

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23
Q

Definition: Globalisation

A

Globalization is the increasing economic interdependence among countries and their organisations as reflected in the flow of goods and services, financial capital, and knowledge accross country borders

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24
Q

Globalization is a product of a…

A

…large number of firms competing against one another in an increasing number of global economies

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25
Q

Globalization increased the range of opportunities for..

A

..companies competing in the current competitive landscape

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26
Q

Name the two categories of Technology and technological changes:

A
  • Technology diffusion
  • Disruptive technologies
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27
Q

Define Technology diffusion

A

Technology diffusion is the rate at which new technologies become available and are used

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28
Q

Define Disruptive technologies

A

Disruptive technologies can destroy the value of existing technology and create new markets

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29
Q

Define Perpetual innovation

A

Perpetual innovation is a term used to describe how rapidly and consistently new information-intensive technologies replace older ones

30
Q

When products become somewhat indistinguishable because of the widespread and rapid diffusion of technologies, speed to the market with ____________ products may be the primary source of __________.

A
  • innovative
  • competitive advantages
31
Q

Information technology advances have given small firms more flexibility in competing with large firms, if…

A

…that technology can be used with efficiency!

32
Q

Give an example of a technological innovation contributing to hyper-competition:

A

The internet

33
Q

Knowledge is gained through..

A

.. experience, observation, and inference

34
Q

Is knowledge an intangible or tangible resource?

A

Knowledge is an intangible resource

35
Q

Define strategic flexibility

A

A set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment.

36
Q

Define the I/O model of above-average returns

A

The I/O model of above-average returns explains the external environment’s dominant influence on a firm’s strategic actions.

37
Q

According to the I/O model, the firm’s performance is believed to be determined primarily by?

A

A range of industrial properties, including economies of scale, barriers to market entry, diversification, product differentiation and the degree of concentration of firms in the industry.

38
Q

The I/O model has four underlying assumptions. Name them.

A
  1. The external environment is assumed to impose pressures and constraints that determine the strategies that would result in above-average returns.
  2. Most firms competing within an industry or within a segment of that industry are assumed to control similar strategically relevant resources and to pursue similar strategies in light of those resources.
  3. Resources used to implement strategies are assumed to be highly mobile across firms, so any resource differences that might develop between firms will be short-lived.
  4. Organisational decision-makers are assumed to be rational and committed to acting in the firm’s best interests, as shown by their profit maximizing behaviours.
39
Q

Define the resource-based model

A

The resource-based model assumes that each organisation is a collection of unique resources and capabilities.

40
Q

Define resources

A

Resources are inputs into a firm’s production process, such as capital equipment, the skills of individual employees, patents, finances and talented managers.

41
Q

Define capabilities

A

A capability is the capacity for a set of resources to perform a task or an activity in an integrative manner.

42
Q

Define core competencies

A

Core competencies are resources and capabilities that serve as a source of competitive advantage for a firm over its rivals.

43
Q

According to the resource-based model, why do differences in performances across time occur?

A

Differences in performances across time occur primarily because of firms’ unique resources and capabilities rather than because of the industry’s characteristics.

44
Q

When does a firm’s resources and capabilities have the potential to be the foundation of competitive advantage?

A

This potential is realised when resources and capabilities are valuable, rare, costly to imitate and nonsubsitutable (VRIN)

45
Q

Explain when a R/C is valuable

A

When they allow firm to take advantage of opportunities or neutralize threats in its external environment

46
Q

Explain when a R/C is rare

A

When possessed by few, current and potential competitors

47
Q

Explain when a R/C is costly to imitate

A

When other firms either cannot obtain them or are at a cost disadvantage in obtaining them compared with the firm that already possesses them.

48
Q

Explain when a R/C is nonsubsitutable

A

When they have no structural equivalents.

49
Q

How does the I/O model and the RB complement each other?

A

They complement each other in that one focuses outside of the firm (I/O) while the other focuses inside the firm (RB)

50
Q

Define Stakeholders

A

Stakeholders are the individuals and groups who can affect the firm’s vision and mission, are affected by the strategic outcomes the firm achieves through its operations, and who have enforceable claims on the firm’s performance.

51
Q

Name the 3 groups that stakeholders can be divided into:

A
  • Capital market stakeholders (shareholders and the major suppliers of a firms capital)
  • Product market stakeholders (primary customers, suppliers and host communities)
  • Organisational stakeholders (employees, managers, nonmanagers)
52
Q

Define Strategic leaders

A

Strategic leaders are people located in different parts of the firm using the strategic management process to help the firm reach its vision and mission. Helping the stakeholders.

53
Q

Define organisational culture

A

Organisational culture refers to the complex set of ideologies, symbols and core values that are shared throughout the firm and that influence how the firm conducts business.

54
Q

Define profit pool

A

A profit pool entails the total profits earned in an industry at all point along the value chain.

55
Q

Name the four steps to identify profit pools:

A
  1. Define the pool’s boundaries
  2. Estimate the pool’s overall size
  3. Estimate the size of the value-chain activity in the pool
  4. Reconcile the calculations
56
Q

The external environment is built up in two environments. Name them.

A
  • Industry environment
  • Competitor environment
57
Q

Name the dimensions of which the global environment is composed of.

A
  • Demographic segment
  • Economic segment
  • Political/ Legal segment
  • Sociocultural segment
  • Technological segment
  • Global segment
  • Physical Environment segment
58
Q

Define the industry environment

A

The industry environment is the set of factors that directly influences a firm and its competitive actions and competitive responses

59
Q

Define opportunity (in context of studying the general environment)

A

An opportunity is a condition in the general environment that, if exploited, helps a company achieve strategic competitiveness.

60
Q

Define threats (in context of studying the general environment)

A

A threat is a condition in the general environment that may hinder a company’s efforts to achieve strategic competitiveness.

61
Q

How do you analyze the external environment?

A

Scanning, monitoring, forecasting, and assessing

62
Q

Define an industry

A

An industry is a group of firms producing products that are close substitutes.

63
Q

Name Porter’s Five Forces:

A
  • Threat of new entrants
  • Bargaining power of suppliers
  • Bargaining power of buyers
  • Threat of substitute products
  • Rivalry among competing firms
64
Q

Define Strategic groups

A

A set of firms that emphasise similar strategic dimensions and use a similar strategy is called a strategic group.

65
Q

Define competitor analysis

A

Competitor analysis focuses on each company against which a firm directly competes.

66
Q

In a competitor analysis, the firm seeks to understand the following:

A
  • What drives the competitor, as shown by its future objectives?
  • What the competitor is doing and can do, as revealed by its current strategy
  • What the competitor believes about the industry, as shown by its assumptions
  • What the competitor’s capabilities are, as shown by its strengths and weaknesses
67
Q

In short, what are the components of a competitor analysis?

A
  • Future objectives
  • Current strategy
  • Assumptions
  • Capabilities
68
Q

Define Competitor intelligence

A

Competitor intelligence is the set of data and information the firm gathers to better understand and better anticipate competitor’s gain objectives, strategies, assumptions and capabilities.

69
Q

Define Complementors

A

Complementors are companies or networks of companies that sell complementary goods or services that are compatible with the focal firm’s good or service.

70
Q

What do Complementors analyze?

A

They analyse each others actions in that those actions might either help each firm gain a competitive advantage or damage each firms ability to exploit a competitive advantage

Strategy and Organisation - UvA (6 decks)

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