Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
45 Cards in this Set
- Front
- Back
|
5 elements of a good strategy |
Arena, Vehicle, Differentiators, Staging, and Economic logic |
|
|
Arenas |
Where will we be active? Which product categories? Which geographic areas? Which core technologies? Which value-creation stages? |
|
|
Vehicle |
How will we get there? Internal development? Joint Ventures? Licensing/franchising? Acquisitions? |
|
|
Differentiators |
How will we win? Image? Customization? Price? Styling? Product reliability? |
|
|
Staging |
What will be our speed and sequence of moves? Speed of expansion? Sequence of initiatives? |
|
|
Economic Logic |
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? |
|
|
Sustained competitive advantage |
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. |
|
|
Strategy |
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. |
|
|
5 different competitive strategies |
1. Deliberate Strategy 2. Emergent Strategy 3. Abandon Strategy 4. Realized Strategy 5. Sustained Competitive Advantage |
|
|
Deliberate Strategy |
What we set out to do? What we intend to do? |
|
|
Emergent Strategy |
Unintended strategy. Emerges |
|
|
Abandoned Strategy |
Strategy that is left behind abandoned |
|
|
Realized Strategy |
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 |
|
|
Sustained Competitive Advantage Strategy |
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. |
|
|
Business model |
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 |
|
|
3 Test of a winning strategy |
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. |
|
|
5 competitive strategies |
1. Low-cost provider strategy 2. Broad differentiation strategy 3. Focused low-cost strategy 4. Focused differentiation strategy 5. Best-cost provider strategy |
|
|
Vision Statement
|
"where we are going?" the course and direction management has charted and the company's future product-customer-market-technology focus
|
|
|
What makes a good vision statement? |
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 |
|
|
Why a well communicated vision statement matters? |
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. |
|
|
Mission Statement |
Describes its present business and purpose "who we are, what we do, and why we are here" |
|
|
Values |
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 |
|
|
Strategic Objectives |
Relate to target outcomes that indicate a company is strengthening its market standing, competitive vitality, and future business prospects |
|
|
Financial Objectives |
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 |
|
|
Board of director obligations |
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. |
|
|
Strategic inflection point
|
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. |
|
|
Macroenvironment |
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 |
|
|
Political Factors |
Political policies and processes, including the extent to which a government intervenes in the economy. Ex. Tax policy, fiscal policy, bailouts |
|
|
Economic Conditions |
General economic climate and specific factors such as interest rates, exchange rates, inflation rate, unemployment rate, rate of economic growth. |
|
|
Sociocultural forces |
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 |
|
|
Environmental forces |
Ecological and environmental forces such as weather, climate, climate change, and associated factors like water shortages
|
|
|
Legal and regulatory factors |
Regulation and laws with which companies must comply such as consumer laws, labor laws, antitrust laws, and occupational health and safety regulations |
|
|
5 forces model of competition
|
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. |
|
|
Driving forces of change |
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 |
|
|
Driving forces |
the major underlying causes of change in industry and competitive conditions |
|
|
Strategic group maps |
Closer grouping stronger competition not all positions are equally attractive |
|
|
Key Success Factors |
Strategy elements, product attributes, competitive capabilities, or intangible assets with the greatest impact on future success in the marketplace. |
|
|
VRIN Resources |
Test for sustainable competitive advantage ask if a resource or capability is
Valuable Rare Inimitable Nonsubstitutable |
|
|
Competence |
Anything we do well internally |
|
|
Core Competence |
Anything we do well internally and we do it better than anything else. |
|
|
Distinctive Competence |
Anything we do well and better than the competitors. |
|
|
Two best indicators of how well a company's strategy is working? |
Are you achieving your stated financial and strategic objective? Are you above the industry standard or performance? |
|
|
SWOT |
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 |
|
|
Benchmarking |
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. |
|
|
Value Chain Analysis |
Identifies the primary activities that create customer value and related support activities. |
