MGMT 316 > Chapter 6 -Strategy > Flashcards

Chapter 6 -Strategy Flashcards

(44 cards)

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1
Q

Strategy

A

Comprehensive plan guiding resource allocation to achieve long-term organization goals

  • Focuses attention on the competitive environment
  • Represents the “best guess”
  • Helps achieve a competitive advantage
  • Very best ones provide a sustainable competitive advantage
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2
Q

Mission

A

The organization’s reason for existence in society

- Clear and lofty sense sense of purpose for why you exist

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3
Q

Strategic indent

A

Focuses organizational energies on achieving a compelling goal
- clear and lofty sense of where you’re going in the future

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4
Q

Strategy provides the plan for reaching a mission and strategic indent

A

TRUE

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5
Q

Competitive advantage

A

An ability to outperform rivals

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6
Q

Sustainable competitive advantage

A

The very best strategies help achieve this

- Achieved in ways that are difficult to imitate for some period

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7
Q

Corporate strategy

A

Sets long-term direction for the total enterprise

- Provides direction and guides resource allocation for the organization as a whole

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8
Q

Business strategy

A

Identifies how a division or strategic business unit will compete in its product or service domain

  • Focuses on strategic intent for a single business unit or product line
  • Includes decisions about product, service mix, facilities locations, new technologies
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9
Q

Functional strategy

A

Guides activities w/in one specific area of operations to implement higher-level business & corporation strategies
- W/in specific functional area (marketing, finance, HR, manufacturing)

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10
Q

What’s the strategic question for functional strategy?

A

How can we best utilize resources w/in the function to support implementation of the business strategy

A - Increase operating efficiency, product quality, customer service or innovativeness

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11
Q

What’s the strategic question for business strategy?

A

How are going to compete for customers w/in this industry & market?

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12
Q

What’s the strategic question for corporate strategy?

A

In what industries & markets should we compete?

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13
Q

Growth strategies

A

Involves expansion of the organization’s current operations

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14
Q

Growth by concentration strategies

A

Seeks expansion w/in an existing business area

- Ex. Chipotle grows more chipotle restaurants

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15
Q

Growth by diversification strategies

A

Expansions occurs by entering new business areas

  • Can be risky
  • Can be done thru related diversification: expanding into similar new business areas (ex. Pepsi buying Tropicana)
  • Or unrelated diversification: seeking growth in an entirely new business area (ex. Exxon owning Izod)
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16
Q

Growth by vertical integration strategies

A

Occurs by acquiring suppliers or distributors

  • Suppliers –> backward vertical integration (ex. Apple)
  • Distributors –> forward vertical integration (ex. Pepsi, Cola)
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17
Q

Retrenchment strategies

A

Changes operations to correct weaknesses by making radical changes

  • Usually when there’s too much growth or diversification
  • Most extreme form –> Liquidation
  • Less extreme –> Restructuring (downsizing and divestiture)
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18
Q

Divestiture

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A

Selling off parts of the organization to refocus attention on core business areas
- Type of restructuring and retrenchment

19
Q

Downsizing

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A

Decreases the size of operations and workforce

- Type of restructuring and retrenchment

20
Q

Globalization strategy

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A

Views the world as one large market

- Try to advertise and sell products worldwide

21
Q

Multi-domestic strategy

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A

Customizes products and advertising to fit local cultures and needs

22
Q

Transnational strategy

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A

Integrates global operations without having a strong national identity.

  • Taps business resources and customer markets worldwide
  • Hope to blend seamlessly into global economy
23
Q

Strategic alliances

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A

Organizations join together in partnership to pursue an area of mutual interest

  • Outsourcing alliances
  • Supplier alliances
  • Distribution alliances
  • Co-opetition
24
Q

Co-opetition

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A

Strategy of working with rivals on projects of mutual benefit.
“revolution mindset”

25
E-business strategy
Strategically uses the Internet (web, apps) to gain competitive advantage
26
B2C business strategy
Uses IT, Web, and Apps to link businesses with customers. Business-to-customer
27
B2B business strategy
Link businesses to members of their supply chains Business-to-business
28
C2B business strategy
Link customers to businesses that might provide the service/product the customer needs - Unlike B2C, C2B puts the initiative for for the transaction in the hands of the potential customer Customer-to-business
29
C2C business strategy
Link customers together to make business transactions - Host site collects a fee for the opportunity (ex. Etsy, Mercari) Customer-to-customer
30
P2P business strategies
link persons needing services with those willing to provide them. - Part of the sharing economy (ex. Uber, Airbnb) Peer-to-peer
31
What are the steps in the Strategic Management process?
1. Review existing mission, objectives, strategies 2. Analyze organizational strengths & weaknesses, and environmental threats and opportunities 3. Develop new strategies at corporate, business, and functional levels 4. Implement strategies (thru mgmt systems, practices, and strategic leadership) 5. Evaluate results through strategic control, and renewing strategic management process
32
What are Porter's five forces model of industry attractiveness?
Force 1: Competitors - intensity of rivalry among firms in the industry Force 2: New entrants - threats of new competitors entering the market Force 3: Suppliers - bargaining power of suppliers Force 4: Customers - bargaining power of buyers Force 5: Substitutes - threats of substitute products or services
33
Porter's competitive strategies model
- Competitive strategies can be built around differentiation, cost leadership, and focus
34
Porter's differentiation strategy
Seeks competitive advantage through uniqueness - Objective is to attract customers who stay loyal to the firm's products and lose interest in their competitors - Success depends on customer perceptions of product quality, and uniqueness. - Requires strong marketing, research & development
35
Porter's cost leadership strategy
Seeks competitive advantage by operating w/ lower costs than competitors - Allows org. to make profits while selling products or services at low prices, competitors can't match - Objective is to continuously improve operating efficiencies
36
Porter's focus strategy
Serve the needs of a narrow market segment better than everyone else - Focused differentiation strategy: offer a unique product in a special market segment - Focused cost strategy: tries to be the low-cost provider for a special market segment
37
What's the purpose and use of the BCG Matrix?
BCG matrix: analyzes business opportunities according to market growth rate and market share - Purpose --> Sorts businesses or products into 4 strategic types (dogs, stars, question marks, cash cows) and find the appropriate strategy to apply
38
Explain the responsibilities of strategic leadership?
Guardian of trade-offs --> make sure resources are allocated in ways consistent w/ the strategy Create a sense of urgency --> Keeps the focus on getting better and being alert to conditions that require adjustments to the strategy Make sure everyone understands the strategy --> Make sure efforts are aligned w/ strategy Champion of control --> Maintaining strategic control (staying in close touch of strategy
39
Strategic leadership
Inspires people to implement organizational strategies.
40
Top managers come up w/ create approaches during the strategic management process
TRUE
41
Cost leadership is a strategy focused on price sensitivity
TRUE
42
Strategic management
Process of formulating and implementing strategies to deliver competitive advantage and accomplish long-term goals
43
Strategy formulation
Process of creating strategies to deliver competitive advantage. - Crafting strategy to fit mission, strategic indent, objectives, environmental conditions
44
Strategy implementation
Process of putting strategies into action.
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