Mgmt 301 - Exam 2

Front 1

components/managing of the macroenvironment

Back 1

1) social values - managing law and policies
2) law & politics - legislation and rules
3) demographics - affects target audience
4) technology
5) economy - interest rates

Front 2

components of the competitive environment

Back 2

1) substitutes - provides same function. ex) McDonalds vs Tavern
2) Rivals - (same market) but competition
3) suppliers - the companies
4) buyers - customers
5) new entrants - beware!

Front 3

Stakeholders

Back 3

groups and individuals who affect and are affected by the organization and its output
they make a contribution in return for inducement (see chart in notes pg 137)

Front 4

Strategies for Influencing the Environment (YOU influence)

Back 4

1) cooperative action
2) independent action
3) moving into a different environment

Front 5

Cooperative Action

Back 5

-a strategy for influencing the environment
- for managing the environment
1) contracting - legal agreement
2) cooptation - absorbing new elements into an organization to avert threat
3) coalition - 2 + orgs acting together for a common issue

Front 6

Independent Action

Back 6

a strategy for influencing the environment
1) competitive agression
2) competitive pacification - improve relation with competitors
3) public relations - establishing and maintaining a favorable mind in the stakeholders
4) voluntary actions - commitment to various causes
5) legal action - patent of infringement
6) political action - lobbying and pacts, manipulating passing of laws

Front 7

Moving to a Different Environment

Back 7

- a strategy for influencing the environment
1) domain selection - you select your market
2) diversification -investing in different businesses / products
3) mergers and acquisitions - combine 2+ entities (buying)
4) diversiture - sell 1 or more businesses or getting out of the business

Front 8

Environmental Attractiveness - "barriers to entry"

Back 8

1) competitors
2) substitutes
3) capital requirements
4) brand loyalty - cigarettes vs. bottled water
chart on angel!!!

Front 9

Strategic Management Process

Back 9

1) Establish mission
2) Analyze strengths and weaknesses AND analyze opportunities and threats
3) strategy formulation
4) strategy implementation

Front 10

SWOT Analysis

Back 10

Strengths, Weaknesses, Opportunities, Threats

SW - usually internal
OT - usually external

-it is a structured method for:
analyzing both internal and external environments
-basic decision making process

Front 11

Boston Consulting Group (BCG) Matrix

Back 11

pg 144

Front 12

Corporate Strategy Alternatives

Back 12

1) Concentration
2) Vertical Integration
3) Concentric Diversification Strategy
4) Conglomerate Diversification Strategy

Front 13

Concentration Strategy

Back 13

a corporate strategy alternative
- an organization operates a single business and competes in a single industry. ex: CVS or Rite Aid, Cannondale
advantage: allows company to focus on one product
disadv: # of products, who cares about the product

Front 14

Vertical Integration Strategy

Back 14

a corporate strategy alternative
- an organization enters one or more businesses that are necessary for manufacturing or distributing its own products
- oil company - own land, trucks, oil refineries, gas station (exxon mobil)

Front 15

Concentric Diversification Strategy

Back 15

- a corporate strategy alternative
- an organization adds new businesses that produce related products or are involved in related markets and activities
ex: Proctor and Gamble

Front 16

Conglomerate Diversification Strategy

Back 16

a corporate strategy alternative
- an organization adds new businesses that produce unrelated products or are involved in unrelated markets and activities
ex: GE

Front 17

Strategies for Managing the Political Environment

Back 17

1) lobbying - paid legal representation in government
2) PAC's - political action committees - put money together to support candidates
3) Strategic Retreat - costs > benefits
4) Coalition Building - joining with competitors for a common cause
5) Stonewaling - use PR to delay event/responsibility

Front 18

Spheres of Economics Influence

Back 18

- easier to trade
- countries interact and benefit from resources
1) WTO - World Trade Organization - Rules/Regs of trade. greater than 90% of international trade. 126 countries (oversees NAFTA, EU, APEC)
2) NAFTA - most money - mexico, US, canada
3) EU - cross border trade
4) APEC - Asian Pacific Economic Cooperation - more than 50% of the worlds goods manufactured from there

Front 19

1) Most populated countries

2) Countries with highest Gross National Income

Back 19

1) 1. China, 2. India, 3. US, 4. Indonesia, 5. Brazil, 6. Pakistan, 7. Bangladesh, 8. Russia, 9. Nigeria, 10. Japan

2) 1. USA, 2. Japan, 3. Germany, 4. England, 5. France, 6. Italy, 7. China, 8. Canada, 9. Brazil, 10. Spain

Front 20

Assessing International Market Attractiveness

Back 20

1) population
2) Total GNP
3) Per capita GNP
4) Economic Stability
5) legal system
6) geographic proximity
7) trade barriers
8) transportation
9) consumer behavior
10) competition
11) political stability
12) cultural access

additional conditions that would support rapid expansion into foreign markets
1) probability of loosing a technological advantage
2) time sensitive current advantage
3) opportunity to team with best partner

Front 21

4 "common" Organizational Models

Back 21

- Multinational
- international
- transnational
- global

see matrix on pg 183

Front 22

Worldwide Marketplace Strategy

Back 22

based on two decisions made by executives
- worldwide integration
- local responsiveness

Front 23

Global Model

Back 23

one of the 4 common organizational models
- views the world as a single market
-operations are centrally controlled
ex: Mcdonalds
- high pressure for global integration
-low pressure for local responsiveness
- successful

Front 24

Multinational Model

Back 24

one of the 4 common organization models
- several subsidiaries operating as stand-alone business units in multiple countries
-decentralized businesses operate on their own
- strategy on country by country basis
- autonomy - develop own strategies / discretion to respond locally
- ex: shell gas station
- low pressure for global integration, high pressure for local responsiveness
- successful

Front 25

International Model

Back 25

- uses existing capabilities to expand into foreign markets
- exploit techinical competence
- ex: Xerox
- low pressure for global integration
- low pressure for local responsiveness
- weakest of the four models

Front 26

transnational model

Back 26

- one of the 4 common organization models
- specialized facilities permit local responsiveness.
- complex coordination mechanisms provide global integration
- ex: Catepillar
- high pressure for global integration
- high pressure for local responsiveness
- most complex and difficult model

Front 27

Modes of Entry

Back 27

1) exporting
2) licensing
3) franchising
4) joint venture
5) wholly owned subsidiary

Front 28

Exporting

Back 28

a modes of entry
Pros:
- economics of scale - cost per unit decreases as more is produced
- control - color, quality
- consistent with pure Global Strategy

cons:
- tariff barriers
- transportation costs
- some products cannot be exported

Front 29

Licensing and Franchising
(product and service)

Back 29

- a mode of entry

pros:
- lower operating cost
- lower political risk

cons:
- loss of control
- threats to quality
- lower margins

Front 30

Joint Venture

Back 30

a mode of entry

pros:
- local knowledge
- shared cost and risk
- may be the only option

cons:
- potential conflict between parties
- political risk
- shared profits

Front 31

Wholly Owned Subsidiary

Back 31

a mode of entry

pros:
- control
- profits - greatest potential / gain

cons:
-costs
-risks - highest risk

ex: using own resources and setting up a Sharpie shop in India

Front 32

Worldwide Managers

Back 32

1) Host country Nationals - natives of the country where an overseas subsidiary is located (ex: India native running the overseas company from India)
2) expatriates - parent company nationals who are sent to work at a foreign subsidiary (ex: US native running the overseas company in India)
3) Third-country Nationals - natives of a company other than a home country or host country (ex: Africa native running the US business in Brazil)

Front 33

Hofstede's Dimensions of Cultural Difference

Back 33

1) power distance - the extent in which employees accept their supervisors have more power than they do
2) individualism / collectivism - the extent to which people act on their own or as part of a group
3) uncertainty avoidance - the extent to which a society feels threatened by uncertain environments. ex: sense of control of whats going to happen next
4) masculinity/femininity - the extent to which a society values quantity over quality. women - quality (how happy you are) , men - quantity (materialistic)

Front 34

Most significant cause of failure

culture

Back 34

lack of cultural awareness

knowledge, beliefs, values, behavior and ways of thinking about societal issues