Operations Chapter 2

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  1. Discuss the role of planning and control in maintaining a co's strategic alignment.
  2. Describe the control cycle.
  3. Discuss the role of governance.
  4. Explain the agency problem.
  5. Differentiate four levels of strategy in organizations, including corporate strategy, business strategy, functional strategy, and operational strategy.
  6. Discuss key elements of the competitive environment of strategy, including market structure, indicators of market structure, market dimensions, and market models.
  7. Discuss the concepts of core competency and competitive advantage.
  8. Distinguish sustainable competitive advantage from temporary competitive advantage.
  9. Identify the characteristics of a mature industry.
  10. Explain and differentiate b/t generic growth strategies.
  11. Describe 3 differentiation strategies used by ins co's.
  12. Explain how operational excellence can support growth strategies.
  13. Corporate Mission
    An org's reason for being as expressed in a mission statement.
  14. corporate vision
    A co's view of its mission as it evolves into the future.
  15. corporate goals and objectives
    The broad target a co. is attempting to achieve in support of the corporate mission and vision.
  16. strategy
    In business, a comprehensive plan for future action directed tward achieving various goals, including making the corporate vision a reality.
  17. tactic
    An action designed to support a strategy.
  18. steering control
    An administrative control intended to communicate expectations and that is in place before a reporting period begins.
  19. concurrent control
    An admin control used b/t reporting periods to monitor operations and indicate whether ongoing processes are within tolerances.
  20. feedback control
    An admin control used at the END of a measurement period to compare actual performance/output with established standards.
  21. strategic alignment
    In business org, the establishment of congruent positioning b/t operational efforts with the corporate structure and corp strategy.
  22. corporate governance
    The responsibility & authority of a co's board of directors to direct the org to properly fulfill its missions on behalf of the co's legitimate stakeholders in a legal and fiscally responsible manner.
  23. agency problem
    A problem that exists when one person is paid to act on behalf of another, but the 2 individs have different interests, have access to different info about the agents activities, and have different incentives.
  24. conflict of interest
    A conflict that exists when the interests or actions of one entity, like an empee, are incompatible w/the interests or actions of a related entity, like an employer.
  25. corporate strategy
    A co's broad plan for achieving competitive advantage in all its undertakings, across all lines of its business.
  26. business strategy
    The action plan of a line of business, aka a product line, aka a business unit, aka strategic business unit.
  27. competitive strategy
    A strategy that encompasses only corporate or business strategies and tactics devoted to achieving or maintaining the co's advantageous position relative to competitors.
  28. functional strategy
    A strategy that drives plans for a specific functional area or dept.
  29. operational strategy
    An action plan for a narrow area dealing w/day to day activities & operating w/in a budget dictated by the co's functional plan and functional management.
  30. market
    A real or hypothetical forum where sellers and buyers exchange resources, including services.
  31. market structure
    A structure representing the number and relative sizes of sellers in a specified group.
  32. industry structure
    A structure representing the nature of the competitive relationships among the various co's in an industry.
  33. market share
    A co's %age representation in a given measure of the size of the entire market.
  34. customer share
    The %age of total customers for a given product or service who are also customers of a particular co.
  35. industry ranking
    A listing of co's w/in an industry in order of a specified measure of their size.
  36. market leadership
    A co's prominent competitive position relative to its competitors in terms of market share percentage.
  37. industry concentration
    A measurement of the # of co's w/in a specified set of co's and the distribution among them of their total reserves.
  38. concentration ratio
    A measure of industry concentration consisting of the %age market share attributable to a given number of the largest firms in an industry, and sometimes calculated by taking the sum of the %age market shares of the top few co's in an industry.
  39. market dimensions
    The measurable characteristics of a market or an industry, including the number of sellers, number of buyers, availability of substitute products, role of pricing, role of advertising, role of regulation, and economies of scale.
  40. substitute product
    In economics, two or more products that purchasers can use to satisfy the same wants or needs.
  41. finacial economies of scale
    In economics, savings that accrue to a seller due to having large scale financial assets.
  42. operational economies of scale
    In economics, savings that accrue to a seller due to having large scale physical operations.
  43. monopolistic competition
    In economics, a model of a market having MANY SELLERS, SIMILAR PRODUCT, a customer perception of NON PRICE DIFFERENCES, INSIGNIFICANT BARRIERS TO ENTRY to new sellers, USE OF BRAND NAMES, and reliance on ADVERTISING.
  44. oligopoly
  45. core competencies
    A co's distinctive strengths that form the basis for the co's ability to add value in its transformative processes.
  46. competitive advantage
    A position or circumstance that allows a co to earn greater returns or faster mkt growth than its competitors, whether in the short run or potentially in the long run.
  47. sustainable competitive advantage
    competitive advantages have not been duplicated or imitated by competitors in the long run.
  48. temporary competitive advantage
    competitors quickly emulate
  49. growth strategy
    In co strategy, an overall plan to promote co growth
  50. differentiation strategy
    A strategy that supports growth in broad markets by creating a clear distinction b/t a co and its competitors.
  51. low-cost strategy
    A strategy that supports growth in broad markets by offering customers the same benefits as other co's, but at a lower cost of production, and presumably at a lower price.
  52. niche strategy
    An approach to growth thru focus on a management practice or subset of the total market.
  53. innovation strategy
    Growth strategy of replacing an industry's present model for value creation with a groundbreaking improvement in products or operations that competitors cannot readily adopt.
  54. knowledge strategy
    In competitive stragegy, a growth strategy of successfully developing and exploiting new knowledge that no other firm in the industry possesses.
  55. customer-focus strategy
    A growth strategy of successful competition based on providing superior customer service.
Card Set
Operations Chapter 2
Aligning Performance with Corporate Initiatives
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