Business Policies

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  1. The Three big strategic questions are
    • 1. What's the compay's present situation
    • 2. Where does the company need to go from here?
    • 3. How should it get there?
  2. The Hows that define a Firm's Strategy
    • How to grow the business
    • How to please customers
    • how to outcompete rivals
    • How to manage each functional piece of business (R&D, production, marketing, HR, finance and so)
    • How to respond to changing market condition
    • How to achieve targeted levels of performance
  3. Strategic choices about "how" are based on
    • Trial and error organizational learning about what has worked and what has not worked
    • Management's appetite for taking risks
    • managerial analysis and strategic thinking about how best to proceed given market conditions and a company's circumstances
  4. In choosing a strategy, managment is in effect saying
    "amoung all the many different ways of competing we could have chosen, we have decided to employ this combination of competitive and operating approaches to move the company in the intended direction, strengthen its market position and competitveness, and boost performance"
  5. Developing a successful strategy hines on making competitive moves aimed at
    • Appealing to buyers in ways to set the company apart from rivals and
    • Carving out it's own market position
  6. Involves developing a distinctive "aha" element to
    • Attract customers and
    • produce competitive edge
  7. The heart and soul of any strategy are actions a company makes to
    • Improve its finacial perforamnce
    • stregthen its competitive position, and
    • gain competitive advantages over rivals
  8. A creative, distinctive strategy that sets a company apart from rivals and yields a competitive advantage is a company's most reliable ticket to above average profitability
    Operating with a competitive advantage is more profitable than operating without one

    Operating with a competitive disadvantage nearly always results in below-average profitability
  9. A company achieves sustainable competitive advantage when
    • an attractive number of buyers prefer tis product/services over those of rivals and
    • The basis for this preference is durable
  10. What separates a powerful strategy from and ordinary strategy is management's ability to forge a series of moves, both in the marketplace and internally, that
    produces sustainable competitive advantage
  11. Strategic approches to building sustainable competitive advantages are
    Be the industry low cost provider by achieving a cost-based competitive advantage

    Incorporate differentiating features such as superior products/service keyed to higher quality, better performance, wider selection, value-added services, or some other attribute

    Focus on a narrow market niche by winning a competitive edge by doing a better job than rivals of serving the need and preferences of buyers in the niche

    Develop expertise and resource strengths not easily imitated or matched by rivals Achieve a capablities-based competitive advantage
  12. Identifying a company's strategy 1
    Actions to gain sales and market share via lower prices, more performance features, more appealing design, better quality or cust serv, wider product selection, or other such actions
  13. Identifying a company's strategy 2
    Actions to respond to changing market conditions or other external factors
  14. Identifying a company's strategy 3
    Actions to enter new geographic or product markets or exit existing ones
  15. Identifying a company's strategy 4.
    Actions to capture emerging market opportunties and defend against external threats to the company's business prospects
  16. Identifying a company's strategy 5
    Actions to strenthen market standing and competitiveness by acquiring or mearging wit other companies
  17. Identifying a company's strategy 6
    Actions to stregthen competitiveness via strategic alliances and collaborative partnerships
  18. Identifying a company's strategy 7
    Actions and approaches used in managing R&D, production, sales and marketing, finance, and other key activities
  19. Identifying a company's strategy 8
    Actions to strengthen competitive capabilities and correct competitive weaknesses
  20. Identifying a company's strategy 9
    Actions to diversify the company's revenues and earnings by entering new businesses
  21. Why do Strategies Evolve?
    • A company's strategy is a work in progress
    • Changes may be necessary to react to
    • Financial Crisis
    • Fresh moves of competitors
    • evolving customer prefernces
    • Technological breakthroughs
    • Emerging market opportunities
    • changing political or enconomic climate
    • New Ideals to improve strategy
  22. A company's stratgey is a blend of proactive initiatieves and reactive adjustments
    • Proacative strategy elements included
    • New intiatives plus ongoing strategy elements continued from prior periods

    • Reactive Strategy elements
    • Adaptive reactions to changing circumstances

    These become the latest version of the company's strategy and the prior version of the companies strategy is abandoned
  23. Ethical and moral standards go beyond
    prohibitions of law and language of "though shalt not"

    to issues of Duty and right vs "wrong"
  24. Ethical and moral standards address
    What is the right thing to do?
  25. Two critieria of an ethical strategy
    Does not entail actions and behaviors that cross the line from "should do" to "should not do" (because such actions are unsavory, shandy, unconscionable, injurious to others, or harmful to the environment)

    Allow managment to fufill its ethical duties to all stakeholders
  26. A firm's ethical Responsibilities too its Stakeholders
    Owners/shareholders - Rightfully expect some form of return on their invesment

    Employees - Rightfully expect to be treated with dignity and respect for devoting their energies to the enterprise

    Customers - Rightfully expect a seller to provide them with a reliable, safe product or service

    Supplies Rightfully expect to have an equitable relationship with firms they supply and be treated faily

    Community Rightfully expect pbusinesses to be good citizens in their community
  27. Roes of senior executives; linking strategy with ethics
    Forbid pursuit of ethically questionable business opportunities

    insist all aspects of company strategy reflect high ethical standards

    make it clear that all employees are expected to act with integrity

    install organizational checks and balances to monitor behavior, enforce ethcal codes of conduct and provide gudiance to employees in gray areas

    Display genuine commitment to conduct business activities ethically
  28. What is a business model?
    A business model addresses "how do we make money in this business?"

    Is a the company's strategy capable of delivering good bottom-line results?
  29. Do the revenue-cost-profit economics of the strategy make good business sense?
    Look at revenue streams the strategy is expected to produce

    Look at associated cost structure and potential profit margins

    Do resulting earnings streams and ROI indicate the strategy has good potential to deliver acceptable profitability?
  30. Relationship between strategy and business Model
    Stragey: deals with a company's competitive initiatives and business approaches

    Business model concerns whether revenues and cost flowing from the strategy demonstrate a business can be profitable and viable
  31. Tests of a winning strategy
    Goodness of fit test How well does the strategy fit the company's external and internal situation?

    Competitive advantage test is the strategy helping the company acieve a sustainable competitive advantage?

    Performance Test is the strategy resulting in better company performance?
  32. Why shold crafting and executing strategy be top priority management tasks?
    A compelling need exists for managers to proactively shape how a firm's business will be conducted

    A strategy -focused firm is more likelyt to be a strong bottom-line performer than one that views strategy as secondary
  33. Good Strategy + Good Strategy Execution = Good Management
    • Crafting and executing strategy are core management functions
    • Among all things managers do, nothing affects a company's ultimate success or failure more fundamentally than how well its management team
    • Charts a company's direction
    • develops competitively effective strategic moves and guiness approaches, and
    • Pursuses what needs to be done internally to produce good day=in/day=out strategy execution
  34. Excellent execution of an excellent strategy is the best test of managerial excellence and the most reliable recipe for winning in the marketplace!
Card Set:
Business Policies
2012-02-03 06:30:55
Business polices

Crafting and executing stratagies
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