Strategy Exam I

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  1. the set of actions that its managers take to outperform the company's competitors and achieve superior profitability.
    Strategy
  2. Identifying a Company's Strategy
    Actions to:
    • strengthen
    • gain sales
    • enter new markets
    • capture market opportunities
    • strengthen competitiveness
    • approach R&D
    • Upgrade, Build, or Acquire
  3. A company achieves a ___________ __________ when it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost to the firm. The __________ is __________ if it persists despite the best efforts of competitors to match or surpass this ___________.
    • Competitive Advantage
    • advantage
    • Sustainable
    • advantage
  4. A company's __________ __________ consists of proactive __________ elements that are planned; its __________ ________ consists of reactive _________ elements that emerge as changing conditions warrant.
    • Deliberate Strategy
    • strategy
    • Emergent Strategy
    • strategy
  5. The two elements of a company's business model are:
    • customer value proposition
    • profit formula
  6. The ________ ______ ___________ lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value.
    Customer Value Proposition
  7. The ______ ________ describes the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition.
    Profit Formula
  8. A company's ________ ______ sets forth the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to cover costs and realize a profit.
    Business Model
  9. Three tests can be applied to determine whether a strategy is a winning strategy:
    • The Fit Test
    • The Competitive Advantage Test
    • The Performance Tes
  10. How well does the strategy fit the company's situation?
    The Fit Test
  11. Is the strategy helping the company achieve a sustainable competitive advantage?
    The Competitive Advantage Test
  12. Is the strategy producing good company performance?
    The Performance Test
  13. Good Strategy+Good Strategy Execution=
    Good Management
  14. True or False

    The better conceived a company's strategy and the more competently it is executed, the more likely the company will be a standout performer in the marketplace.
    True
  15. True or False

    Even the best of strategies will lead to success if it is not executed proficiently.
    False
  16. The process of crafting and executing a company's strategy is an ongoing, continuous process consisting of five interrelated stages:
    • Developing a strategic vision
    • Setting Objectives
    • Crafting a strategy
    • Executing chosen strategy
    • Monitoring developments, evaluating performance, and initiating corrective adjustments
  17. Developing a strategic vision that charts the company's long term direction, a mission statement that describes the company's purpose, and a set of core values to guide the pursuit of the vision and mission is the ______ stage of the five interrelated stages.
    First
  18. Setting objectives for measuring the company's performance and tracking its progress in moving in the intended long-term direction is the ________ stage of the five interrelated stages.
    Second
  19. Crafting a strategy for advancing the company along the path management has charted and achieving its performance objectives is the _______ stage of the five interrelated stages.
    Third
  20. Executing the chosen strategy efficiently and effectively is the ______ stage of the five interrelated stages.
    Fourth
  21. Monitoring developments, evaluating performance, and initiating corrective adjustments in the company's vision and mission statement, objectives, strategy, or approach to strategy execution in light of actual experience, changing conditions, new ideas, and new opportunities is the _____ stage of the five interrelated stages.
    Fifth or last
  22. A company's _________ ____ lays out its future direction, performance targets, and strategy.
    Strategic Plan
  23. Stage 1 involves which type of Management?
    Senior Managers
  24. A _________ _______ describes "where we are going"---management's aspirations for the company and the course and direction charted to achieve them.
    Strategic Vision
  25. A _________ _______ delineates management's aspirations for the business, providing a panoramic view of "where are we going" and a convincing rationale for why this makes good business sense for the company.
    Strategic Vision
  26. A _________ _______ thus points an organization in a particular direction, charts a strategic path for it to follow, builds commitment to the future course of action, and molds organizational identity.
    Strategic Vision
  27. Well conceived visions are _________ and ________ to a particular organization; they avoid generic, feel-good statements like "We will become a global leader and the first choice of customers in every market we serve."
    Distinctive and Specific
  28. A surprising number of the vision statements found on company's websites and in annual reports are vague and unrevealing, saying very _______ about the company's future direction.
    little
  29. Winning the support of organization members for the vision nearly always means putting "where we are going and why" in writing, distributing the statement organizationwide, and having ____ ____________ personally explain the vision and its rationale to as many people as feasible.
    top executives
  30. A well-thought-out, forcefully communicated strategic vision pays off in several respects: (1) it crystallizes senior executives' own views about the firm's long term direction; (2) it reduces the risk of rudderless decision making; (3) it is a tool for winning the support of organization members to help make the vision a reality; (4) it provides a beacon for lower level managers in sync with the company's overall strategy; and (5) it helps an organization prepare for the future.
    When top executives are able to demonstrate significant progress in achieving these five benefits...
    the first step in organizational direction has been successfully completed.
  31. A company's ________ describes the scope and purpose of its present business ('who we are, what we do, and why we are here').
    Mission
  32. A company's ________ are the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission.
    Values
  33. Well-stated objectives must be ________, ________ or measureable, and ___________ and must contain a __________ for achievement.
    • specific
    • quantifiable
    • challenging
    • deadline
  34. _________ are an organization's performance targets--the specific results management wants to achieve.
    Objectives
  35. __________ ______________ set performance targets high enough to stretch an organization to perform at its full potential and deliver the best possible results.
    Stretch Objectives
  36. ___________ _____________ communicate management's goals for financial performance.
    Financial Objectives
  37. ___________ ___________ are goals concerning a company's marketing standing and competitive position.
    Strategic Objectives
  38. True or False:

    Good financial performance by itself is enough.
    False
  39. A company's financial performance measures are really ________ ____________ that reflect the results of past decisions and organizational activities.
    Lagging Indicators
  40. The best and most reliable ___________ ___________ of a company's future financial performance and business prospects are strategic outcomes that indicate whether the company's competitiveness and market position are stronger or weaker.
    Lagging Indicators
  41. The most widely used framework of this sort is known as the ___________ _____________.
    Balanced Scorecard
  42. Company objectives need to be broken down into __________ _______ for each of the organization's separate business, product lines, functional departments, and individual work units.
    Performance Targets
  43. Objective setting is thus a ____-______ process that must extend to the lowest organizational levels.
    Top-Down
  44. The task of stitching a strategy together entails addressing a series of "_____".
    Hows
  45. _______ ____________ is called for in choosing among the various strategic alternatives and in proactively searching for opportunities to do new things or to do existing things in new or better ways.
    Astute Entreprenuership
  46. The _____ _________ ______ (_ _ _), as captain of the ship, carries the mantles of chief direction setter, chief objective setter, chief strategy maker, and chief strategy implementer for the total enterprise.
    Chief Executive Officer (CEO)
  47. Ultimate responsibility, for leading the strategy making, strategy-executing process rests with the _ _ _.
    CEO
  48. Other _______ _________-business unit heads, the chief financial officer, and vice presidents for production, marketing, and other functional departments have influential strategy-making roles and help fashion the chief strategy components.
    Senior Executives
  49. __-___-_____ managers who oversee specific operating units can be reliably counted on to have more detailed command of the strategic issues and choices for the particular operating unit under their supervision--knowing the prevailing market and competitive conditions, customer requirements and expectations, and all the other relevant aspects affecting the several strategic options available.
    On-the-scene
  50. _______ ________ is orchestrated by the CEO and other senior executives and establishes an overall strategy for managing a set of businesses in a diversified, multibusiness company.
    Corporate Strategy
  51. _________ ________ is concerned with strengthening the market position, building competitive advantage, and improving the performance of a single line of business unit.
    Business Strategy
  52. ________-____ __________ concern the approaches employed in managing particular functions within a business--like research and development (R&D), production, procurement of inputs, sales and marketing, distribution, customer service, and finance.
    Functional-area strategies
  53. __________ _______ concern the relatively narrow approaches for managing key operating units and specific operating activities with strategic significance.
    Operating Strategies
  54. A company's ________ ____ lays out its future direction, business purpose, performance targets, and strategy.
    Strategic plan
  55. Converting _________ _____ into actions and results tests a manager's ability to direct organizational change, motivate employees, build and strengthen competitive capabilities, create and nurture a strategy-supportive work climate, and meet or beat performance targets.
    Strategic Plans
  56. In most situations, managing the _______ ________ ________ includes the following principal aspects:
    Creating a strategy-supporting structure
    Staffing the organization to obtain needed skills and expertise
    Developing and strengthening strategy-supporting resources and capabilities
    Allocating ample resources to the activities critical to strategic success.
    Ensuring that policies and procedures facilitate effective strategy execution
    Organizing the work effort along the lines of best practice
    Installing information and operating systems that enable company personnel to perform essential activities
    Motivating people and tying rewards directly to the achievement of performance objectives
    Creating a company culture conducive to successful strategy execution
    Exerting the internal leadership needed to propel implementation forward
    Strategy Execution Process
  57. The ______ component of the strategy management process---monitoring new external developments, evaluating the company's progress, and making corrective adjustments---is the trigger point for deciding whether to continue or change the company's vision and mission, objectives, strategy, and/or strategy execution methods.
    Fifth
  58. A company's _______ ___ _______ has four important obligations to fulfill:
    1 Oversee the company's financial accounting and financial reporting practices
    2 Critically appraise the company's direction, strategy, and business approaches.
    3 Evaluate the caliber of senior executives' strategic leadership skills.
    4 Institute a compensation plan for top executives that rewards them for actions and results that serve shareholder interests.
    Board of Directors
  59. In essence, the job of a strategist is to understand and cope with competition.
    Michael Porter
  60. Every company operates in a broad "_____-_______" that comprises six principal components:
    political factors
    economic conditions in the firm's general environment
    sociocultural forces
    technological factors
    environmental factors
    legal/regulatory factors.
    Macro-Environment
  61. An analysis of the impact of these factors is often referred to as _______ analysis, an acronym that serves as a reminder of the six components involved.
    PESTEL
  62. P
    E
    S
    T
    E
    L
    • Political
    • Economic
    • Social
    • Technological
    • Environmental
    • Legal/Regualtory
  63. Since macro-economic factors affect different industries in different ways and to different degrees, it is important for managers to determine which of these represent the most __________ _______ ________ outside the firm's industry boundaries.
    Strategically Relevant Factors
  64. By ________ _________ we mean important enough to have a bearing on the decisions the company ultimately makes about its long-term direction, objectives, strategy, and business model.
    Strategically Relevant
  65. The most powerful and widely used tool for diagnosing the principal competitive pressures in a market is the ____ _____ ___________.
    Five Forces Framework
  66. The ____ ______ __________ includes:
    competition from rival sellers
    Competition from potential new entrants to the industry
    competition from producers of substitute products
    Supplier bargaining power
    Customer bargaining power
    Five Forces Framework
  67. ________ increases when buyer demand is growing slowly or declining
    Rivalry
  68. ________ increases as it becomes less costly for buyers to switch brands.
    Rivalry
  69. _______ increases as the products of rival sellers become less strongly differentiated.
    Rivalry
  70. _______ is more intense when there is excess supply or unused production capacity, especially if the industry's product has high fixed costs or high storage costs.
    Rivalry
  71. _______ intensifies as the number of competitors increases and they become more equal in size and capability.
    Rivalry
  72. ________ becomes more intense as the diversity of competitors increases in terms of long-term directions, objectives, strategies, and countries of origin.
    Rivalry
  73. _______ is stronger when high exit barriers keep unprofitable firms from leaving the industry.
    Rivalry
  74. Industry incumbents enjoy large cost advantages over ________ _______.
    Potential Entrants
  75. The cost advantages of industry incumbents can stem from
    (1) ______ ________ in production, distribution, advertising, or other activities
    (2) the learning-based cost savings that accrue from experience in performing certain activities such as manufacturing or new product development or inventory management.
    (3) Cost-savings accruing from patents or proprietary technology
    (4) exclusive partnerships with the best and cheapest suppliers of raw materials and components
    (5) favorable locations
    (6) low fixed costs
    Scale Economies
  76. ______ _________ are high under the following conditions:
    (1) Industry incumbents enjoy large cost advantages over potential entrants
    (2) Customers have strong brand preferences and high degrees of loyalty to seller
    (3) Patents and other forms of intellectual property protection are in place
    (4) There are strong "network effects" in customer demand
    (5) Capital requirements are high
    (6) There are difficulties in building a network of distributors/dealers or in securing adequate space on retailers' shelves
    (7) There are restrictive regulatory policies
    (8) There are restrictive trade policies.
    Entry Barriers
  77. _________ _________ are stronger when:
    (1) Good substitutes are readily available and attractively priced
    (2) Buyers view the substitutes as comparable or better in terms of quality, performance, and other relevant attributes
    (3) The costs that buyers incur in switching to the substitutes are low
    Competitive Pressures
  78. ________ _______ is stronger when:
    (1) Demand for suppliers' products is high and the products are in short supply
    (2) Suppliers provide differentiated inputs that enhance the performance of the industry's product
    (3) It is difficult or costly for industry members to switch their purchases from one supplier to another
    (4) The supplier industry is dominated by a few large companies and it is more concentrated than the industry it sells to
    (5) Industry members are incapable of integrating backward to self-manufacturing items they have been buying from suppliers
    (6) Suppliers provide an item that accounts for no more than a small fraction of the costs of the industry's product
    (7) Good substitutes are not available for the suppliers' products
    (8) Industry members are not major customers of suppliers
    Supplier Power
  79. ______ ___________ _______ is stronger when:
    (1) Buyer demand is weak in relation to industry supply
    (2) Industry goods are standardized or differentiation is weak
    (3) Buyers' costs of switching to competing brands or substitutes are relatively low
    (4) Buyers are large and few in number relative to the number of sellers
    (5) Buyers pose a credible threat of integrating backward into the business of sellers
    (6) buyers are well informed about sellers' products, prices, and costs
    (7) Buyers have discretion to delay their purchases or perhaps even not make a purchase at all
    Buyer bargaining Power
  80. The following factors increase buyer price sensitivity and result in _________ competitive pressures on the industry as a result:
    (1) Buyer price sensitivity increases when buyers are earning low profits or have low income.
    (2)Buyers are more price-sensitive if the product represents a large fraction of their total purchase
    Greater
  81. ____________ are the producers of complementary products, which are products that enhance the value of the focal firm's products when they are used together.
    Complementors
  82. _______-______ analysis has three steps:
    (1) identifying what the driving forces are
    (2) assessing whether the drivers of change are, on the whole, acting to make the industry more or less attractive
    (3) determining what strategy changes are needed to prepare for the impact of the driving forces
    Driving-Forces
  83. Most drivers of industry and ___________ _____ fall into one of the following categories:
    (1) Changes in an industry's long-term growth rate
    (2) Increasing globalization
    (3) Emerging new Internet capabilities and applications
    (4) Shifts in buyer demographics
    (5) Technological change and manufacturing process innovation
    (6) Product innovation
    (7) Entry or exit of major firms
    Diffusion of technical know-how across companies and countries
    (8) Changes in cost and efficiency
    (9) Reductions in uncertainty and business risk
    (10) Regulatory influences and government policy changes
    (11) Changing societal concerns, attitudes, and lifestyles
    Competitive Change
  84. _________ _______ are the major underlying causes of change in industry and competitive conditions.
    Driving Forces
  85. The second step in _______-______ analysis is to determine whether the prevailing change drivers, on the whole, are acting to make the industry environment more or less attractive.
    Driving-Forces
  86. The third step in the _______ _______ of industry dynamics---where the real payoff for strategy making comes---- is for managers to draw some conclusions about what strategy adjustments will be needed to deal with the impacts of the driving forces.
    Strategic Analysis
  87. ________ ______ __________ is a technique for displaying the different market or competitive positions that rival firms occupy in the industry.
    Strategic Group Mapping
  88. A __________ _______ consists of those industry members with similar competitive approaches and position in the market.
    Strategic Group
  89. The procedure for constructing a _______ _____ ____ is straightforward:
    (1) Identify the competitive characteristics that delineate strategic approaches used in the industry
    (2) Plot the firms on a two-variable map using pairs of these variables
    (3) Assign firms occupying about the same map location to the same strategic group
    (4)Draw circles around each strategic group, making the circles proportional to the size of the group's share of total industry sales revenue.
    Strategic Group Map
  90. True or False

    Strategic group maps are revealing in several respects. The most important has to do with identifying which industry members are close rivals and which are distant rivals.
    True
  91. Michael Porter's _________ for ___________ ________ points to four indicators of a rival's likely strategic moves and counter-moves.
    Framework for Competitor Analysis
  92. Many companies also have a ___________ ___________ ______ that sifts through the available information to construct up to date strategic profits of rivals.
    Competitive Intelligence Unit
  93. ____ ___________ ______ are the strategy elements, product and service attributes, operational approaches, resources and competitive capabilities that are essential to surviving and thriving in the industry.
    Key Success Factors
  94. True or false:

    As a general proposition, the anticipated industry environment is fundamentally attractive if it presents a company with good opportunity for above-average profitability; the industry outlook is fundamentally unattractively if a company's profit prospects are unappealingly low.
    True
  95. The three best indicators of how well a ____________ _________ is working are (1) whether the company is achieving its stated financial and strategic objectives, (2) whether its financial performance is above the industry average, and (3) whether it is gaining customers and increasing its market share.
    Company's Strategy
  96. A company's resources and capabilities represent its _________ _____ and are determinants of its competitiveness and ability to succeed in the marketplace.
    Competitive Assets
  97. __________ and ________ analysis is a powerful tool for sizing up a company's competitive assets and determining whether the assets can support a sustainable competitive advantage over market rivals.
    Resource and Capability
  98. A ________ is a competitive asset that is owned or controlled by a company.
    Resources
  99. A _______ or _________ is the capacity of a firm to perform some internal activity competently.
    Capability or Competence
  100. True or False

    It is not important to remember that it is not exactly how a resource is categorized that matters but, rather, that all of the company's different types of resources are included in the inventory.
    False
  101. True or False

    The real purpose of using categories in identifying a company's resources is to ensure that none of a company's resources go unnoticed when sizing up the company's competitive assets.
    True
  102. A _______ ______ is a linked and closely integrated set of competitive assets centered around one or more cross-functional capabilities.
    Resource Bundle
  103. The _ _ _ _ _______ for _________ _________ __________ ask whether a resource is:
    Valuable
    Rare
    Inimitable
    Nonsubstitutable
    VRIN tests for Sustainable Competitive Advantage
  104. _____ __________ and casual ambiguity are two factors that inhibit the ability of rivals to imitate a firm's most valuable resources and capabilities.
    Social Complexity
  105. ______ _______ makes it very hard to figure out how a complex resource contributes to competitive advantage and therefore exactly what to imitate.
    Casual Ambiguity
  106. A ________ ___________ is an ongoing capacity of a company to modify its existing resources and capabilities or create new ones.
    Dynamic Capability
  107. SWOT Analysis stand for:
    • Strengths
    • Weaknesses
    • Opportunities
    • Threats
  108. _ _ _ _ ______ is a simple but powerful tool for sizing up a company's strengths and weaknesses, its market opportunities, and the external threats to its future well-being.
    SWOT analysis
  109. A _________ is an activity that a company has learned to perform with proficiency---a capability, in other words.
    Competence
  110. A _____ ________ is an activity that a company performs proficiently and that is also central to its strategy and competitive success.
    Core Competence
  111. A _______ ________ is a competitively important activity that a company performs better than its rivals--it thus represents a competitively superior internal strength.
    Distinctive Competence
  112. A company's _______ represent its competitive assets; its __________ are shortcomings that constitute competitive liabilities.
    • Strengths
    • Weaknesses
  113. The two most important parts of a _ _ _ _ _______ are drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into strategic actions to better match the company's strategy to its internal strengths and market opportunities to correct important weaknesses, and to defend against external threats.
    SWOT analysis
  114. A company's ________ _________ should always serve as the basis of its strategy-placing heavy reliance on a company's best competitive assets is the soundest route to attracting customers and competing successfully against rivals.
    Internal Strengths
  115. All the various activities that a company performs internally combine to form a ______ ______--so called because the underlying intent of a company's activities is ultimately to create value for buyers.
    Value Chain
  116. A company's _____ ______ identifies the primary activities and related support activities that create customer value.
    Value Chain
  117. ______ ________ analysis facilitates a comparison of how rivals, activity by activity, deliver value to customers.
    Value Chain
  118. ___________ is a potent tool for improving a company's own internal activities that is based on learning how other companies perform them and borrowing their "best practices".
    Benchmarking
  119. ___________ entails comparing how different companies perform various value chain activities--how materials are purchased, how inventories are managed, how products are assembled, how fast the company can get new products to market, how customer orders are filled and shipped--and then making cross-company comparisons of the costs and effectiveness of these activities.
    Benchmarking
  120. The means to enhancing __________ through activities at the forward end of the value chain system include (1)engaging in cooperative advertising and promotions with forward allies, (2) creating exclusive arrangements with downstream sellers or utilizing other mechanisms that increase their incentives to enhance delivered customer value, and (3) creating and enforcing standard for downstream activities and assisting in training channel partners in business practices.
    Differentiation
  121. Step 1 in doing a _______ ________ _________ is to make a list of the industry's key success factors and other telling measures of competitive strength or weakness.
    Competitive Strength Analysis
  122. Step 2 is to assign weights to each of the measures of competitive strength based on their ________ __________.
    Perceived Importance
  123. Step 3 is to calculate ______ ________ _______ by sorting each competitor on each strength measure and multiplying the assigned rating by the assigned weight.
    weighted strength ratings
  124. Step 4 is to sum the weighted strength ratings on each factor to get an _______ __________ of competitive strength for each company being rated.
    Overall Measure
  125. Step 5 is to use the ________ __________ _______ to draw conclusions about the size and extent of the company's net competitive advantage or disadvantage and to take specific note of areas of strength and weakness.
    Overall Strength Ratings
  126. True or False

    The higher a company's overall weighted strength rating, the weaker its overall competitiveness versus rivals.
    False
  127. The final and most important analytic step is to zero in on exactly what strategic issues company managers _____ ___ ________ for the company to be more financially and competitively successful in the years ahead.
    Need To Address
  128. The "______ ____" of issues and problems that have to be wrestled with can include such things as how to stave off market challenges from new foreign competitors, how to combat the price discounting of rivals, how to reduce the company's high costs, how to sustain the company's present rate of growth in light of slowing buyer demand, whether to correct the company's competitive deficiencies by acquiring a rival company with the missing strengths, whether to expand into foreign markets, whether to reposition the company and move to a different strategic group, what to do about growing buyer interest in substitute products, and what to do to combat the aging demographics of the company's customer base.
    Worry List
Author:
JennaLin94
ID:
315576
Card Set:
Strategy Exam I
Updated:
2016-02-11 04:01:16
Tags:
Business Strategy
Folders:
Business Strategy
Description:
Exam I over Chapters 1 through 4
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