Strategic Management Exam 1

Front 1

5 elements of a good strategy

Back 1

Arena, Vehicle, Differentiators, Staging, and Economic logic

Front 2

Arenas

Back 2

Where will we be active?

Which product categories?

Which geographic areas?

Which core technologies?

Which value-creation stages?

Front 3

Vehicle

Back 3

How will we get there?

Internal development?

Joint Ventures?

Licensing/franchising?

Acquisitions?

Front 4

Differentiators

Back 4

How will we win?

Image?

Customization?

Price?

Styling?

Product reliability?

Front 5

Staging

Back 5

What will be our speed and sequence of moves?

Speed of expansion?

Sequence of initiatives?

Front 6

Economic Logic

Back 6

How will we obtain our returns?

Lowest cost through scale advantages?

Lowest cost through scope and replication advantages?

Premium prices due to unmatchable service?

Premium prices due to proprietary product features?

Front 7

Sustained competitive advantage

Back 7

When an attractively large number of buyers develop a durable preference for its products or services over the offerings of competitors, despite the efforts of competitors to overcome or erode its advantage.

Front 8

Strategy

Back 8

Explains why the company matters in the marketplace by specifying an approach to creating superior value for customers and determining how capabilities and resources will be utilized to deliver the desired value to customers.

Front 9

5 different competitive strategies

Back 9

1. Deliberate Strategy

2. Emergent Strategy

3. Abandon Strategy

4. Realized Strategy

5. Sustained Competitive Advantage

Front 10

Deliberate Strategy

Back 10

What we set out to do? What we intend to do?

Front 11

Emergent Strategy

Back 11

Unintended strategy. Emerges

Front 12

Abandoned Strategy

Back 12

Strategy that is left behind abandoned

Front 13

Realized Strategy

Back 13

Combination of deliberate planned elements and unplanned, emergent elements. Some components of a company's deliberate strategy will fail in the marketplace and become abandoned. Present current strategy

Front 14

Sustained Competitive Advantage Strategy

Back 14

Advantage that allows a business to be more successful than its competitors over a long period of time. Companies now recognize that good human resources are as important as products in building a sustainable competitive advantage.

Front 15

Business model

Back 15

Sets forth how its strategy and operating approaches will create value for customers, while at the same time generate ample revenues to cover costs and realize a profit. 2 elements 1.)customer value proposition and 2.)its profit formula

Front 16

3 Test of a winning strategy

Back 16

1. How well does the strategy fit the company's situation?

2. Is the strategy helping the company achieve a sustainable competitive advantage?

3. Is the strategy producing good company performance? 1. Gains in profitability and financial strength and 2. advances in the companys competitive strength in market standing.

Front 17

5 competitive strategies

Back 17

1. Low-cost provider strategy

2. Broad differentiation strategy

3. Focused low-cost strategy

4. Focused differentiation strategy

5. Best-cost provider strategy

Front 18

Vision Statement

Back 18

"where we are going?" the course and direction management has charted and the company's future product-customer-market-technology focus

Front 19

What makes a good vision statement?

Back 19

Graphic paints a picture of the kind of a company that management is trying to create.

Directional- is forward looking

Focused-Is specific enough to provide managers with guidance making decisions and allocating resources.

Flexible-Adjust to changing circumstances

Feasible-Is within realm of what the company can reasonable expect to achieve.

Desirable-Indicates what directional path makes good business sense.

Easy to commuicate

Front 20

Why a well communicated vision statement matters?

Back 20

1. Crystalizes sr. executives own views about the firm's long-term direction

2. Reduces the risk of rudderless decision making by management

3. It is a tool for winning the support the employees to help make the vision a reality.

4. Provides a beacon for lower-level managers in forming departmental missions.

5. Helps an organization prepare for the future.

Front 21

Mission Statement

Back 21

Describes its present business and purpose "who we are, what we do, and why we are here"

Front 22

Values

Back 22

The beliefs, traits, and behavioral norms that a company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission

Front 23

Strategic Objectives

Back 23

Relate to target outcomes that indicate a company is strengthening its market standing, competitive vitality, and future business prospects

Front 24

Financial Objectives

Back 24

Relate to the target outcomes that indicate a company is strengthening its market standing, competitive vitality, and future business prospects.

Lagging indicators of past performance

Front 25

Board of director obligations

Back 25

1. Oversee the company's financial accounting and financial reporting practices.

2. Diligently critique and oversee the company's direction, strategy, and business approaches.

3. Evaluate the caliber of sr. executives' strategy formulation and strategy execution skills

4. Institute a compensation plan for top executives that rewards them for actions and results that serve shareholders interests.

Front 26

Strategic inflection point

Back 26

The time of transition of company's competitive position that requires the company change the current path and adapt to the new situation or risk declining profits.

Front 27

Macroenvironment

Back 27

The broad environmental context in which a company is situated and is comprised of 6 principal components: PESTEL

Political factors

Economic Conditions

Sociocultural forces

Technological factors

Environmental factors

Legal/regulatory conditions

Front 28

Political Factors

Back 28

Political policies and processes, including the extent to which a government intervenes in the economy. Ex. Tax policy, fiscal policy, bailouts

Front 29

Economic Conditions

Back 29

General economic climate and specific factors such as interest rates, exchange rates, inflation rate, unemployment rate, rate of economic growth.

Front 30

Sociocultural forces

Back 30

Societal values, attitudes, cultural factors and lifestyles that impact businesses, as well as demographic factors such as the population size, growth rate, and age distribution Example: trend toward healthier lifestyles, also healthcare services with age and money

Front 31

Environmental forces

Back 31

Ecological and environmental forces such as weather, climate, climate change, and associated factors like water shortages

Front 32

Legal and regulatory factors

Back 32

Regulation and laws with which companies must comply such as consumer laws, labor laws, antitrust laws, and occupational health and safety regulations

Front 33

5 forces model of competition

Back 33

1. Competitive pressures stemming from buyer bargaining power.

2. Competitive pressures coming from companies in other industries in other industries to win buyers over to substitute products.

3. Competitive pressures stemming from supplier bargaining power.

4. Competitive pressures associated with the threat of new entrants into the market.

5. Competitive pressures associated with rivalry among competing sellers to attract customers. This is usually the strongest of the five competitive forces.

Front 34

Driving forces of change

Back 34

Changes in an industry's long-term growth rate, increasing globalization, changes in who buys the product and how they use it, product innovation, marketing innovation, entry/exit major firms, changes in cost and efficiency, regulatory changes and goverment policy changes, changes in societal concern and attitudes and lifestyles

Front 35

Driving forces

Back 35

the major underlying causes of change in industry and competitive conditions

Front 36

Strategic group maps

Back 36

Closer grouping stronger competition not all positions are equally attractive

Front 37

Key Success Factors

Back 37

Strategy elements, product attributes, competitive capabilities, or intangible assets with the greatest impact on future success in the marketplace.

Front 38

VRIN Resources

Back 38

Test for sustainable competitive advantage ask if a resource or capability is

Valuable

Rare

Inimitable

Nonsubstitutable

Front 39

Competence

Back 39

Anything we do well internally

Front 40

Core Competence

Back 40

Anything we do well internally and we do it better than anything else.

Front 41

Distinctive Competence

Back 41

Anything we do well and better than the competitors.

Front 42

Two best indicators of how well a company's strategy is working?

Back 42

Are you achieving your stated financial and strategic objective?

Are you above the industry standard or performance?

Front 43

SWOT

Back 43

Simple but powerful tool for sizing up a company's internal strengths ad competitive deficiencies it's market opportunities and the external threats to its future well being.

Strengths

Weaknesses

Opportunities

Threats

Front 44

Benchmarking

Back 44

Potent tool for learning which companies are best at performing particular activities and then using their techniques to improve the cost and effectiveness of a company's own internal activities.

Front 45

Value Chain Analysis

Back 45

Identifies the primary activities that create customer value and related support activities.