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STMG191 Ch. 9

Strategy & Competitive advantage

QuestionAnswer
What does a competitive advantage do? Allows an organization to deal with markets and environmental forces better than its competitors
What is 'sustainability'? The use of resources to satisfy the needs of the present without compromising the ability of future generations to provide for themselves
What are four ways that activities can be sustainable? 1. Extend the productive life of organizations and maintain high levels of performance; 2. improve level of welfare for present and future generations; 3. Enhance society's ability to solve major problems; 4. Enhance planet's biosphere and protect species
What is the 'quadruple bottom line' composed of? Longterm maintenance of environmental, social, cultural, and economic systems
What is a 'strategy'? A pattern in a stream of organizational decisions
What does 'strategic intent' do? Focuses and applies organizational energies on a unifying and compelling goal
What is 'strategic management'? The process of formulating and implementing strategies
What is special about 'above average returns'? They exceed what could be earned from alternative investments of equivalent risk
What does a monopoly environment look like? There is only one organization and no competition
What does an oligopoly environment look like? A small number of competitors feel themselves constrained more by the actions of their rivals than by those of their customers
There is only one organization and no competition - what environment? Monopoly
A small number of competitors feel themselves constrained more by the actions of their rivals than by those of their customers - what environment? Oligopoly
What is an environment of hypercompetition? Where there are at least several players who directly compete with one another
An environment where there are at least several players who directly compete with one another is what type of environment? Environment of hypercompetition
what is strategy formulation? The process of creating strategies
What is strategy implementation? The process of putting strategies into action
What are five questions that Peter Drucker associates with Strategy Formulation? What is our business mission? Who are our customers? What do our customers consider value? What have been our results? What is our plan?
What is mission of a company? The organization's reason for existence in society
Who are stakeholders? Individuals, groups, and institutions directly affected by an organization's performance
What is organizational culture? The system of shared beliefs and values that develops within an organization and guides the behavior of its members
What do 'operational objectives' do? Direct activities toward specific performance results
What are eight examples of organizational objective aspects? Profitability, market share, human talent, financial health, cost efficiency, product quality, innovation, social responsibility
What does a SWOT analysis do? Examines organizational strengths and weaknesses and environmental opportunities and threats
What examines organizational strengths and weaknesses and environmental opportunities and threats? SWOT analysis
What are 'core competencies'? Special strengths that give an organization a competitive advantage
What are macroenvironmental factors? Technology, government, social structures, population demographics, global economy, natural environment
What are industry environmental factors? Resource suppliers, competitors, and customers
What are the five definitive factors in industry structure in Porter's Five Forces? Industry competitors, new entrants, suppliers, customers, substitutes
What do Porter's Five Forces model focus on? Industry competition
What defines the industry competitors factor in PFF? The intensity of rivalry among firms in the industry
What defines the new entrants factor in PFF? The threat of new competitors entering the market
What defines the supplier factor in PFF? The bargaining power of suppliers
What defines the substitute factor in PFF? The threat of substitute products or services
In PFF, what does an 'attractive industry' look like? Less existing competitors, few threats of new entrants and substitutes, and low bargaining power among suppliers and buyers
In PFF, what does an 'unattractive industry' look like? Rivalry among competitors is intense, substantial threats exist in the form of possible new entrants and substitute products, high supplier and buyer bargaining power
What are the three levels of strategy used by organizations? Corporate strategy, business strategy, functional strategy
What does corporate strategy do? Sets the long-term direction of the enterprise
What does business strategy do? Identifies how a division or unit will compete in its product or service domain
What does functional strategy do? Guides activities within one specific area of operations
What is a 'strategic business unit' (SBU)? A major business area that operates with some autonomy
What do growth strategies involve? Expansion of organization's current operations
Growth through concentration occurs where? Within the same business area
Growth through diversification occurs how? By acquisition of or investment in new and different business areas
What are the two types of diversification? Related and unrelated diversification
What is related diversification? Involves growth by acquiring new businesses or entering business areas that are related to what the organization already does
What is unrelated diversification? Involves growth by acquiring businesses or entering business areas that are different from what the organization already does.
What is 'vertical integration'? Growth achieved through acquisition of suppliers or distributors
What is backwards vertical integration? Acquisition of suppliers
What is forwards vertical integration? Acquisition of distributors
What does a retrenchment strategy involve? Reducing the scale of current operations
What does restructuring involve? Changing the scale and/or mix of operations to gain efficiency and improve performance
What does downsizing do? Decreased the size of operations with the intention of becoming more streamlined
What does divestiture do? Sells of parts of the organization to focus attention and resources on core business areas
What happens in a strategic alliance? Organizations join together in partnership to pursue an area of mutual interest
What is one form of strategic alliance International joint ventures
What does an e-business strategy do? Strategically uses the internet to gain competitive advantage
What is a 'sustainable competitive advantage'? An advantage that exists through realizing cost and quality, knowledge and speed, creating a market stronghold and protecting financial resources
What are four opportunities for competitive advantage? Cost and quality, knowledge and speed, barriers to entry, financial resources
What opportunity for competitive advantage is driven by an emphasis on operating efficiency and/or product or service quality? Cost and quality
What opportunity for competitive advantage is driven by an emphasis on innovation and speed of delivery to market for new ideas? Knowledge and speed
What opportunity for competitive advantage is driven by an emphasis on creating a market stronghold that is protected from entry by others? Barriers to entry
What opportunity for competitive advantage is driven by an emphasis on investments and/or loss sustainment that competitors can't match? Financial resources
What model of strategy formulation answers the question "Is this an attractive industry for us to compete in?" Porter's Generic Strategies
According to Porter's Generic Strategy, business-level decisions are driven by what two basic factors? Market scope and source of competitive advantage
What is 'market scope' in Porter's Generic Strategy? How broad or narrow a market target is
What is the 'source of competitive advantage' in Porter's Generic Strategy? Whether competitive advantage is governed by lower price or product uniqueness
What is a Differentiation Strategy? A strategy that offers products that are unique and different from the competition
What is a Cost Leadership Strategy? A strategy that seeks to operate with lower costs than competitors
Differentiation strategy is a factor in which strategy model? Porter's Generic Strategy
Cost Leadership strategy is a factor in which strategy model? Porter's Generic Strategy
Focussed differentiation is a factor in which strategic model? Porter's Generic Strategy
Focussed cost leadership is a factor in which strategic model? Porter's Generic Strategy
What does 'focussed differentiation' offer to increase competitive advantage? A unique product to a special market segment
What does 'focussed cost leadership' offer to increase competitive advantage? The lowest cost of operations within a special market segment
What is a product life cycle? The series of stages a product or service goes through in the 'life' of its marketability
What are the five stages of a product life cycle? New product development, introduction, growth, maturity, decline
New product development, introduction, growth, maturity, and decline are all stages of what? The product life cycle
What is a portfolio planning approach? An approach that seeks the best mix of investments among alternative business opportunities
An approach that seeks the best mix of investments among alternative business opportunities is what? A portfolio planning approach
Who developed the BCG Matrix The Boston Consulting Group
What does the BCG Matrix do? Analyses business opportunities according to market growth rate and market share
What are the four business conditions according to the BCG Matrix? Stars, cash cows, question marks, and dogs
What is a 'dog' according to the BCG Matrix? Business with a low market share in a low growth market
What portfolio planning approach "Analyses business opportunities according to market growth rate and market share"? BCG Matrix
What is a 'star' according to the BCG Matrix? Business with a high market share in a high growth market
What is a 'question mark' according to the BCG Matrix? Business with a low market share in a high growth market
What is a 'cash cow' according to the BCG Matrix? Business with high market share in a low growth market
What portfolio planning approach "analyses business strength and industry attractiveness for strategy formulation"? General Electric (GE) Business Screen
The GE Business Screen does what? Analyses business strength and industry attractiveness for strategy formulation
The BCG Matrix does what? Analyses business opportunities according to market growth rate and market share
What are the five classifications for businesses in the GE Business Screen? Winners, question marks, average businesses, profit producers, losers
Who created the Adaptive Model of strategy formulation? Miles & Snow
What is the 'prospector' strategy in the Adaptive Model? Strategy that involves pursuing innovation and new opportunities in the face of risk with prospects for growth
What does the Adaptive Model suggest? That organizations should pursue product or market strategies congruent with their external environments
What is the 'defender' strategy in the Adaptive Model? Strategy where an organization avoids change by emphasizing existing products and current market share without seeking growth
What is the 'analyzer' strategy in the Adaptive Model? Strategy that seeks to maintain the stability of the core business while exploring selective opportunities for innovation and change
What is the 'reactor' strategy in the Adaptive Model? Strategy where organizations are mainly responding to competitive pressures in order to survive
What are the four strategies in Miles & Snow's Adaptive Model The prospector, defender, analyzer, and reactor strategies
Who established the process of incrementation? James B. Quinn
What is incrementation? Where modest and incremental changes in strategy occur as managers learn from experience and make adjustments
Who established emergent strategies? Mintzberg
What are emergent strategies? Strategies that develop over time as managers learn from and respond to experience
What are some common strategic planning pitfalls? Failures of substance, failures of process, lack of participation error
Define "failures of substance" in regard to strategy implementation? Inadequate attention to the major strategic planning elements
Define "failures of process" in regard to strategy implementation? Poor handling of the ways in which the various aspects of strategic planning were accomplished
Define "lack of participation error" in regard to strategy implementation? Failure to include key people in the strategic planning effort
What is 'corporate governance'? The system of control and performance monitoring of top management
Who are 'inside directors' in the context of corporate governance? Those chosen from the senior management of the organization
Who are 'outside directors' in the context of corporate governance? Those who are chosen from other organizations and positions external to the organization
What does strategic leadership strive to do? Enthuse people to continuously change, refine, and improve strategies and their implementation
What are the roles of a strategic leader? To be a; guardian of trade-offs; create a sense of urgency; make sure everyone understands the strategy; be a teacher; be a great communicator
Created by: ginamaye
 

 



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