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Ch. 3 strategic mgmt

QuestionAnswer
SWOT analysis consists of a careful listing of a firm's... Strengths, weaknesses, opportunities, and threats.
What are 4 limitations of SWOT analysis? Strengths may not lead to an advantage, SWOT's focus on the external environment is too narrow, SWOT gives a one-shot view of a moving target, and SWOT overemphasizes a single dimension of strategy.
What is a strategic analysis of an organization that uses value creating activities? value-chain analysis
what is the amount that buyers are willing to pay for what a firm provides them and is measured by total revenue? value
what is the key concept used in analyzing a firm's competitive position? creating value for buyers that exceeds the cost of production
The value-chain analysis has two different categories of activities...what are they? Primary and secondary activities
What contributes to the physical creation of the product or service, its sale and transfer to the buyer, and its service after the sale? The primary activities
What do the primary activities consist of? Inbound logistics, operations, outbound logistics, marketing and sales, and service
What are activities of the value chain that either add value by themselves or add value through important relationships with both primary activities and other support activities? secondary activities
What do the secondary activities consist of? procurement, technology development, humane resource management, and general administration
Which primary activity is associated with collecting, storing, and distributing the product or service to buyers? Outbound Logistics
Machining, packaging, assembly, testing, printing and facility operations are all associate with which primary activity? Operations
True or False. Inbound Logistics is associated with purchases of products and services by end users and the inducements used to get them to make purchases? False. Inbound Logistics is associated with receiving, storing, and distributing inputs to the product.
Service is associated with... providing service to enhance or maintain the value of the product.
advertising, promotion, sales force, quoting, channel selection are all examples of which primary activity? Marketing and Sales
What are some examples associated with Inbound Logistics? Location of distribution facilities; material and inventory control systems; systems to reduce time to send "returns" to suppliers; warehouse layout and designs;and just-in-time (JIT) inventory systems
What are some examples associated with Operations? Efficient plant operations; incorporation of appropriate process technology; quality production control systems; and efficient plant layout and workflow design.
What are some examples associated with Outbound Logistics? Effective shipping processes to provide quick delivery and minimize damages; efficient finished goods warehousing processes; shipping of goods in large lot sizes to minimize transportation costs; and quality material handling equipment
What are some examples associated with Marketing and Sales? Motivated and competent sales force; innovative approaches to promotion and advertising; selection of appropriate distribution channels; proper identification of customer segments and needs; effective pricing strategy
What are some examples associated with Service? Procedures to solicit feedback ; quick response to customer needs; ability to furnish replacement parts; effective mgmt of parts and equipment inventory; quality of service personnel and ongoing training; and warranty and guarantee polocies.
What does procurement refer to? It is the function of purchasing inputs used in the firm's value chain, not to the purchased inputs themselves.
Development of collaborative "win-win" relationships with suppliers is an example of what type of support activity? Procurement
Which support activity is related to a wide range of activities and those embodied in processes and equipment and the product itself? Technology Development
What are 3 examples associated with technology development? Effective R&D activities for process and product initiatives; state of the art facilities and equipment; ability to meet critical deadlines.
What support activity consists of activities involved in the recruiting, hiring, training, and compensation of all types of personnel? Human Resource Management
Human resource management deals with ______ and ___________ programs to motivate all employees; Quality relations with ______ unions; Quality work environment to __________ performance and _____________ absenteeism. Reward; incentive; trade; maximize; minimize
What is the definition of General Administration? General administration typically supports the entire value chain and not individual activities.
List some examples of general administration? Effective planning systems; ability to anticipate and act on key trends; ability to obtain low cost funds for capital expenditures; and excellent relationships with diverse stakeholder groups, etc
Although __________ ___________ is sometimes viewed only as overhead, it can be a powerful source of competitive advantage. General Administration
What are the two levels of relationships among value-chain activities? (1) Interrelationships among activities within the firm and (2) relationships among activities within the firm and with other organizations (e.g., customers and suppliers) that are part of the firm's expanded value chain.
What three activities do not only apply to manufacturing, but also services? inbound logistics, operations, and outbound logistics
What is the resource-based view of the firm? Perspective that firm's competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.
What are the two perspectives of a resource-based view of the firm? (1) The internal analysis of phenomena within a company. (2) An external analysis of the industry and its competitive environment.
This type of view is helpful in developing strategies for individual businesses and diversified firms by revealing how core competencies embedded in a firm can help it exploit new product and market opportunities. Resource-based view (RBV)
The three key types of resources that firms possess consist of? tangible resources, intangible resources, and organizational capabilities
____ _____ are all assets, capabilities, organizational processes, information, knowledge, and so forth, controlled by a firm that enable it to develop and implement value-creating strategies. Firm Resources
What are the 4 types of tangible resources? Financial, Physical, Technological, and Organizational
True or False. Tangible resources are difficult to identify and account for and are typically embedded in unique routines and practices? False. Intangible resources is the correct answer
Tangible resources are... organizational assets that are relatively easy to identify, including physical assets, financial resources, organizational resources, and technological resources.
What are financial resources? The firm's cash, accounts receivables, and its ability to borrow funds.
Physical resources are... the company's plant, equipment, and machinery as well as its proximity to customers and suppliers.
The company's strategic planning process and its employee development, evaluation, and reward systems are all examples of what type of tangible resource? Organizational resources
Technological resources consists of what? trade secrets, patents,and copyrights.
The second type of resources that firms posses include... Intangible resources
Intangible resources are much more difficult for competitors to account for or imitate. Intangible resources, which are.. typically embedded in unique routines and practices that have evolved and accumulated over time.
What are the three types of intangible resources? Human, Innovation and creativity, and Reputation
What are some examples of human resources? Experience and capability of employees, trust, effectiveness of work teams, and managerial skills
Technical and scientific expertise, ideas are all examples of what intangible resource? Innovation Resources
What are some examples of reputation resources? Brand name, reputation with suppliers for fairness and with customers for reliability and product quality.
A firm's ______ may also be a resource that provides competitive advantage. Culture
The term that refers to the competencies or skills that a firm employs to transform inputs into outputs. Organizational capabilities
Organizational capabilities combines _______ and __________ resources, using __________ processes to attain desired end. tangible; intangible; and organizational
What are some examples of organizational capabilities? Outstanding customer service, excellent product development capabilities, innovativeness of products and services, ability to hire, motivate, and retain human capital.
What are the four attributes that a resource must provide a firm with in order to have a sustainable competitive advantage? (1) The resource must be valuable, (2) It must be rare, (3)Difficult for competitors to imitate, (4) Must have no strategically equivalent substitutes.
When are resources considered valuable? When they enable a firm to formulate and implement strategies that improve its efficiency or effectiveness. Neutralize threats or exploit opportunities.
When are resources considered to be rare? When the resource is uncommon-rare relative to other competitors.
Inimitability Difficult in imitating
Can the resource be imitated easily? Inimitability key to value creation because it constrains competition.
What are the 4 sources of inimitability? Physical Uniqueness, Path Dependency, Causal ambiguity; and Social complexity.
Physical Uniqueness Inherently difficult to copy. Ex. A beautiful resort location.
Path dependency A characteristic of resources that is developed and/or accumulated through a unique series or events.
Causal Ambiguity A characteristic of a firm's resources that is costly to imitate because a competitor cannot determine what the resource is and/or how it can be re-created.
Social complexity A characteristic of a firm's resources that is costly to imitate because the social engineering required is beyond the capability of competitors, including interpersonal relations among managers, organizational culture, and reputation with suppliers and c
Substitutability can take at least two forms. (1) Substitute a similar resource that allows same strategy. (ex. top management; (2) very different resource can become strategic substitute. (ex. Amazon uses internet as substitute for brick and mortar locations.)
What are the four factors that help explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate? Employee bargaining power, Employee replacement cost, Employee exit costs, and manager bargaining power.
Employee Bargaining Power If employees are vital to forming a firm's unique capability, they will earn disproprtionately high wages
Employee Replacement Costs If employee's skills are idiosyncratic and rare, they should have high bargaining power based on the high cost required by the firm to replace them.
Employee Exit Costs May tend to reduce an employee's bargaining power. An individual may face high personal costs when leaving the organization.
Manager Bargaining Power Manager's power is based on how well they create resource-based advantages. Organizing, coordinating, and leveraging employees.
What are the two approaches to use when evaluating a firm's performance? (1) Financial ratio analysis; (2) Stakeholder perspective
Financial ratio analysis How a firm is performing according to its balance sheet, income statement, historical comparison, comparison with industry norms and key competitors.
What are the five different types of financial ratios? Short-term solvency or liquidity, Long-term solvency measures, asset management, profitabilty, market value
What's the importance of evaluating a firm's financial performance over time? Historical comparisons is a means of evaluating trends.
Comparison with Industry Norms comparing your firm with other firms in the industry asseses relative performance
Comparison with key competitors Firms with similar strategies are members of a strategic group.
The balanced scorecard A method of evaluating a firm's performance using performance measures from the customer's, internal, innovation, and learning and financial perspectives.
What are 4 key perspectives associated with the balance scorecard? (1) How do customers see us? (cust perspective); (2) What must we excel at? (internal biz perspective); (3)Can we continue to improve and create value?; (4) How do we look to shareholders? (financial perspective)
What is the customer perspective in relation to the balance scorecard? How a company is performing from customer's perspective; Time, Quality, Performance and service, and Cost
What is the internal business perspective in relation to the balance scorecard? What must the firm do internally to meet customer's expectations. Processes, decisions, actions, coordination, and resources and capabilities
What is the innnovation and learning perspective in relation to the balance scorecard? Introduction of new products and services, greater value for customers, and increased operating efficiencies.
A firm's ability to improve, innovate, and learn is tied directly to its... value
What is the financial perspective in relation to the balance scorecard? Measures of financial performance indicate whether the company's strategy, implementation, and execution are indeed contributing to bottom-line improvement.
What are the potential limitations of the balanced scorecard? Lack of clear strategy, limited or ineffective executive sponsorship, too much emphasis on financial measures rather than non-financial measures, poor data on actual performance, inappropriate links to scorecard measures to compensation, inconsistent or i
Created by: kmpech