Management Quiz - Chapter 6

Front 1

Sustainable Competitive Advantage

Back 1

-competitive advantage that other companies have tried unsuccessfully to duplicate

Front 2

sustainable competitive advantage requirements (4 criterias)

Back 2

1. valuable resources: allows companies to improve efficiency and effectiveness (apples vast product lines)

2. rare resources: resources that are not controlled or possessed by many competing firms (apples ability to configure their resources into an elegant highly desired designs)

3. imperfectly imitable resources: resources that are impossible or extremely costly to duplicate (apples cloud design)

4. non-substitutable resources: no other resources can replace them and produce similar value or competitive advantage (apples itunes software VS spotifys market share i.e apple wins)

Front 3

SWOT analysis/window of opportunity

Back 3

-Strengths and Weaknesses="internal", thus you have control over

-Opportunities and Threats="external", thus you don't have control over

Front 4

choosing strategic alternatives (3)

Back 4

1. Risk-avoiding strategy: protect an existing competitive advantage

2. Risk-seeking strategy: extend or create a sustainable competitive advantage

3. Strategic Reference Points: targets used by managers to determine if the firm has developed the core competencies it needs to achieve a sustainable competitive advantage

Front 5

3 Levels of Strategy

Back 5

1. Corporate level strategies: "what business or businesses are we in, or should we be in?"

-what business are we in

-how should we compete in that industry

-who are our competitors, and how should we respond to them

2. Industry level strategies: addresses the question "how should we compete in the industry?"

3. Firm Level strategies: addresses the question "how should we compete against a particular firm?"

Front 6

BCG (boston consulting group) matrix

Back 6

"PORTFOLIO APPROACH"

-question marks: companies with small share of a fast growing market

-stars: companies with a large share of a fast growing market

-cash cows: companies with a large share of a slow growing market

-dogs: companies with a small share of a slow growing market

*look at matrix in powerpoint to further understand

Front 7

Grand Strategies

Back 7

1. growth strategy: focuses on increasing profits, revenues, market share, or number of places to do business

2. stability strategy: focuses on improving the way the company sells the same products or services to the same customers

3. retrenchment strategy: focuses on turning around a very poor company performance by shrinking the size or scope of the business

Front 8

Diversification and Risk Relationships

Back 8

-diversification: strategy for reducing risk by buying a variety of items (other businesses) so that the failure of one business doesn't affect the entire "portfolio"

-portfolio strategy: buying into various businesses or product lines

-acquisitions: buying more and more companies (more legs to the stool)

-unrelated diversification: creating or acquiring companies in completely unrelated businesses

Front 9

Porter's competitive strategies

Back 9

1. Focus: concentrate attention on a specific segment of an overall market (and choosing on being unique or cost effective)

2. Differentiation: attempt to develop goods or services that are perceived industrywide as being unique (if you are unique you have pricing power)

3. Cost Leadership: aggressively pursue operating efficiencies so that an organization is the low-cost producer in it's industry (Wal-Mart)

Front 10

Porters Competitive Forces

Back 10

1. Bargaining Power of Suppliers: influence that suppliers have on prices (few suppliers = more pricing power)

2. Bargaining Power of Buyers: buyers dictating what they are willing to pay (less buyers = more pricing power)

3. Threat Of Substitutes: other companies with similar products (more competitive = lesser amounts of pricing powers)

4. Threat of New Entrants: how easy or hard it is to enter into an industry

5. Character of Rivalry: rivalry between two firms in one industry (Coke Vs. Pepsi)

Front 11

Firm-Level strategies

Back 11

-market commonality: primary competitors (theaters)(both in the entertainment industry)

-resource similarity: how similar customer base is along with products (Wendys and McDanks) & and similar those resources they have

-attack: competitive move designed to reduce a rival's market share or profits

-response: competitive countermove, prompted by a rival's attack, that is designed to defend or improve a company's market share or profits

Front 12

Strategy Implementation

Back 12

1. Mirror your competitor's move

2. Respond along a different dimension from your competitors move or attack