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57 Cards in this Set
- Front
- Back
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best practice
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is a method of performing an acivity that has been shown to consistently deliver superior results compared to othr methods
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busines process regineering
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involves redically redesigning and streamlining how an activity is performed, with the intent of achieving dramatic improvements in performance
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Total quality management (TQM)
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entails creating a total quality culture bent on continously improving the performance of every task and value chain activity
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six sigma programs
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utilize advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes.
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high powered incentives
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finanical rewards taht are tied to specific outcomes
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New strategies often entail budget reallocations because
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units important in the prior strategy but having a lesser role in the new strategy may need downsizing while units and activities that now have a bigger and more critical strategic role may need increases in their budgets
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A useful guideline in designing strategy-facilitating policies and operating procedures is
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to prescribe enough policies to give organizational members clear direction in implementing strategy and to place desirable boundaries on their actions, then empower them to act within these boundaries however they think makes sense.
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A "best practice"
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is a technique for performing an activity or business process that at least one company has demonstrated works particularly
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Which one of the following is NOT a tool that company managers can use to promote operating excellence in performing value chain activities?
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Adoption of standard industry techniques
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Total quality management (TQM)
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is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations
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The Six Sigma process of define, measure, analyze, improve, and control (DMAIC) is
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an improvement system for existing processes falling below specification and needing incremental improvement
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Which one of the following statements about Six Sigma quality programs is TRUE?
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While Six Sigma programs often improve the efficiency of numerous operating processes, there is evidence that the approach can stifle innovative activities
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Installing well-conceived state-of-the-art support systems are an important managerial component of implementing and executing strategy because
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such support systems not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals).
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A motivation and incentive system that is aimed at spurring stronger employee commitment to good strategy execution
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should focus on incorporating more positive than negative motivational incentives
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Which of the following is NOT a sound guideline for designing a reward and incentive system that helps promote good strategy execution?
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Ways must be found to reward deserving non-performers who, for some reason, do not fare well under the incentive system
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The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves
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evaluating whether the diversification move will produce a 1 + 1 = 3 outcome such that the company’s different businesses perform better together than apart and the whole ends up being greater than the sum of the parts.
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An acquisition premium is the amount by which the price offered for an existing business exceeds
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the pre-acquisition market value of the target company
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Which of the following is an important appeal of a related diversification strategy
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Related diversification offers more competitive advantage potential than does unrelated diversification
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A company pursuing a related diversification strategy would likely address the issue of what additional industries/businesses to diversify into by
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identifying an attractive industry whose value chain has good strategic fit with one or more of the firm's present businesses
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Which of the following statements about cross-business strategic fit in a diversified enterprise is not accurate
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Strategic fit is primarily a byproduct of unrelated diversification and exists when the value chain activities of unrelated businesses possess economies of scope and good financial fit.
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In companies pursuing a strategy of unrelated diversification
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each business is on its own in trying to build a competitive edge and the consolidated performance of the businesses is likely to be no better than the sum of what the individual businesses could achieve if they were independent
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When industry attractiveness ratings are calculated for each of the industries a multi-business company has diversified into, the results help indicate
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which industries appear to be the best and worst ones to be in and the attractiveness of all the industries as a group from the standpoint of the company’s long-term performance
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Relative market share is
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calculated by dividing a business's percentage share of total industry sales volume by the percentage share held by its largest rival—it is a better indicator of a business's competitive strength than is a simple percentage measure of market share.
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Calculating quantitative competitive strength ratings for each of a diversified company’s business units involves
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selecting a set of competitive strength measures, weighting the importance of each measure, rating each business on each strength measure, multiplying the strength ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings for each business unit to obtain an overall competitive strength score, and using the overall competitive strength scores to evaluate the competitive strength of all the businesses, both individually and as a group
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The tests of whether a diversified company’s businesses exhibit resource fit do not include
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whether the corporate parent has sufficient cash to fund the needs of its individual businesses and pay dividends to shareholders without having to borrow money
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synergy
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creating added value for shareholders vis diversification requires building a multibusiness company where the whole is greater the the sum of its parts
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corporate venturing
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is the process of developing new businesses as an outgrowth of a company;s established business operations
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CAGR
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Compound annual growth rate
sqt(sqt(rev2011 / rev2007))-1 |
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transaction cost
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are the cost of completing a business agreement or deal of some sort, over and above the price of the deal.
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ROA
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return on assets
net income / total assets |
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related business
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possess competitively valuable cross-business value chain and resource match-ups
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ROE
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Return on Equity
net income / total equity |
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general resources and capabilites
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that can be widely applied and con be deployed across a broad range of industry and business types
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debt to aset ratio
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total debt / total assets
remember (total assets - total equity = total debt) |
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economies of scope
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are cost reductions that flow from operating in multiple businesses
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current ratio
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current assets / current liabilities
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economies of scale
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accrue from a larger size operation
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quick ratio
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acid test
(current assets-inventory) / current liabilities |
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restructuring
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refers to overhauling and streamlining the activities of a business
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days inventory
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inventory / COGS
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parenting advantage
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it is more able than other companies to boose the combined performance of its individual bussiness through high-level guidance, corporate-level contributions
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days receivable
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accounts receivable / (revenue / 365)
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resource fit
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businesses add to a company's overall resource strengths and have matching resource requirements
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age of payables
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accounts payable / (COGS/365)
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strong internal capital market
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allows a diversified company to add value by shifting capital from business units free cash flow to those needing additional capital to expand and realize their growth potential
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total asset turnover
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total revenue / total assets
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company wide restructuring
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involves divesting some businesses and acquiring others so as to put a shole new face on the company's business lineup
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Which one of the following is not a reason why a company decides to enter foreign markets?
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To gain economic incentives offered by governments of developing countries wishing to expand industry and job creation
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One of the biggest strategic challenges to competing in the international arena include
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whether to offer a mostly standardized product worldwide or to customize the offerings in each country
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The difference between political risks and economic risks is that
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political risks stem from instability or weakness in national governments while economic
risks stem from the stability of a country’s monetary system, economic and regulatory policies |
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Multidomestic competition is best characterized as a situation where
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there is no international or global market, just a collection of mostly self-contained country markets.
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Which of the following statements regarding global competition is false
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In global competition, there’s more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails.
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Using domestic plants as a production base for exporting goods to selected foreign country markets
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can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets
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The advantages of using a franchising strategy to pursue opportunities in foreign markets include
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having franchisees bear most of the costs and risks of establishing foreign
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Which of the following is not one of the problems and risks of strategic alliances between domestic and foreign firms
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Making it harder to pursue a multidomestic strategy as compared to a global strategy
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In expanding into foreign markets, a company can strive to gain competitive advantage (or offset domestic disadvantages) by
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dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation
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The essential difference between a “think global, act global” and a “think global, act local” approach to strategy-making is that
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the “think global, act local” approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions
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