Card Set Information
Strategic Management Exam
long term efficient & effective planning, organizing, leading and controlling designed to achieve the mission & goals of an organization.
the fundamental purpose that sets a firm apart from other firm's & identifies the scope of its operation in product & market terms is defined as the company mission
What do we do with the results of an external environmental analysis?
Determine the organzations opportunites and threats
Why does a firm need to study it's internal environment?
To evaluate its strengths and weaknesses within it's organizational structure
What are resources?
asssets of a company both tangible and intangible
i.e. capital, lean production, brand image, etc.
What are capabilities?
a company's skills at coordinating its resources & putting them to productive use
What are the criteria used to determine if capabilities are core competencies?
Costly to imitate
What do we do with the results of an internal market analysis?
Determine the firm's strengths and weaknesses
When does a firm attain a sustainable competitive advantage?
When its efficiency, quality, innovation and responsiveness to customers is best in the industry
What are the four functional level strategies of a firm?
Focused cost leadership
Integrated cost/leadership differentiation
an integrated set of actions designed to produce goods at lowest cost to BROAD market segments.
an integrated set of actions designed to create goods that are distinct (or perceived so) to BROAD market segments
Focused cost leadership
set of actions designed to produce goods at lowest costs to NARROW market segments
set of actions designed to create goods that are distinct (or perceived so) at lowest cost to NARROW market segments
i.e. Ferrari, Rolex
Focused cost/leadership differentiation
set of actions designed to produce distinct goods (or perceived so) at lowest cost to NARROW market segments
i.e. McDonald's, Southwest
Competitive Risk of Cost Leadership
Technological innovation can wipe out cost advantage
Cost leaders can lose track of the prerequisite needs of customers, suppliers & buyers
Competitive Risk of Differentiation
Learning can erase the differentiation
Competitive Risk of 'Focused Strategies'
All assocaited with cost leadership and differentation
Competitors focus more on narrow market segments
Focused targets can become the interest of nonfocused companies
Narrow market may become the whole
Competitive Risks of Integrated Cost Leadership/Differentiation
All associated with low cost, differentiation & focused strategies
You must achieve and keep a low cost and differentiated product or you can be stuck in the middle
Strategies in Fragmented Industries
Using IT & the Internet
Stages in Industry Life Cycle
Stages in Product Life Cycle
Stages in Product Adoption Cycle
Reasons for slow growth in embryonic markets
First products -lower quality
Undeveloped channels of distribution
Lack of complementary products
High product cost
Reasons for growth (mass markets) phase
Technology makes product easier to use (increase value to customer)
Complementary products are developed
Cost & prices fall and demand risks
Strategies to Manage Rivalry
: vigorous response to price changes
: a dominant firm chooses a price and the rest follow with no collusion
: real and defacto