Strategic Management

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Strategic Management
2012-09-23 20:28:54
Strategic Management Exam

Exam 1
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  1. Strategic Management
    long term efficient & effective planning, organizing, leading and controlling designed to achieve the mission & goals of an organization.
  2. Mission Statement
    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 
  3. External environment
    • Economic
    • Social
    • Technological
    • Demographic
    • Political/Legal
    • Entry Barriers
    • Supplier Power
    • Buyer Power
    • Substitite Availability
    • Competitive Rivalry
    • Complementors
    • Competitors
    • Creditors
    • Customers
    • Labor
    • Suppliers
  4. What do we do with the results of an external environmental analysis?
    Determine the organzations opportunites and threats
  5. Why does a firm need to study it's internal environment?
    To evaluate its strengths and weaknesses within it's organizational structure
  6. What are resources?
    • asssets of a company both tangible and intangible
    • i.e. capital, lean production, brand image, etc.
  7. What are capabilities?
    a company's skills at coordinating its resources & putting them to productive use 
  8. What are the criteria used to determine if capabilities are core competencies?
    • Valuable
    • Costly to imitate
    • Nonsubstitutable
    • Rare
  9. What do we do with the results of an internal market analysis?
    Determine the firm's strengths and weaknesses
  10. When does a firm attain a sustainable competitive advantage?
    When its efficiency, quality, innovation and responsiveness to customers is best in the industry
  11. What are the four functional level strategies of a firm?
    • Cost leadership
    • Differentiation
    • Focused cost leadership
    • Focused differentation
    • Integrated cost/leadership differentiation
  12. Cost Leadership
    • an integrated set of actions designed to produce goods at lowest cost to BROAD market segments.
    • ex. WalMart
  13. Differentiation
    an integrated set of actions designed to create goods that are distinct (or perceived so) to BROAD market segments
  14. Focused cost leadership
    • set of actions designed to produce goods at lowest costs to NARROW market segments
    • i.e. IKEA
  15. Focused differentiation
    • set of actions designed to create goods that are distinct (or perceived so) at lowest cost to NARROW market segments 
    • i.e. Ferrari, Rolex
  16. 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
  17. 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
    • Imitation
  18. Competitive Risk of Differentiation
    • Cannibalization
    • Learning can erase the differentiation
    • Counterfeiting
  19. 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
  20. 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 
  21. Strategies in Fragmented Industries
    • Chaining
    • Franchising
    • Horizontal Merger
    • Using IT & the Internet
  22. Stages in Industry Life Cycle
    • Embryonic
    • Growth
    • Shakeout
    • Mature
    • Decline
  23. Stages in Product Life Cycle
    • Intro
    • Growth
    • Maturity
    • Decline
  24. Stages in Product Adoption Cycle
    • Innovators
    • Early adopters
    • Early Majority
    • Late Majority
    • Laggards 
    • Nonadopters
  25. Reasons for slow growth in embryonic markets
    • First products -lower quality
    • Undeveloped channels of distribution
    • Lack of complementary products
    • High product cost
  26. 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
  27. Strategies to Manage Rivalry
    • Price signaling: vigorous response to price changes
    • Price leadership: a dominant firm chooses a price and the rest follow with no collusion
    • Nonprice competition: real and defacto
    •      product differentiation
    •      product development
    •      market development
    •      product proliferation
    •      capacity control