Strategic Management of Resources

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Sandy2015
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306486
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Strategic Management of Resources
Updated:
2015-08-27 13:16:09
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SMR
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Developing the Business Strategy
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Chapter notes for SMR
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  1. What are 7 key issues a company should focus on?
    • 1. The Industry's dominant economic features
    • 2. Strength of competitive forces facing industry members.
    • 3. Forces driving industry change
    • 4. Market positions occupied by industry members
    • 5. Likely strategic moves by rivals
    • 6. Key factors for future success in the industry
    • 7. Industry attractiveness and profitability.
  2. List 10 dominant industry features
    • 1. Market size and growth rate
    • 2. Number of rivals.
    • 3. Scope of rivalry
    • 4. number of buyers
    • 5. Product differentiation
    • 6. Product innovation
    • 7. Supply and demand conditions
    • 8. Technological change
    • 9. Vertical Integration
    • 10. Economies of scale
    • 11. Learning and experience
  3. If a company is facing the mature stage of its product life cycle with a single digit growth rate what should it focus on?
    Cost reduction and customer service
  4. What tool is used to analyze the principal competing pressures in a market and to assess the strength and importance of each?
    The Five-forces model
  5. True or False

    The five forces model is based on the assumption that an industry is the composite of competitive pressures or forces operating in five areas of the overall market.
    True
  6. Describe the competitive forces in the five-forces model of competition
    • 1. Rivalry among competing sellers
    • 2. Suppliers of raw materials, parts, components or other resource inputs.
    • 3. Firms in other industries offering substitutes
    • 4. Potential new entrants
    • 5. Buyers - collaboration, bargaining power
  7. When is rivalry generally stronger?
    • 1. Buyer demand grows slowly or falls off
    • 2. Number of rivals increases
    • 3. Rival's products are commodities
    • 4. Costs to switch brands are low
    • 5. Rivals make aggressive moves to attract buyers
    • 6. Rivals have diverse strategies
  8. When is rivalry generally weaker?
    • 1. Buyer demand is strong.
    • 2. Rival products are strongly differentiated
    • 3. Customer loyalty is high
    • 4. Costs to switch brands are high
    • 5. There are fewer than 5 sellers.
  9. What are some tactics for competing with rivals and attracting buyers?
    • 1. lower prices
    • 2. better products and quality
    • 3. strong brand image
    • 4. wider selection
    • 5. bigger dealer network
    • 6. lower rate financing
    • 7. more innovation
    • 8. better customer service
    • 9. more customization
  10. Rivalry among competing sellers refers to what?
    • the five forces model:
    • companies (sellers) in the same industry compete among themselves for new customers, market share, and long term competitive advantages.
  11. What are signs that competition from substitutes is strong?
    • 1. Sales of substitutes are growing faster than sales of the industry.
    • 2. Producers of substitutes are adding new capacity
    • 3. Profits of producers of substitutes are rising
  12. When is competitive pressure from substitutes stronger?
    • Readily available
    • Attractively priced
    • Have better features
    • Cost of switching over is low
  13. When is competitive pressure from substitutes weaker?
    • Not of good quality
    • higher priced
    • cost to switch is high
  14. When is Buyer bargaining power weaker?
    • Buyers purchase the item infrequently
    • Cost to switch brands is high
    • Surge in demand creates a seller's market
    • Seller's brand reputation is important to buyer
    • A specific sellers product or service best matches buyer requirement
  15. When is buyer bargaining power stronger?
    • Cost to switch brands is low
    • Buyers are large and can demand concessions
    • Buyer demand is weak or buyers are few
    • Buyer's name adds prestige to seller's customer list
    • Buyer has resources to become a competitor
  16. When is supplier bargaining power weaker?
    • 1. Cost to switch to alternative supplier is low.
    • 2. Item is a commodity.
    • 3. Good substitutes exist.
    • 4. Suppliers of inputs are abundant.
    • 5. Buyers account for a big fraction of suppliers sales
    • 6. Buyers can manufacture their own requirements.
  17. Supplier bargaining power is stronger when?
    • 1. Cost to switch to alternative supplier is high
    • 2. Needed inputs are in short supply or there are few suppliers. 
    • 3. Supplier has an enhanced quality or differentiator.
    • 4. Supplier has resources to become a powerful rival.
  18. When are entry threats into the market stronger?
    • 1. many possible entrants.
    • 2. Entry barriers are low
    • 3. Industry is expanding
    • 4. Good profit outlook
    • 5. Rapid demand growth
    • 6. Industry members are weak
  19. When are entry threats weaker?
    (Threat of market entrants)
    • 1. Few potential entrants
    • 2. Entry barriers are high
    • 3. Poor industry outlook
    • 4. Slow demand growth
    • 5. Industry members are strong.
  20. True or false
    The result of the five forces analysis is an assessment of the overall strength of the competitive forces facing a company in it industry.
    True
  21. Name at least 10 other factors driving industry change.
    • 1. Emerging new internet capabilities and applications.
    • 2. Increasing globalization
    • 3. Changes in an industry's long term growth rate
    • 4. Changes in who buys the product and how they use it
    • 5. Product innovation
    • 6. Technological change and manufacturing process innovation
    • 7. Marketing innovation
    • 8. Entry or exit of major firms
    • 9. Diffusion of technical know-how across more companies and more countries
    • 10. Changes in cost and efficiency
    • 11. Growing buyer preferences for differentiated products instead of a commodity product
    • 12. Reductions in uncertainty and business risk
    • 13. Regulatory influences and government policy changes
    • 14. Changing societal concerns, attitudes, and lifestyles
  22. What are the impacts and implications of driving forces?
    • Driving forces are major underlying causes of change in industry conditions and the competitive landscape.
    • Identify those three or four that are most applicable to the industry
    • Determine if cumulative impact will make competition more or less intense
    • Assess impact on profitability
    • Consider implications for strategy changes
  23. How do companies in each industry differ in their approaches to market?
    • Price and quality of goods and services sold
    • Distribution channels
    • Product and service features that appeal to different market segments
  24. Explain the general relationship between industry attractiveness and competition among rival sellers.
    If the profit potential is high and the competitive pressure is low -->this is very attractive:barriers are high, substitutes are low, supplier and buyer leverage is weak.

    If the profitability is low and the competitive pressure is high-->this is unattractive: Barriers are low, competition is intense, supplier and buyer leverage is high

    Most companies are in the middle with medium profitability and several competitors in that space.
  25. To predict a competitors next moves, a company should determine what?
    • Which competitors need to increase market share
    • Have the need and resources to move to a different position in the cluster
    • Are candidates for acquisition
    • Are likely to enter new geographic markets
    • Are likely to expand product offerings and enter new product segments.
  26. Competitive intelligence consists of overt and unethical methods for collecting and analyzing company data.
    True or false
    • False
    • Competitive intelligence consists of overt and ethical methods for collecting and analyzing company data.
  27. KSF means what?
    Key Success Factors

    Things that a company needs to "Get it right"
  28. To evaluation competitors, a company should determine what?
    • Which ones have the best strategies
    • Are posed to increase market share
    • Have the strategies and resources to overtake the industry leader
    • Have clearly defined competitive advantage factors
  29. True or False

    A company needs 15 - 20 KSF's to be competitive
    False

    No more than 5 or 6 are needed
  30. What are other types of KSFs?
    • Low costs
    • Convenient locations
    • Strong financial performance measures
    • patent protection
  31. What are marketing related KSFs?
    • Well known and respected brand and breadth of products
    • Fast, accurate technical support and customer services
    • Accurate filling of orders
    • Effective advertising
  32. What are skills and capability related KSFs?
    • Talented work force
    • Wide distribution capabilities
    • Product innovation and design expertise
    • supply Chain management 
    • E-commerce
  33. What are distribution related KSFs?
    • Network of dealers and distributors
    • Strong direct sales capabilities
    • Favorable retailer display space
  34. What are Manufacturing related KSFs?
    • Quality Control
    • Skilled, highly productive labor
    • High Utilization rates
    • Low cost product design and engineering
  35. what are technology related KSFs?
    • Expertise in a particular technology or research
    • Proven ability to improve production processes
  36. Ture or False

    Excelling at one KSF can provide sustainable advantages
    True
  37. What are major KSF categories?
    • Technology
    • Manufacturing
    • Distribution
    • Marketing
    • Skills and Capabilities
    • Customer Service
  38. What are KSFs?
    • product and process attributes
    • processes
    • Costs
    • Resources
    • Capabilities that have the greatest impact on success in the marketplace
  39. What two activities are remaining to be done outside of the SWOT analysis?
    • 1. Determining the company's price and cost competitiveness
    • 2. Creating a detailed comparison of the company's competitive strengths and weaknesses relative to its rivals
  40. Two factors are important in implementing the 3 phase SWOT analysis
    • 1. Selectivity
    • 2. resources
  41. What is Phase 3 of the SWOT analysis?
    • Translates the findings and conclusions into protential actions for improving strategy and business prospects. 
    • Strengthen competitive capabilities to improve strategic prospects and profitability.
    • Pursue market opportunities with greatest potential
    • Reduce the company's competitive weaknesses and liabilities
    • Use strengths to limit the impact of external threats
  42. What is Phase 2 of SWOT analysis?
    • Preliminary findings and conclusions about
    • the relative strength or weakness of the business
    • The particularly attractive aspects of the business
    • Aspects that are of concern
  43. What is Phase 1 of the SWOT Analysis?
    • Identification of 
    • Strengths, Weaknesses, Opportunities, and Threats
  44. There are X phases to the SWOT Analysis process
    three phases
  45. SWOT analysis leads to ?
    • 1. Conclusions about the company's overall business health and sustainability
    • 2. Preliminary recommendations for actions to improve its market position and profitability
  46. What is a structured approach to analyzing the internal strengths and weaknesses of a company's resources and capabilities, and its external market opportunities and threats?
    SWOT analysis
  47. What capabilities are responsible for the planning and execution of operations to carry out the business strategy?
    Value chain capabilities
  48. What are 5 key competitive factors?
    • Efforts to build competitive advantage
    • Plans to outperform rivals
    • Ability to react to changing conditions
    • Geographic coverage
    • Collaborative partnerships and strategic alliances
  49. Explain the major outputs of strengths, weaknesses, opportunities, and threats (SWOT) analysis.
    • Conclusions concerning the company's overall business situation
    • Actions for improved company strategy
  50. List the key success factors (KSFs), or criteria, used in the competitive strength assessment.
    • Quality and product performance
    • Reputation and image
    • Technological skills
    • Dealer network
    • product and service innovation
    • financial resources
    • relative cost position
    • Customer service
  51. Describe the importance of determining price competitiveness among rival sellers.
    Understanding whether and how a company can become more cost competitive with its rivals prices through value chain or supply chain advancements and other improvements is critical to the viability of a company
  52. What are 3 tools to analyze price competitiveness?
    • Value Chain Analysis
    • Activity based costing
    • Benchmarking
  53. Benchmarking
    Tool used to analyze price competitiveness.

    Auditing others to gain data on how you do it compared to others.
  54. What is Activity Based Costing?
    ABC accounting to determine the internal value chain or supply chain costs incurred by its own primary activities and support activities

    Tool used to analyze price competitiveness
  55. What are 5 generic competitive strategies?
    • 1. Overall low cost provider strategy
    • 2. focused low cost strategy
    • 3. broad differentiation strategy
    • 4. Focused differentiation strategy
    • 5. Best cost provider strategy
  56. What is value chain analysis
    Tool to analyze price competitiveness

    -deconstructing the value chain for the product in question by determining the physical flow of the product
  57. Describe the difference between a broad differentiation strategy and a focused differentiation strategy.
    Broad differentiation differentiates its products in the market to appeal to a broad base of customers; differentiation factors include product attributes, service, and image.

    Focused differentiation strategy offers differentiated products with customized attributes to a narrow market segment
  58. Describe the difference between a low cost provider strategy and a focused low cost strategy
    Low cost provider strategy focuses on lower overall costs in order to underprice competitors; sells to a broad range of customers.

    Focused low cost providers appeal to a narrow market segment and underprices rivals by lower cost production or service.
  59. explain the logic of the best cost provider strategy
    The best cost provider strategy is a hybrid approach that incorporates excellent product attributes into items at a lower cost than others, but at prices below the ability of their rivals to match
  60. What are the important attributes of low cost strategy?
    • 1. Maintain high value chain efficiency, low value chain costs.
    • 2. Maintain low price, not necessarily frills-free.
    • 3. Underprice competitors to increase total profits
    • 4. Achieve lasting strategic competency that rivals find hard to match.
  61. Activity Based Cost Accounting
    A system that accumulates costs based on activities performed and then uses cost drivers to allocate these costs to products or other bases such as customers, markets or products
  62. learning curve
    a reflection of the rate of improvement in time per piece as more units of an item are made
  63. forward integration
    The process of buying or owning elements of the production cycle and the channel of distribution forward toward the final customer
  64. differentiation strategy
    A business strategy that focuses on setting a product or service apart from the competition - focusing on making a product or service unique
  65. core competencies
    Bundles of skills or knowledge sets that enable a firm to provide the greatest level of value to its customers in a way that is difficult for competitors to emulate and that provides for future growth.
  66. competitive advantage
    The advantage a company has over its rivals in attracting customers and defending against competitors.
  67. benchmarking
    The act of comparing a company's costs, products, and services to that of a company thought to have superior performance.
  68. Activity based cost accounting
    A system that accumulates costs based on activities performed and then uses costs drivers to allocate these costs to products or other bases such as customers, markets or projects.
  69. Focused Differentiation strategy attributes?
    • 1. This applies a differentiation strategy to a target market niche (specific type of customer or geographic area).
    • 2. The strategy meets unique buyer needs for special product and service attributes or seller capabilities.
    • 3. Companies often target customers willing to pay a premium for a product/service
  70. Focused low cost strategy
    • 1. This applies a low cost strategy to a target market niche (specific type of customer or geographic area).
    • 2. The strategy meets well defined buyer needs
    • 3. Focus is on lowest overall cost
    • 4. Reconfigure the value chain to reduce costs.
  71. Best Costs provide strategy attributes include:
    • 1. This is a hybrid, low cost approach to offering a differentiated product and service.
    • 2. Upscale attributes are incorporated using strategic advantage of lower cost production than rivals
    • 3. Product or service is significantly better than low cost version
    • 4. Price is significantly lower than higher priced differentiated alternatives.
  72. What are the important attributes of the broad differentiation strategy?
    • 1. Product and service attributes lower buyers' costs of using.
    • 2. Buyers are attracted to intangible features of the product and service.
    • 3. Price premium is greater than cost to differentiate
    • 4. Strategic capabilities are hard to match
  73. What are decision factors for industry attractiveness based on overall industry conditions and competitiveness?
    • The industry's growth potential
    • The effect of competition on current and future profitability
    • The impact of driving forces on profitability
    • The risk and uncertainty in the industry's future
    • Effects of regulation, environmental issues, customer demand, and industry overcapacity
  74. What are the 6 key issues when assessing the internal environment?
    • How well the current strategy is working
    • SWOT - resources and capabilities
    • SWOT - Opportunities and threats
    • Competitiveness of prices and costs
    • Strength relative to competitors
    • Highest priority issues for management
  75. What should an individual company consider  when assessing industry attractiveness?
    • Competitive position in relation to rivals: strong or weak
    • Relationship between competitive strength (relative to rivals) and industry attractiveness
    • Ability to capitalize on vulnerabilities of competitors and outperform them, even in an unattractive industry
  76. Strategic performance measurements
    Measurements that relate to the long term goals of a business
  77. Strategic drivers
    Factors that influence business unit and manufacturing strategies
  78. Value chain analysis
    An examination of all links a company uses to produce and deliver its products and services starting from the origination point and continuing through delivery to the final customer
  79. Return on Investment
    A relative measure of financial performance that provides a means for comparing various investments by calculating the profits returned during a specified time period
  80. SWOT Analysis
    An analysis of the strengths, weaknesses, opportunities, and threats of and to an organization
  81. Which of the following will increase rivalry among sellers in the same industry

    A) Buyer demand grows slowly or is flat and both strong and weak rivals exist
    B) Bundles of skills or knowledge sets that enable a firm to provide the greatest level of value to its customers in a way that is difficult for competitors to emulate and that provides for future growth.
    C) Value chain capabilities
    D) a reflection of the rate of improvement in time per piece as more units of an item are made
    A) Buyer demand grows slowly or is flat and both strong and weak rivals exist
    (this multiple choice question has been scrambled)
  82. What is the strongest force in the 5 forces model of competition

    A) Rivalry between sellers
    B) A business strategy that focuses on setting a product or service apart from the competition - focusing on making a product or service unique
    C) A relative measure of financial performance that provides a means for comparing various investments by calculating the profits returned during a specified time period
    D) The act of comparing a company's costs, products, and services to that of a company thought to have superior performance.
    A) Rivalry between sellers
    (this multiple choice question has been scrambled)
  83. The primary use of environmental scanning is to

    A) An examination of all links a company uses to produce and deliver its products and services starting from the origination point and continuing through delivery to the final customer
    B) Factors that influence business unit and manufacturing strategies
    C) identify threats and opportunities
    D) The advantage a company has over its rivals in attracting customers and defending against competitors.
    C) identify threats and opportunities
    (this multiple choice question has been scrambled)
  84. Which of the following is not a determinant of industry attractiveness?

    A) Supplier collaboration
    B) relative strength of the seller versus rivals
    C) profitability
    D) collective impact of competitive forces
    A) Supplier collaboration
    (this multiple choice question has been scrambled)
  85. Which of the following tools is not used in determining price competitiveness

    A) Value chain analysis
    B) risk assessment
    C) Benchmarking
    D) ABC accounting
    B) risk assessment
    (this multiple choice question has been scrambled)
  86. What are ethical ways of collecting information on a competitors next moves?

    A) A system that accumulates costs based on activities performed and then uses costs drivers to allocate these costs to products or other bases such as customers, markets or projects.
    B) Understanding whether and how a company can become more cost competitive with its rivals prices through value chain or supply chain advancements and other improvements is critical to the viability of a company
    C) listening and observing at trade shows
    D) Value chain analysis
    C) listening and observing at trade shows
    (this multiple choice question has been scrambled)
  87. Which of the following is not a deterrent to new market entry?

    A) restrictive trade policy
    B) Industry members in the market looking to expand into new market segments or geographies
    C) steep learning curve effect
    D) slow industry growth
    B) Industry members in the market looking to expand into new market segments or geographies
    (this multiple choice question has been scrambled)
  88. All of the following are competitive strategies except the following:

    A) focused differentiation strategy
    B) focused low cost strategy
    C) Differentiated low costs provider strategy
    D) low cost provider strategy
    C) Differentiated low costs provider strategy
    (this multiple choice question has been scrambled)

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