Ch. 5

type of business strategy with HI market share and LO market growth; makes huge profits, invest minimum amount needed to keep market share, have brand loyal customers that don't need a lot of advertising to keep market shares, is a stable growth strategy

cash cow business strategy

these are the business that you want to own and operate them under one strategy

corporate level strategy

Porter Generic Strategy that increases sales by minimizing the cost per unit and your prices

cost leadership

Porter Generic Strategy that concentrates your efforts on a specific audience

focus

What is the goal of the Business Portfolio Matrix Approach?

own the mix of business that will maximize market share and profitability

demand growing, expansion- new venture or star; development; innovative; few rules and regulations

prospector

reacts to environment; no set strategy; no set production process or organization design; inefficient and worst strategy

reactor

how to spend your resources to achieve the goals

resource deployment

decides where the organization is going to compete; the strategy you set should decide which range of markets you want to do business in

scope

What are the 4 components of a well-thought out strategy?

scope, resource development, distinctive competence, synergy

In the BCG matrix, if a company has a high share of a high growth market it is classified as a ___.

star

A prospector strategy is like what strategy in the BCG matrix?

star and new venture

type of business strategy with HI market share and HI market growth; invest all of your money to grow market share before it matures. costs are high, but gaining market share down the line, if we have it we will be profitable

star business strategy

What is the basic idea behind the Adaption model of strategy?

strategy must be aligned with it's environment for it to be effective

different aspects of the company complement each others to make one another better

synergy

type of business strategy with LO market share and HI market growth; if you think it could become a star, invest hazily. If you forecast negative outcomes, get rid of it

New Venture

Life-Cycle of business strategy:

New Venture -> Star -> Cash Cow -> Dog (when a dog is fading out, use money to invest in a new venture)

Which of the following would be excluded from your business portfolio

None- you would want all types of business strategies

SBUs or businesses we own

Strategic Business Units

environment moderately changing

analyzer

How are SBUs classified in the Business Portfolio Matrix Approach?

based on market share (x-axis) and market growth (y-axis) and therefore, will determine how we deal with them

What levels of strategy does the Business Portfolio Matrix Approach deal with?

both corporate and business level

this is how you plan on competing with each business, can have multiple strategies

business level strategy

demands products not growing- cash cows; stable environment; efficient production; lots of rules and regulations

defender

How are the strategies in the Business Portfolio Matrix Approach and the Adaption Model of Strategy related to one another?

defender- cash cow prospector- new venture and star analyzer- cash cow, new venture and star reactor- dog, not all though

Porter Generic Strategy that makes an image that your product is different than all others so you can demand a high price

differentiation

What are the 3 Generic Strategies identified by Porter?

differentiation, cost leadership and focus

a company's competitive advantage is synonymous with what component of strategy?

distinctive competence

competitive advantage; your strategy is built on the strength that sets you off from competition

distinctive competence

in the BCG matrix, what business-level strategy would one select for a dog that is not profitable?

divestment

type of business strategy with LO market share and LO market growth; keep them if they are profitable, but as soon as they start to loose money, get rid of them

dog business strategy

What is the focus of strategic planning?

establish and maintain a positive long-term relationship with the external environment

How does each strategy type in the Adaption Model Answer the entrepreneurial engineering and administrating questions?

omit

___ have wider scope

organizations