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Strategic Planning MidTerm
Terms in this set (63)
_____ is best described as an integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage
EnviroFit had a mission to become the leading producer of environmentally friendly blue jeans, an emerging and in-demand category in the apparel industry. Its strategy involved leveraging a network of organic cotton farmers and suppliers of environmentally responsible synthetic materials to create a product that is durable, outdated production facilities, EnviroFit could not assemble its products as a low-enough cost to offer the jeans at a price that was attractive to customers. EnviroFit strategy failed because ______?
(not a good strategy)?
What does it mean to have competitive parity?
If two or more firms perform at the same level, they have this.
A firm that achieves superior performance relative to other firms in the same industry or the industry average has a(n) ______.
Identify what it means to have a sustainable competitive advantage
A firm that is able to outperform its competitors or the industry average over a prolonged period
Underperformance relative to other firms in the same industry or the industry average results in a(n) ______ for a firm.
Identify the phrase that represents the vision Wendy Kopp developed for Teach for America.
"One day, all children in this nation will have the opportunity to attain an excellent education"
Summarize the difference between a firm's vision and mission.
*Vision: what an organization wants to accomplish ultimately
*Mission: Describes what an organization does, how the vision is accomplished and is often introduced with the preposition "by"
Why is it better for firms to keep their vision statements customer-oriented rather than product-oriented?
Customer needs may change and the means of meeting those needs may change with it
Organizational core values are the _____ that govern the behavior of individuals within a firm or organization.
ethical standards and norms
Strategic Leadership pertains to the use of power and influence by ____ to direct the activities of others when pursuing an organization's goals.
Be able to identify a person on the level-5 pyramid (pg. 35).
*Level 1: Highly Capable Individual: makes productive contributions through motivation, talent, knowledge, and skills
*Level 2: Contributing Team Member: uses high level of individual capability to work effectively with others in order to achieve team objectives
*Level 3: Competent Manager: is efficient and effective in organizing resources to accomplish stated goals and objectives. Does things right.
*Level 4: Effective Leader: presents compelling vision and mission to guide groups toward superior performance. Does the right things.
*Level 5: Executive: builds enduring greatness through a combination of willpower and humility
What is the difference between corporate strategy and business strategy?
Corporate strategy: concerns questions relating to where to compete as to industry, markets, and geography
Business Strategy: concerns the question of how to compete. Three generic business strategies include: cost leadership, differentiation, or value innovation.
Sam's Club is a _____ of Walmart.
strategic business unit?
What is an assumption that top-down strategic planning rests on?
we can predict the future from the past?
The executives at White Couture Inc. are developing strategic plans to address plausible future situations like rise in the prices of cotton and synthetic fabrics by 30%, appreciation in the value of the dollar, increase in the cost of labor by 40%, and increase in demand for the company's products. By doing so, the company will be well prepared with its planned responses if any of these situations occurs in the future. Thus, White Couture is employing ______ as the approach to the development of strategy.
Unexpected events that are highly improbable but lead to changes can best be described as a(n) _______ event.
scenario planning?/emergent strategy/ serendipity?
The production head at the AGP Paint Company would frequently stay back after office hours and experiment with new color combinations even though this was part of the new product development team's job. As a result of these experiments, he came up with two new interior paint colors, foggy morning and mint julep. The new colors proved popular among test groups, and quickly became some of AGP's best-selling products. Which of the following strategies does this scenario best illustrate?
strategy of planned emergence
The interaction between a firm and its diverse internal and external stakeholders is best described as a(n) _________.
In the pyramid of corporate social responsibility, ________ responsibilities are the foundational building block.
The _______ allows the scanning, monitoring, and evaluating of changes and trends in a firm's macro environment.
In a firm's external environment, ________ primarily capture population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class.
What is the difference between industry and firm effects.
Industry Effects: attribute firm performance to the industry in which the firm competes; describes the underlying economic structure of the industry
Firm effects: attribute firm performance to the actions strategic leaders take
What does the graph on page 84 look like?
The graph shows the differences on a scale from perfect competition to monopoly and the features of each
the industry is fragmented and has many small firms, a commodity product, ease of entry, and little or no ability for each individual firm to raise its prices
industry has many firms, a differentiated product, some obstacles to entry, and the ability to raise prices for a relatively unique product while retaining customers
industry is consolidated with a few large firms, differentiated products, high barriers to entry, and some degree of pricing power
when there is only one, often large firm supplying the market
Attempts by McDonald's, Burger King and Wendy's to steal customers from one another include frequent discounting tactics such as dollar menus. Such competitive actions are indicative of what type of competition?
Power of suppliers / buyers?
Samsung and Google cooperate as compementors to compete against Apple's strong position in the mobile device industry, while at the same time Samsung and Google are increasingly becoming competitive with one another. This scenario best illustrates the process of _____________.
Power of suppliers / buyers?
What is likely due to happen to horizontal mergers between competitors such as Delta and Northwest Airlines?
The increase of buying power? (pg 80)
Companies in the same strategic groups are __________ to each other.
What is the drawback of Porter's five forces model?
it is static
What are the main reasons for the success of Beats Headphones?
What is the difference between Tangible resources and Intangible Resources?
Tangible: visible, physical attributes
Intangible: invisible, no physical attributes
assumption in the resource-based view that a firm is a bundle of resources and capabilities that differ across firms
a firm has resources that tend to be "sticky" and that do not move easily from firm to firm
What is the VRIO framework?
A firm can gain and sustain a competitive advantage only when it has resources that satisfy all of the VRIO criteria.
I: Imitation Costly?
O: Organized to capture value?
According to an evaluation using the VRIO framework, Crocs shoes was unable to sustain its competitive advantage primarily because its products were ______________.
Nexteer Automotive is a leading automobile company. The company has been able to sustain its competitive advantage primarily due to its high-quality and efficient electric motors. Most of its competitors have failed to develop similar electric motors at a reasonable price. Which of the following resource attributes listed in the VRIO framework has helped Nexteer Automotive sustain its competitive advantage?
An observer may conclude that the organizational culture of Zappos, an online retailer for shoes and clothing, might be the basis for its competitive advantage. However, reverse social engineering to crack Zappos' code of success might be much more difficult for a company trying to exactly imitate its strategy. Thus, the source of Zappos competitive advantage is said to be?
Both Mars Technologies and Venus Inc. incur a cost of $200 to manufacture a single unit of a cell phone. However, Saturn Technologies charges a higher price than Granite Inc. does, but it sells a higher number of phones. What does this imply?
Saturn technologies creates more economic value than Granite Inc. does.
What is the drawback of the SWOT analysis?
A strength can also be a weakness and an opportunity can also be a threat
________ precisely indicates how much of a firm's sales is converted into profits.
return in revenue
Which competitively important assets are typically excluded form a firm's balance sheet?
How do you describe market cap?
captures the total dollar market value of a company's total outstanding shares at any given point in time
(Market Cap = # of outstanding shares X share price)
___________ is best described as the difference between a buyer's willingness to pay for a product or service and a firm's total cost to produce it.
What is the drawback of Porter's five forces model?
it is static
Know how to calculate consumer surplus.
V - P
v: customer willingness to purchase
P: what you paid
____________ are best described as the value of the best forgone alternative use of the resources employed.
Which frameworks used to measure competitive advantage relies on both an internal and an external view of a firm?
What is the principle behind the triple-bottom-line?
profit, people, planet
What are the 7 popular business models?
When a firm makes choices between a cost or value position to achieve competitive advantage, it is primarily involved in __________.
offering different value not available from other companies, even though it might not be at the lowest cost
seeks to create the same or similar value for customers by offering lower cost than competitors
____________ is best described as decreases in cost per unit as output increases.
economies of scale
________ is best described as the output range needed to bring down the cost per unit as much as possible, allowing a firm to stake out the lowest-cost position that is achievable through economies of scale.
minimum efficient scale
economies of scale
What is the graph on page 194?
as output increases, cost per unit decreases
Husqvarna initially spent nine man-hours to assemble a lawnmower. But as the production doubled, the number of hours spent on assembling a mower reduced by 20%. This increase in productivity reduced the company's cost per unit. What is this phenomenon referred to as?
How did Marriott use economies of scope to achieve greater economic value than its competitors?
lowered its cost structure by sharing its product assets over several types of hotels, increased its menu and thus its differentiated appeal
combine differentiation and cost-leadership activities using value innovation to reconcile the inherent trade-offs in these two distinct strategic positions
Blue Ocean Strategy