Badm 449 Exam 2

Front 1

Porter's Five Forces

Back 1

Threat of new entrant, power of supplier, power of buyer, rivalry within industry, complements, threat of substitute

Front 2

VRIO(N)

Back 2

Valuable, rare, inimitable, organize to create value, nonsubstitutable

Front 3

How to compete for an advantage

Back 3

Cost leadership, differentiation, integration

Front 4

Account Profitability Limitations

Back 4

Backwards looking, do not consider off-balance sheet items, measure relative profitability, focus on tangible assets

Front 5

Balanced Scorecard Advantages

Back 5

Advantages- link strategic vision to responsible parties, vision into measurable operational goals, design and plan business processes, implement feedback and learning

Front 6

Balanced Scorecard Disadvantages

Back 6

Not for strategy formulation, limited guidance about which metrics to choose, failure achieving competitive advantage is not indicative of poor framework, managers must translate their strategy into objective that can be measure within this model

Front 7

CSR

Back 7

Corporate social responsibility

Front 8

MECE

Back 8

Mutually exclusive, collectively exhaustive

Front 9

Drivers of Uniqueness

Back 9

Product Features, customer service, complements, intensity of marketing activities, quality, skill, location, vertical integration, status

Front 10

Sources of Cost Leadership

Back 10

Locational differences in input prices, ownership of low-cost sources of supply, nonunion labor, bargaining power

Front 11

Corporate Strategy vs Business

Back 11

Where to compete vs how to compete

Front 12

Corporate Strategy

Back 12

Industry value chain, range of products and services, where to compete

Front 13

First corporate level strategy questions

Back 13

Make or buy?

Front 14

Strategic Alliance

Back 14

Facilitate investment without administrative costs

Strengthen competitive position, enter new markets, hedge against uncertainty, access critical complementary assets, learn new capabilities

Front 15

Vertical Integration

Back 15

Full vertical

Backward vertical

Forward vertical

Front 16

Vertical Integration Benefits

Back 16

Market power (entry barriers), securing critical supplies, lower costs

Front 17

Vertical integration Risks

Back 17

Increasing costs, reducing quality, reducing flexibility, increasing the potential for legal repercussions

Front 18

Diversification

Back 18

Degrees of diversification (range of products and services a firm should offer)

Strategies (product, geographic, product-market)

Front 19

Diversification must do ___ to enhance performance

Back 19

Economies of scale, economies of scope, reduce costs and increase value, financial economies

Front 20

Why diminishing returns?

Back 20

Dilution of dominant logic (over diversification can dilute, big picture blurred)

Control costs (IT costs to track and manage)

Front 21

PESTEL

Back 21

Political, economic, social, technological, environmental, legal

Front 22

Growth-Share Matrix

Back 22

Question market

Star

Cash Cow

Dog

Front 23

Horizontal Integration

Back 23

Merger or acquisition

Benefits- reduce competitive intensity, lower costs, increase differentiation, access to new markets

Costs- integration failure, reduce flexibility, increased potential for legal repercussions

Front 24

Types of strategic alliances

Back 24

Non-equity alliances (most common), equity alliances, joint ventures

Front 25

What is competitive advantage?

Back 25

Superior performance relative to other competitors in the same industry or the industry average

Front 26

Threat of entry determinants

Back 26

Economies of scale, network effects, switching costs, capital requirements

Front 27

Power of supplier determinants

Back 27

High switching costs, limited substitutes, suppliers' products are differentiated, concentrated industry

Front 28

Power of buyers determinants

Back 28

buyer concentration, buyer volume, switching costs, buyer information

Front 29

Threat of substitutes determinants

Back 29

Buyer switching cost is low, buyer has high propensity to substitute,

Front 30

Rivalry among existing competitors determinants

Back 30

Switching costs, concentration, brand identity, industry growth

Front 31

Strategic Group

Back 31

Set of firms pursuing a similar strategy within a specific industry

Front 32

Mobility Barriers

Back 32

Restricts movement between groups; industry-specific factors that separate one strategic group from another

Front 33

Why go global?

Back 33

Gain access to a larger market, low-cost input factors, develop new competencies

Front 34

Why not to go global?

Back 34

Liability of foreignness, loss of reputation, loss of intellectual property,

Front 35

CAGE

Back 35

Cultural distance

Administrative and political distance

Geographic distance

Economic distance

Front 36

Cost reduction

Back 36

intention to enter global market to reduce operation cost

Front 37

Local responsiveness

Back 37

Tailor products to fit local consumer preferences

Front 38

Global strategies

Back 38

International (Sell same in domestic and foreign)
multidomestic (max local responsiveness)
global standardization (economies of scale)
transnational (localization and global standardization)

Front 39

The innovation process

Back 39

Idea (abstract concept)

Invention (new product)

Innovation (commercialization)

Imitation (copying)

Front 40

Industry Life Cycle

Back 40

Introduction (tech enthusiasts)

Growth (early adopters)

Shakeout (Early majority)

Maturity (late majority)

Decline (Laggards)

Front 41

Network effects

Back 41

Externality (facebook)

Front 42

Crossing the Chasm

Back 42

Getting from early adopters to early majority

Front 43

Open Innovation

Back 43

R&D benefits from internal and external ideas

Sharing goes both ways

Front 44

Core Competencies

Back 44

Unique, deeply embedded, firm-specific strengths that allow differentiation of products of cost leadership

Front 45

Support activities

Back 45

Firm infrastructure
HR management
Technology development
Procurement

Front 46

Primary activities

Back 46

Inbound logisitics
Operations
Outbound logistics
Marketing and sales
Service

Front 47

SWOT Limitations

Back 47

Strength can be a weakness
Opportunity can be a threat

Front 48

First-Mover advantages

Back 48

Technological leadership

Preemption of scare assets

Switching costs and buyer uncertainty

Front 49

First-Mover disadvantages

Back 49

Free-rider effects

Resolution of technological or market uncertainty

shifts in technology or customer needs

Incumbent inertia

Front 50

NPV=

Back 50

-initial investment + (cash flow/1+discount rate)

Front 51

Real Options

Back 51

Cease or expand

Front 52

Total project value

Back 52

=NPV + Value of Real Options

Front 53

Common Real Options

Back 53

Abandon

Expand

Investment timing option

Production Flexibility