F&B strategy and logistics final ch 5- 8
it uniquely distinguishes a company from the competition it leads customers to expect slightly less service than a company can deliver
An effective product positioning strategy meets two criteria:
business portfolio.
Autonomous divisions (also called segments or profit centers) of an organization make up what is called a David, Fred R.. Strategic Management (p. 178). Pearson Education. Kindle Edition.
Tax benefit
Capitalize on tax incentives to locate manufacturing plants to avoid high taxes in various countries.- is an example of a outsourcing
hostile takeover
If a merger or acquisition is not desired by both parties, it is called a David, Fred R.. Strategic Management (p. 150). Pearson Education. Kindle Edition.
corporate, divisional, functional, and operational
In large firms, there are four levels of strategies:
IE matrix
In the _____________ matrix, the 9 cells are split into 3 regions; Each region with its own set of strategies that are most beneficial region 1 - Grow and build 1 - I 2 - II 4 - VI region 2 - Hold and maintain 3 - III 5 - V 7 - VII region 3 - Harvest and divest 6 - VI 8 - VIII 9 - IX
place
Distribution channels Distribution coverage Outlet location Sales territories Inventory levels and locations Transportation carriers are component variables of David, Fred R.. Strategic Management (p. 248). Pearson Education. Kindle Edition.
Question Marks
Divisions in Quadrant I (upper right) in the BCG matrix have a low relative market share position, yet they compete in a high-growth industry. Generally these firms' cash needs are high and their cash generation is low. David, Fred R.. Strategic Management (p. 179). Pearson Education. Kindle Edition.
Cash Cows
Divisions in Quadrant III (lower left) in the BCG matrix have a high relative market share position but compete in a low-growth industry. David, Fred R.. Strategic Management (p. 180). Pearson Education. Kindle Edition.
Dogs
Divisions in Quadrant IV (lower right) have a low relative market share position and compete in a slow- or no-market-growth industry . David, Fred R.. Strategic Management (p. 180). Pearson Education. Kindle Edition.
related because whats app and face book are both app companies in the technology industry
Facebook acquired the text-messaging firm WhatsApp for $19 billion. is a example of what type of diversification strategy
Quadrant I
Firms located in quadrant __ of the Grand Strategy Matrix are in an excellent strategic position. David, Fred R.. Strategic Management (p. 185). Pearson Education. Kindle Edition.
tactics of facilitating strategies
First Mover Advantages Outsourcing and Reshoring are...
the First Mover
Five Benefits of a Firm Being __________ 1. Secure access and commitments to rare resources. 2. Gain new knowledge of critical success factors and issues. 3. Gain market share and position in the best locations. 4. Establish and secure long-term relationships with customers, suppliers, distributors, and investors. 5. Gain customer loyalty and commitments. David, Fred R.. Strategic Management (p. 152). Pearson Education. Kindle Edition.
retrenchment
Five guidelines for when ________________ may be an especially effective strategy to pursue are as follows: o 1. An organization has a clearly distinctive competence but has failed consistently to meet its objectives and goals over time. o 2. An organization is one of the weaker competitors in a given industry. o 3. An organization is plagued by inefficiency, low profitability, poor employee morale, and pressure from stockholders to improve performance. o 4. An organization has failed to capitalize on external opportunities, minimize external threats, take advantage of internal strengths, and overcome internal weaknesses over time; that is, when the organization's strategic managers have failed (and possibly will be replaced by more competent individuals). o 5. An organization has grown so large so quickly that major internal reorganization is needed. o (David, p. 142).
strategies David, Fred R.. Strategic Management (p. 134). Pearson Education. Kindle Edition.
Forward Integration Backward Integration Horizontal Integration Market Penetration Market Development Product Development Related Diversification Unrelated Diversification Retrenchment Divestiture Liquidation are all different types of....
The Net Worth Method The Net Income Method Price-Earnings Ratio Method Outstanding Shares Method
Four methods are often used to determine the monetary value of a company;
Forward Integration
Gaining ownership or increased control over distributors or retailers ex. when manufacturers (suppliers) create websites to sell their products directly to consumers. David, Fred R.. Strategic Management (p. 135). Pearson Education. Kindle Edition.
market development
Gap opened its first five stores in China. is an example of what type of intensive strategy
Market Segmentation David, Fred R.. Strategic Management (p. 249). Pearson Education. Kindle Edition.
Geographic demographic Psychographic Behavioral are 4 alternatives bases of... David, Fred R.. Strategic Management (p. 249). Pearson Education. Kindle Edition.
WO
Insufficient capacity + Exit of two major foreign competitors from the industry = Pursue horizontal integration by buying competitors' facilities is an example of what type of swot strategy? David, Fred R.. Strategic Management (p. 171). Pearson Education. Kindle Edition.
forward, backwards, and horizontal
Integration Strategies include
provide direction aid in evaluation establish priorities reduce uncertainty minimize conflicts aid in both the allocation of resources and the design of jobs
The Nature of Long-Term Objectives
Industry growth rate
The average annual increase in revenues for several leading firms in the industry would be a good estimate of the ______________________. Also, various sources such as the S&P Industry Surveys and www.finance.yahoo.com (click on Competitors) would provide this value. David, Fred R.. Strategic Management (p. 179). Pearson Education. Kindle Edition.
low-cost strategy and best-value strategy
Two alternative types of cost leadership strategies that are designed to target a large market are
low cost focus strategy and best-value focus strategy
Two alternative types of focus strategies that target a small market are David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
market penetration
Under Armour signed tennis champion Andy Murray to a 4-year, $23 million marketing deal. is an example of what type of intensive strategy
Conservative
________________________ SPACE strategies most often include market penetration, market development, product development, and related diversification. David, Fred R.. Strategic Management (p. 177). Pearson Education. Kindle Edition.
value chain activities
altering the plant layout, mastering newly introduced technologies, using common parts or components in different products, simplifying product design, finding ways to operate close to full capacity year-round, etc... are all examples of
Product positioning aka perceptual mapping
entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry
contract
firms use a ___________ that include financial penalties and legal redress to gain access to services preformed by other firms; which is otherwise not the case with services performed internally.
Outsourcing
involves companies hiring other companies to take over various parts of their functional operations, such as human resources, information systems, payroll, accounting, customer service, and even marketing. David, Fred R.. Strategic Management (p. 152-153). Pearson Education. Kindle Edition.
Chapter 7 bankruptcy
is a liquidation procedure used only when a corporation sees no hope of being able to operate successfully or to obtain the necessary creditor agreement. All the organization's assets are sold in parts for their tangible worth. David, Fred R.. Strategic Management (p. 142). Pearson Education. Kindle Edition.
The premium
is a per-share dollar amount that a person or firm is willing to pay beyond the book value of the firm to control (acquire) the other company.
Joint venture David, Fred R.. Strategic Management (p. 148). Pearson Education. Kindle Edition.
is a popular strategy that occurs when two or more companies form a temporary partnership or consortium for the purpose of capitalizing on some opportunity.
Reduce time to market:
is a potential outsourcing benefit that refers to Accelerating development or production of a product through additional capability brought by the supplier
Chapter 13
is a reorganization plan similar to Chapter 11 available only to small businesses owned by individuals with unsecured debts of less than $100,000 and secured debts of less than $350,000; the debtor is allowed to operate the business while a plan is being developed to provide for the successful operation of the business in the future. David, Fred R.. Strategic Management (p. 142). Pearson Education. Kindle Edition.
portfolio matrices.
is a stretgic managment tool that involve plotting a firm's divisions in a schematic diagram; ex. include The IE Matrix and the BCG Matrix David, Fred R.. Strategic Management (p. 181). Pearson Education. Kindle Edition.
Relative market share position (RMSP)
is an element of the BCG matrix, defined as the ratio of a division's own market share (or revenues) in a particular industry to the market share (or revenues) held by the largest rival firm in that industry. David, Fred R.. Strategic Management (p. 178). Pearson Education. Kindle Edition.
Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix
is an important matching tool that helps managers develop four types of strategies: David, Fred R.. Strategic Management (p. 171). Pearson Education. Kindle Edition.
cost leadership strategy
is evidenced by high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, wide spans of control, rewards linked to cost containment, and broad employee participation in cost control efforts. David, Fred R.. Strategic Management (p. 146). Pearson Education. Kindle Edition.
Relative market share position
is given on the x-axis of the BCG Matrix. The midpoint on the x-axis usually is set at 0.50, corresponding to a division that has half the market share of the leading firm in the industry.
Internet advertising
is growing so rapidly that marketers are more and more allowed to create bigger, more intrusive ads that take up more space on the web page
Reshoring
is the new term that refers to U.S. companies planning to move some of their manufacturing back to the United States. David, Fred R.. Strategic Management (p. 153). Pearson Education. Kindle Edition.
PE acquisitions
is to buy firms at a low price and sell them later at a high price
type 2 best-value strategy
ithat offers products or services to a wide range of customers at the best price-value available on the market. aims to offer customers a range of products or services at the lowest price available compared to a rival's products with similar attributes. David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
QSPM
limitation of the ____________ matrix includes Always requires intuitive judgments and educated assumptions Only as good as the prerequisite information and matching analyses upon which it is based
Defensive Quadrant
lower left quadrant of the SPACE Matrix suggests the firm should focus on improving internal weaknesses and avoiding external threats. David, Fred R.. Strategic Management (p. 177). Pearson Education. Kindle Edition.
Competitive Quadrant
lower right quadrant of the SPACE Matrix, indicating competitive strategies. David, Fred R.. Strategic Management (p. 177). Pearson Education. Kindle Edition.
managing by subjectives
management strategy Built on the idea that there is no plan! Just do your best the way you know it!
Managing by Crisis
management strategy that is reacting rather than acting
managing by hoping
management strategy where Decisions are predicted on the hope.....
cost leadership, differentiation, focus. David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
porter identifies generic strategies that allow organizations to gain competitive advantage from three different bases:
type 1: cost leadership - low cost strategy type 2: cost leadership - best value strategy type 3: differentiation strategy type 4: focus - low cost strategy type 5: focus - best value strategy
porters 5 generic strategies types are
Internal-External (IE) Matrix
positions an organization's various divisions (segments) in a nine-cell display, cell 1 - I cell 2 - II cell 3 - III cell 4 - IV cell 5 - V cell 6 - VI cell 7 - VII cell 8 - VIII cell 9 - IX David, Fred R.. Strategic Management (p. 181). Pearson Education. Kindle Edition.
QSPM
positive features of the _______________ matrix are Sets of strategies can be examined sequentially or simultaneously Requires strategists to integrate pertinent external and internal factors into the decision process Can be adapted for use by small and large for-profit and nonprofit organizations
outsourcing
potential benifits of ______________ includes... 1. Cost savings 2. Focus on core business 3. Cost restructuring 4. Improve quality 5. Knowledge 6. Contract 7. Operational expertise 8. Access to talent 9. Catalyst for change 10. Enhance capacity for innovation: 11. Reduce time to market 12. Risk management 13. Tax benefit David, Fred R.. Strategic Management (p. 153). Pearson Education. Kindle Edition.
intensive strategy
referring to the grand strategy matrix, orgenizations positioned in Quadrant II are in a rapid market growth industry, so an _______________ strategy is usually the first option that should be considered.
Operational expertise
refers to a benefit of outsourcing where a firm Gains access to the outsourced firm's operational strengths that would be too difficult or time consuming to develop in-house.
financial position (FP).
return on investment, leverage, liquidity, working capital, and cash flow are commonly considered to be determining factors of an organization's
cost-producing activities
securing new suppliers or distributors, selling products online, relocating manufacturing facilities, avoiding the use of union labor, etc.. areall examples of
specific, actionable, and divisional terms
strategies should always be written in ____________, ________________, and _______________ terms
Market Segmentation
subdividing of a market into distinct subsets of customers according to needs and buying habits; widely used in implementing strategies
Purpose-Based Marketing
suggests that the best way to sell in a weak economy is to "show customers how they can improve their lives" with your product or service; building trust and an emotional connection to the customer is needed in order to differentiate your product or service
De-integration
term that describes when a business seeks out a larger number of suppliers rather than looking to own or further control one supplier. makes sense in industries that have global sources of supply. David, Fred R.. Strategic Management (p. 136). Pearson Education. Kindle Edition.
related and unrelated
the 2 types of general diversification strategies are
SO (strengths-opportunities) strategies, WO (weaknesses-opportunities) strategies, ST (strengths-threats) strategies, and WT (weaknesses threats) strategies.
the 4 strategies in the swot analysis are
forward
the following are guide lines that indicate when _________ integration may be especially effective 1. An organization's present distributors are especially expensive, unreliable, or incapable of meeting the firm's distribution needs. 2. The availability of quality distributors is so limited as to offer a competitive advantage to those firms that promote this type of integration. 3. An organization competes in an industry that is growing and is expected to continue to grow markedly; this is a factor because this type of integration reduces an organization's ability to diversify if its basic industry falters. 4. An organization has both the capital and human resources needed to manage the new business of distributing its own products. 5. The advantages of stable production are particularly high; this is a consideration because an organization can increase the predictability of the demand for its output 6. Present distributors or retailers have high profit margins; suggesting the company could profitably distribute
What a firm owns What a firm earns What a firm will bring in the market
what are the 3 approaches of Evaluating the Worth of a Business
Stage 1 - Input Stage stage 2 - matching stage stage 3 - decision stage
what are the 3 stages for Comprehensive strategy-formulation analytical framework
product, place, promotion, and price
what are the 4 basic components of the marketing mix
catalyst for change
when a firm Uses an outsourcing agreement to induce a major shift that produces a significant benefit to the firm that could not otherwise be achieved by the firm alone
Aggressive Quadrant
when a firm's directional vector is located in the __________ of the SPACE Matrix (upper right), an organization is in an excellent position to use its internal strengths to (1) take advantage of external opportunities, (2) overcome internal weaknesses, and (3) avoid external threats. David, Fred R.. Strategic Management (p. 175). Pearson Education. Kindle Edition.
product development
· These following five guidelines indicate when ___________________ may be an especially effective strategy to pursue:10 o 1. An organization has successful products that are in the maturity stage of the product life cycle; the idea here is to attract satisfied customers to try new (improved) products as a result of their positive experience with the organization's present products or services. o 2. An organization competes in an industry that is characterized by rapid technological developments. o 3. Major competitors offer better-quality products at comparable prices. o 4. An organization competes in a high-growth industry. o 5. An organization has especially strong research and development capabilities. o David, Fred R.. Strategic Management (p. 139). Pearson Education. Kindle Edition.
governance
"principles of good _____________": 1. Never have more than two of the firm's executives (current or past) on the board. 2. Never allow a firm's executives to serve on the board's audit, compensation, or nominating committee. 3. Require all board members to own a large amount of the firm's equity. 4. Require all board members to attend at least 75 percent of all meetings. 5. Require the board to meet annually to evaluate its own performance, without the CEO, COO, or top management in attendance. 6. Never allow the CEO to be chairperson of the board. 7. Never allow interlocking directorships (where a director or CEO sits on another director's board).
divestiture
Sears Holdings divested its Land's End division to Sears' shareholders. is an example of what type of defensive strategy
Horizontal Integration
Seeking ownership of or increased control over a firm's competitors
Backward Integration
Seeking ownership or increased control of a firm's suppliers
product development strategy
Seeks increased sales by improving or modifying present products or services
Divestiture strategy
Selling a division or part of an organization often used to raise capital for further strategic acquisitions or investments
retrenchment, divestiture, and liquidation
defensive strategies include
Cost leadership
emphasizes producing standardized products at a low per-unit cost for consumers who are price sensitive. (David, p. 144)
Reasons Why Many Mergers and Acquisitions Fail
1. Integration difficulties 2. Inadequate evaluation of target 3. Large or extraordinary debt 4. Inability to achieve synergy 5. Too much diversification 6. Managers overly focused on acquisitions 7. Too large an acquisition 8. Difficult to integrate different organizational cultures 9. Reduced employee morale due to layoffs and relocations David, Fred R.. Strategic Management (p. 150). Pearson Education. Kindle Edition.
Having Clear Objectives David, Fred R.. Strategic Management (p. 132). Pearson Education. Kindle Edition.
1. Provide direction by revealing expectations 2. Allow synergy 3. Assist in evaluation by serving as standards 4. Establish priorities 5. Reduce uncertainty 6. Minimize conflicts 7. Stimulate exertion 8. Aid in allocation of resources 9. Aid in design of jobs 10. Provide basis for consistent decision making are benefits of...
choose Not to Disclose Financial Information by Segment (by Division)
1. Rival firms can obtain free competitive information. 2. Performance failures can be hidden. 3. Rivalry among segments can be reduced. are 3 reasons why firms David, Fred R.. Strategic Management (p. 178). Pearson Education. Kindle Edition.
choose to Disclose Financial Information by Segment (by Division)
1. Transparency is a good thing in today's world of Sarbanes-Oxley Act of 2002. 2. Investors will better understand the firm, which can lead to greater support. 3. Managers and employees will better understand the firm, which should lead to greater commitment. 4. Disclosure enhances the communication process both within the firm and with outsiders. are 4 reasons why firms... David, Fred R.. Strategic Management (p. 178). Pearson Education. Kindle Edition.
Projected Financial Statements
9\allows an organization to examine the expected results of various actions and approaches and allows an organization to compute projected financial ratios under various strategy-implementation scenarios
low-cost (Type 4) or best-value (Type 5) focus strategy
A ____________ or _________ strategy can be especially attractive under these conditions 1. The target market niche is large, profitable, and growing. 2. Industry leaders do not consider the niche to be crucial to their own success. 3. Industry leaders consider it too costly or difficult to meet the specialized needs of the target market niche while taking care of their mainstream customers. 4. The industry has many different niches and segments, thereby allowing a strategist to pick a competitively attractive niche suited to its own resources. 5. Few, if any, other rivals are attempting to specialize in the same target segment. (David, p. 147- 148).
Type 3 differentiation
A _____________strategy can be especially effective under the following four conditions 1. There are many ways to differentiate the product or service and many buyers perceive these differences as having value. 2. The buyer's needs and uses are diverse. 3. Few rival firms are following a similar differentiation approach. 4. Technological change is fast paced and competition revolves around rapidly evolving product features. David, Fred R.. Strategic Management (p. 147). Pearson Education. Kindle Edition.
Promotion
Advertising Personal selling Sales promotion Publicity are component variables of David, Fred R.. Strategic Management (p. 248). Pearson Education. Kindle Edition.
Demographic
Age- Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 65+ Gender- Male, female Family Size- 1-2, 3-4, 5+ Family Life Cycle- Young, single; young, married, no children; young, married, youngest child under 6; young, married, youngest child 6 or over; older, married, with children; older, married, no children under 18; older, single; other Income- Under $10,000; $10,001-$15,000; $15,001-$20,000; $20,001-$30,000; $30,001-$50,000; $50,001-$70,000; $70,001-$100,000; over $100,000 Occupation- Professional and technical; managers, officials, and proprietors; clerical and sales; craftspeople; foremen; operatives; farmers; retirees; students; housewives; unemployed Education- Grade school or less; some high school; high school graduate; some college; college graduate Religion- Catholic, Protestant, Jewish, Islamic, other Race- White, Asian, Hispanic, African American Nationality- American, British, French, German, Scandinavian, Italian, Latin American, Middle Eastern, Japanese are variables and typical break downs of _______________ market segmentation
joint ventures and partnerships
Although joint __________ and _________ are increasingly preferred over mergers as a means for achieving strategies, they are not always successful, for four primary reasons: 1. Managers who must collaborate daily in operating the venture are not involved in forming or shaping the venture. 2. The venture may benefit the partnering companies but may not benefit customers, who then complain about poorer service or criticize the companies in other ways. 3. The venture may not be supported equally by both partners. If supported unequally, problems arise. 4. The venture may begin to compete more with one of the partners than the other. David, Fred R.. Strategic Management (p. 149). Pearson Education. Kindle Edition.
forward integration
Amazon beginning to offer rapid delivery services in some U.S. cities. is an example of what type of integration strategy
product development
Amazon just began offering its own line of baby diapers and wipes. is a example of what type of intensive strategy
franchising.
An effective means of implementing forward integration is ______________________Approximately 2,000 companies in about 50 different industries in the United States use it to distribute their products or services. David, Fred R.. Strategic Management (p. 135). Pearson Education. Kindle Edition.
horizontal integration
BB&T acquiring rival company Susquehanna Bancshares. is an example of what type of integration strategy
Question Marks Stars Cows Dogs
BCG matrix is divided into 4 quadrants Management (p. 179). Pearson Education. Kindle Edition.
type 5 best value focus
Bed-and-breakfast inns and local retail boutiques are examples of porters _______________ strategy David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
first mover
Being the __________ can be an excellent strategy when such actions (1) build a firm's image and reputation with buyers (2) produce cost advantages over rivals in terms of new technologies, new components, new distribution channels, and so on (3) create strongly loyal customers (4) make imitation or duplication by a rival difficult or unlikely. David, Fred R.. Strategic Management (p. 152). Pearson Education. Kindle Edition.
1. CONTROL AND OVERSIGHT OVER MANAGEMENT 2. ADHERENCE TO LEGAL PRESCRIPTIONS 3. CONSIDERATION OF STAKEHOLDERS' INTERESTS 4. ADVANCEMENT OF STOCKHOLDERS' RIGHTS
Board of Director 4 general Responsibilities include...
related and unrelated
Businesses are said to be ________ when their value chains possess competitively valuable cross-business strategic fits; businesses are said to be _________ when their value chains are so dissimilar that no competitively valuable cross-business relationships exist.11
means of achieving strategies
Cooperation Among Competitors Joint Venture/Partnering Merger/Acquisition Private-Equity Acquisitions are all means of...
Type 4 low cost focus
Examples of firms that use porters _____________ strategy include Jiffy Lube International and Pizza Hut, as well as local used car dealers and hot dog restaurants
SO
Excess working capital + Annual growth of 20 percent in the cell phone industry = Acquire Cellfone, Inc. is an example of what type of swot strategy? David, Fred R.. Strategic Management (p. 171). Pearson Education. Kindle Edition.
market development strategy
Involves introducing present products or services into new geographic areas
unrelated because wholefoods is in the retail industry and its expanding to the food and beverage hospitality industry
Kroger and Whole Foods Market are cooking meals, becoming restaurants. is a example of what type of diversification strategy
price
Level Discounts and allowances Payment terms are component variables of David, Fred R.. Strategic Management (p. 248). Pearson Education. Kindle Edition.
intensive strategies
Market penetration, market development, and product development are sometimes referred to as ___________________ __________________ because they require a lot of efforts if a firm's competitive position with existing products is to improve. David, Fred R.. Strategic Management (p. 138). Pearson Education. Kindle Edition.
related diversification
Most companies favor _____________ strategies to capitalize on synergies as follows: 1. Transferring competitively valuable expertise, technological know-how, or other capabilities from one business to another 2. Combining the related activities of separate businesses into a single operation to achieve lower costs 3. Exploiting common use of a well-known brand name 4. Cross-business collaboration to create competitively valuable resource strengths and capabilities (David, p. 139).
SPACE Matrix
Note that a ________________ matrix has some limitations: 1. It is a snapshot in time. 2. although there are only four quadrants, There are more than four dimensions that firms could/should be rated on. 3. The directional vector could fall directly on an axis, or could even go nowhere if the coordinate is (0,0). 4. Implications of the exact angle of the vector within a quadrant are unclear. 5. The relative attractiveness of alternative strategies generated is unclear. 6. Key underlying internal and external factors are not explicitly considered. David, Fred R.. Strategic Management (p. 177). Pearson Education. Kindle Edition.
quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable, and congruent among organizational units
Objectives should be:
Total Shareholders' Equity
Other terms for _________________are Total Owners' Equity or Net Worth
WT
Poor employee morale an internal weakness + Rising health-care costs = Develop a new wellness program is an example of what type of swot strategy? David, Fred R.. Strategic Management (p. 171). Pearson Education. Kindle Edition.
secondary buyouts
Private equity firms buying companies from other PE firms David, Fred R.. Strategic Management (p. 152). Pearson Education. Kindle Edition.
product
Quality Features and options Style Brand name Packaging Product line Warranty Service level Other services are component variables of David, Fred R.. Strategic Management (p. 248). Pearson Education. Kindle Edition.
IP and SP
Refering to thr SPACE matrix, On the ____ and ____ axes (left to right), make comparisons to other industries to determine if the industry your company operates in is best, worst or in between.
geographic
Region- Pacific, Mountain, West North Central, West South Central, East North Central, East South Central, South Atlantic, Middle Atlantic, New England County Size - A, B, C, D City Size- Under 5,000; 5,000-20,000; 20,001-50,000; 50,001-100,000; 100,001- 250,000; 250,001-500,000; 500,001-1,000,000; 1,000,001-4,000,000; 4,000,001 or over Density- Urban, suburban, rural Climate- Northern, southern are variables and typical break downs of _______________ market segmentation David, Fred R.. Strategic Management (p. 249). Pearson Education. Kindle Edition.
retrenchment strategy
Regrouping through cost and asset reduction to reverse declining sales and profit also called a turnaround or reorganizational strategy designed to fortify an organization's basic distinctive competence
joint venture
Six guidelines for when a ___________ may be an especially effective means for pursuing strategies are 1. A privately owned organization is forming a joint venture with a publicly owned organization. There are some advantages to being privately held, such as closed ownership. There are also some advantages of being publicly held, such as access to stock issuances as a source of capital. Sometimes the unique advantages of being privately and publicly held can be synergistically combined in a joint venture. 2. A domestic organization is forming a joint venture with a foreign company. A joint venture can provide a domestic company with the opportunity for obtaining local management in a foreign country, thereby reducing risks such as expropriation and harassment by host country officials. 3. The distinct competencies of two or more firms complement each other especially well. 4. Some project is potentially profitable but requires overwhelming resources and risks. 5. Two or more smaller firms have trouble competing with a large firm. 6. There is a need to quickly introduce a new technology. David, Fred R.. Strategic Management (p. 150). Pearson Education. Kindle Edition.
Psychographic
Social Class- Lower lowers, upper lowers, lower middles, upper middles, lower uppers, upper uppers Personality- Compulsive, gregarious, authoritarian, ambitious are variables and typical break downs of _______________ market segmentation David, Fred R.. Strategic Management (p. 249). Pearson Education. Kindle Edition.
finance and accounting
Some examples of decisions that may require ________________ and _________________ policies are: 1. To raise capital with short-term debt, long-term debt, preferred stock, or common stock 2. To lease or buy fixed assets 3. To determine an appropriate dividend payout ratio 4. To use last-in, first-out (LIFO), first-in, first-out (FIFO), or a market-value accounting approach 5. To extend the time of accounts receivable 6. To establish a certain percentage discount on accounts within a specified period of time 7. To determine the amount of cash that should be kept on hand .
cost leadership
Some risks of pursuing ____________ strategies are... competitors may imitate the strategy, thus driving overall industry profits down technological breakthroughs in the industry may make the strategy ineffective buyer interest may swing to other differentiating features besides price. David, Fred R.. Strategic Management (p. 146). Pearson Education. Kindle Edition.
product positioning
Some rules for using ________________________as a strategy-implementation tool are the following: 1. Look for the hole or vacant niche 2. Do not serve two segments with the same strategy. 3. Do not position yourself in the middle of the map. This rule can vary with the number of competitors.
retrenchment
Staples closed 250 stores and reduced by 50% the size of other stores. is a example of what type of defensive strategy
backward integration
Starbucks purchased a coffee farm is an example of type of integration strategy
The Quantitative Strategic Planning Matrix (QSPM)
Steps in a ______________ matrix include 1.Make a list of the firm's key external opportunities/threats and internal strengths/weaknesses in the left column of the matrix 2.Assign weights to each key external and internal factor (These weights are identical to those in the EFE Matrix and IFE Matrix) in a straight column just to the right of the external and internal factors. 3.Examine the Stage 2 (matching) matrices, and identify alternative strategies that the organization should consider implementing 4.Determine the Attractiveness Scores (AS). Specifically, it should be assigned to each strategy to indicate the relative attractiveness of one strategy over others. The range for AS is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive. 5.Compute the Total Attractiveness Scores 6.Compute the Sum Total Attractiveness Score
ST
Strong research and development expertise + Decreasing numbers of younger adults = Develop new products for older adults is an exampl of what type of swot strategy? David, Fred R.. Strategic Management (p. 171). Pearson Education. Kindle Edition.
financial position [FP] and competitive position [CP] (stability position [SP] and industry position [IP]).
The axes of the SPACE Matrix represent two internal dimensions ________________ and _____________________ and two external dimensions _______________ and __________________ David, Fred R.. Strategic Management (p. 174). Pearson Education. Kindle Edition.
market penetration
The following five guidelines indicate when ________________ may be an especially effective strategy 1. Current markets are not saturated with a particular product or service. 2. The usage rate of present customers could be increased significantly. 3. The market shares of major competitors have been declining while total industry sales have been increasing. 4. The correlation between dollar sales and dollar marketing expenditures historically has been high. 5. Increased economies of scale provide major competitive advantages. (David, p. 138)
business analytics or data mining.
The idea with retention-based segmentation is to examine and compare the attributes of active customers and prior customers in order to better target potential customers; with the assumption that active customers will have similar retention outcomes as those of their comparable predecessor. This whole process is possible through
Boston Consulting Group (BCG) Matrix
The major benefit of the _______________Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions
SWOT Matrix
The process of constructing a _____________________ can be summarized in eight steps, as follows: 1. List the firm's key external opportunities. 2. List the firm's key external threats. 3. List the firm's key internal strengths. 4. List the firm's key internal weaknesses. 5. Match internal strengths with external opportunities, and record the resultant SO strategies in the appropriate cell. 6. Match internal weaknesses with external opportunities, and record the resultant WO strategies. 7. Match internal strengths with external threats, and record the resultant ST strategies. 8. Match internal weaknesses with external threats, and record the resultant WT strategies. David, Fred R.. Strategic Management (p. 172). Pearson Education. Kindle Edition.
SPACE Matrix
The process of developing a _____________ matrix can be summarized in six steps, as follows: 1. Select a set of variables to define financial position, competitive position, stability position, and industry position. 2. Assign a numerical value ranging from +1 (worst) to +7 (best) to each of the variables that make up the FP and IP dimensions. Assign a numerical value ranging from -1 (best) to -7 (worst) to each of the variables that make up the SP and CP dimensions. 3. Compute an average score for FP, CP, IP, and SP by summing the values given to the variables of each dimension and then by dividing by the number of variables included in the respective dimension. 4. Plot the average scores for FP, IP, SP, and CP on the appropriate axis in the Matrix. 5. Add the two scores on the x-axis and plot the resultant point on X. Add the two scores on the y-axis and plot the resultant point on Y. Plot the intersection of the new (x, y) coordinate. 6. Draw a directional vector from the origin of the Matrix (0,0) through the new (x, y) coordinate. That vector, being located in a particular quadrant, reveals particular strategies the organization should consider. David, Fred R.. Strategic Management (p. 175). Pearson Education. Kindle Edition.
stability position SP
The term refers to the volatility of profits and revenues for firms in a given industry; where volatility or stability is based on the expected impact of changes in core external factors such as technology, economy, demographic, seasonality, and so on. David, Fred R.. Strategic Management (p. 174). Pearson Education. Kindle Edition.
industry growth rate (IGR)
The y-axis on the BCG matrix represents the ________________ in sales, measured in percentage terms—that is, the average annual increase in revenue for all firms in an industry. David, Fred R.. Strategic Management (p. 179). Pearson Education. Kindle Edition.
Chapter 7 Chapter 9 Chapter 11 Chapter 12 Chapter 13. David, Fred R.. Strategic Management (p. 142). Pearson Education. Kindle Edition.
There are five major types of bankruptcy:
market development
These six guidelines indicate when ____________________may be an especially effective strategy 1. New channels of distribution are available that are reliable, inexpensive, and of good quality. 2. An organization is successful at what it does. 3. New untapped or unsaturated markets exist. 4. An organization has the needed capital and human resources to manage expanded operations. 5. An organization has excess production capacity. 6. An organization's basic industry is rapidly becoming global in scope. (David,p. 138)
Retention-Based Segmentation
To aid in segmenting markets and targeting specific groups of customers, companies commonly tag each of their active customers with three "retention" values: .Tag #1: Is this customer at high risk of canceling the company's service? Tag #2: Is this customer worth retaining? Tag #3: What retention tactics should be used to retain this customer? this known as ___________________ market segmentation..
1. Perform value chain activities more efficiently than rivals and control the factors that drive the costs of value chain activities. 2. Revamp the firm's overall value chain to eliminate or bypass some cost-producing activities. David, Fred R.. Strategic Management (p. 146). Pearson Education. Kindle Edition.
To employ a cost leadership strategy successfully, a firm must ensure that its total costs across its overall value chain are lower than competitors' total costs. There are two ways to accomplish this: David, Fred R.. Strategic Management (p. 146). Pearson Education. Kindle Edition.
Behavioral
Use Occasion- Regular occasion, special occasion Benefits Sought- Quality, service, economy User Status- Nonuser, ex-user, potential user, first-time user, regular user Usage Rate- Light user, medium user, heavy user Loyalty Status- None, medium, strong, absolute Readiness Stage- Unaware, aware, informed, interested, desirous, intending to buy Attitude toward Product- Enthusiastic, positive, indifferent, negative, hostile are variables and typical break downs of _______________ market segmentation David, Fred R.. Strategic Management (p. 249). Pearson Education. Kindle Edition.
Boston Consulting Group (BCG) Matrix and Internal-External (IE) matrix
When a firm's divisions compete in different industries, a separate strategy often must be developed for each business. The _________________________________ matrix and the ___________________ matrix are designed specifically to enhance a multidivisional firm's efforts to formulate strategies. David, Fred R.. Strategic Management (p. 178). Pearson Education. Kindle Edition.
bankruptcy
______ can allow a firm to avoid major debt obligations and to void union contracts. David, Fred R.. Strategic Management (p. 142). Pearson Education. Kindle Edition.
input stage
_______ stage of the strategy-formulation analytical framework summarizes the basic information needed to formulate strategies; consists of 3 matrices External Factor Evaluation (EFE) Matrix, Internal Factor Evaluation (IFE) Matrix Competitive Profile Matrix (CPM).
Retrenchment
_________ can involve selling off land and buildings to raise needed cash, pruning product lines, closing marginal businesses, closing obsolete factories, automating processes, reducing the number of employees, and instituting expense control systems.
divestiture
__________ is usually the next strategy after an organization has pursued a retrenchment strategy and failed to accomplish needed improvements
type 1 or 2 cost leadership strategies
__________ or _____________strategy can be especially effective under the following conditions 1. Price competition among rival sellers is especially vigorous. 2. Products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers. 3. There are few ways to achieve product differentiation that have value to buyers. 4. Most buyers use the product in the same ways. 5. Buyers incur low costs in switching their purchases from one seller to another. 6. Buyers are large and have significant power to bargain down prices. 7. Industry newcomers use introductory low prices to attract buyers and build a customer base. David, Fred R.. Strategic Management (p. 146). Pearson Education. Kindle Edition.
matching stage
__________ stage of the strategy-formulation analytical framework focuses on generating feasible alternative strategies by aligning key external and internal factors; includes 5 matrices... Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix Strategic Position and Action Evaluation (SPACE) Matrix, Boston Consulting Group (BCG) Matrix Internal-External (IE) Matrix Grand Strategy Matrix. .
Stars
___________ are Divisions positioned in Quadrant II (upper left) in the BCG Matrix. they represent the organizations' best long-run opportunities for growth and profitability.
Defensive
___________SPACE strategies include retrenchment, divestiture, liquidation, and related diversification.
decision stage
____________ stage of the strategy-formulation analytical framework reveal the relative attractiveness of alternative strategies; providing an objective basis for selecting specific strategies. it inlcudes one matrix Quantitative Strategic Planning Matrix (QSPM) technique
strategy analysis and choice
_____________ and ________process envolves 1. lising alternative strategies given the firms external and internal audit information to be achieve the firm's current mission through objectives 2. ranked given alternative strategies in order of attractiveness, with 1 = should not be implemented, 2 = possibly should be implemented, 3 = probably should be implemented, and 4 = definitely should be implemented. 3. collect the participants' ranking sheets and sum the ratings given for each strategy. Strategies with the highest sums are deemed the best, so this process results in a prioritized list based on he collective wisdom of the group. David, Fred R.. Strategic Management (p. 170). Pearson Education. Kindle Edition.
Cost savings
_____________ refers to a firm benefiting by outsourcing in order to gain access to lower wages in foreign countries
Research and Development (R&D)
________________ and _____________________Issues include 1.Emphasize product or process improvements 2.Stress basic or applied research 3.Be leaders or followers in R&D 4.Develop robotics or manual-type processes 5.Spend a high, average, or low amount of money on R&D 6.Perform R&D within the firm or contract R&D to outside firms 7.Use university researchers or private-sector researchers
market penetration strategy
_________________________ strategy seeks to increase market share for present products or services in present markets through greater marketing efforts. This strategy is widely used alone and in combination with other strategies; includes increasing the number of salespersons, increasing advertising expenditures, offering extensive sales promotion items, or increasing publicity efforts. David, Fred R.. Strategic Management (p. 138). Pearson Education. Kindle Edition.
Cost restructuring
a benefit of Outsourcing that changes the balance of fixed costs to variable costs by moving the firm more to variable costs. Outsourcing also makes variable costs more predictable.
Knowledge
a benefit of outsourcing where a firm gain access to intellectual property and wider experience and ___________.
Focus on core business
a benefit of outsourcing where a firm has the ability to spend more time on strengthening the elements of the business that most effect the firm's success rather than being distracted by other functions.
risk management
a benefit of outsourcing where a firm partners with an outside firm to reduce the negative effects of potential threats and internal weaknesses
access to talent
a benefit of outsourcing where a firm utilizes the outsourced firm's employee pool; gaining a larger more sustainable source of skills, especially science and engineering.
dividend recapitalizations.
a controversial practice when firms borrow money to fund dividend payouts to themselves; popular with private equity firms Critics say it saddles a company with debt, thus burdening its operations. David, Fred R.. Strategic Management (p. 152). Pearson Education. Kindle Edition.
Internal External Matrix
a division's (segment's) position on The ________________ Matrix is based on two key dimensions: (1) the IFE total weighted scores on the x-axis; ranging from 1 - 4 (2) the EFE total weighted scores on the y-axis; ranging from 1 - 4 David, Fred R.. Strategic Management (p. 183). Pearson Education. Kindle Edition.
Improve quality
a firm can use outsourcing to _________________ by contracting out various business functions to specialists.
Board of directors
a group of individuals who are elected by the ownership of a corporation to have oversight and guidance over management and who look out for shareholders' interests
Unrelated Diversification
a growth strategy whereby a new business lacks any common elements with the present business
Related Diversification
a growth strategy whereby the current target market and/or marketing mix shares something in common with the new opportunity
Enhance capacity for innovation
a potential benefit of outsourcing that Uses external knowledge to supplement limited in-house capacity for product innovation.
vacant niche
a segment of the market currently not being served.
middle of the map
a term that describes a market position that usually indicates a strategy that is not clearly perceived to have any distinguishing characteristics.
Vertical Integration
a term used to describe the combination of forward and backward integration
Chapter 9
a type of bankruptcy that applies to municipalities; a city or town that has corporate status and local government. David, Fred R.. Strategic Management (p. 142). Pearson Education. Kindle Edition.
Chapter 12
a typr of bankruptcy created by the Family Farmer Bankruptcy Act of 1986. This law provides special relief to family farmers with debt equal to or less than $1.5 million.
WO strategies
aim at improving internal weaknesses by taking advantage of external opportunities. David, Fred R.. Strategic Management (p. 172). Pearson Education. Kindle Edition.
Strategic Position and Action Evaluation (SPACE) Matrix
an important Stage 2 matching tool, that uses a four-quadrant framework to indicate whether aggressive, conservative, defensive, or competitive strategies are most appropriate for a given organization. David, Fred R.. Strategic Management (p. 174). Pearson Education. Kindle Edition.
WT strategies
are defensive tactics directed at reducing internal weakness and avoiding external threats. David, Fred R.. Strategic Management (p. 172). Pearson Education. Kindle Edition.
Liquidation strategy
associated with Chapter 7 bankruptcy; it is the selling of all a company's assets, in parts, for their tangible worth can be an emotionally difficult strategy
reshoring
benefits of ________________ include: 1. Stable wages 2. Reduced gas and electricity costs 3. Excellent security to protect designs from overseas copycats 4. Enable closer tabs on quality control and supply chains 5. Excellent economy with consumers purchasing more 6. Less shipment costs with consumers nearby 7. Excellent human rights, education, legal, and political systems that promote freedom and opportunity for citizens David, Fred R.. Strategic Management (p. 154). Pearson Education. Kindle Edition.
horizontal
following guidelines indicate when _________ integration may be an especially effective strategy: 1. An organization can gain monopolistic characteristics in a particular area or region without being challenged by the federal government for "tending substantially" to reduce competition. 2. An organization competes in a growing industry. 3. Increased economies of scale provide major competitive advantages. 4. An organization has both the capital and human talent needed to successfully manage an expanded organization. 5. Competitors are faltering as a result of a lack of managerial expertise or a need for particular resources that an organization possesses; note that horizontal integration would not be appropriate if competitors are doing poorly because in that case overall industry sales are declining. (David, p. 138).
Competitive
for firms positioned in the _____________ quadrant of the SPACE matrix strategies include backward, forward, and horizontal integration; market penetration; market development; and product development.
1. The x and y axes are different. 2. The IE Matrix requires more information about the divisions than does the BCG Matrix. 3. The strategic implications of each matrix are different. For these reasons, 4. The IE Matrix has nine quadrants versus four in a BCG Matrix.
four important differences between the BCG Matrix and the IE Matrix, as follows: David, Fred R.. Strategic Management (p. 181). Pearson Education. Kindle Edition.
BCG Matrix
graphically portrays differences among divisions in terms of relative market share position and industry growth rate allows a multidivisional organization to manage its portfolio of businesses by examining the relative market share position and the industry growth rate of each division relative to all other divisions in the organization
divestiture
guidelines for when ___________ may be an especially effective strategy to pursue: o 1. An organization has pursued a retrenchment strategy and failed to accomplish needed improvements. o 2. To be competitive, a division needs more resources than the company can provide. o 3. A division is responsible for an organization's overall poor performance. o 4. A division is a misfit with the rest of an organization; this can result from radically different markets, customers, managers, employees, values, or needs. o 5. A large amount of cash is needed quickly and cannot be obtained reasonably from other sources. o 6. Government antitrust action threatens an organization. o (David, p. 143)
liquidation
guidelines that indicate when________________may be an especially effective strategy to pursue: o 1. An organization has pursued both a retrenchment strategy and a divestiture strategy, and neither has been successful. o 2. An organization's only alternative is bankruptcy. o Liquidation represents an orderly and planned means of obtaining the greatest possible amount of cash for an organization's assets. A company can legally declare bankruptcy first and then liquidate various divisions to raise needed capital. o 3. The stockholders of a firm can minimize their losses by selling the organization's assets. (David, p. 144)
R&D
implications when using a ____________ and ____________ strategy are Be the first firm to market new technological products Be an innovative imitator of successful products, thus minimizing the risks and costs of start-up Be a low-cost producer by mass-producing products similar to but less expensive than products recently introduced
company, functional, and operational.
in small firms, there are three levels of strategies:
Grand strategy matrix
in the _______________ matrix position of the firm is based on two evaluative dimensions: (1) competitive position on the x-axis and (2) market (industry) growth on the y-axis.
Grand Strategy Matrix
in this matrix All organizations can be positioned in one of the four strategy quadrants. each quadrant has its own list of strategies from most attractive to last resort (depending on the firm's unique factors). David, Fred R.. Strategic Management (p. 185). Pearson Education. Kindle Edition.
external and internal
matching ____________ and ____________ key factors is the essential for effectively generating feasible alternative strategies. For example, a firm with excess working capital (an internal strength) could take advantage of the cell phone industry's 20 percent annual growth rate (an external opportunity) by acquiring Cellfone, Inc. David, Fred R.. Strategic Management (p. 171). Pearson Education. Kindle Edition.
Focus
means producing products and services that fulfill the needs of small groups of consumers. David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
A leveraged buyout (LBO)
occurs when a corporation's shareholders are bought by the company's management and other private investors using borrowed funds David, Fred R.. Strategic Management (p. 151). Pearson Education. Kindle Edition.
acquisition
occurs when a large organization purchases a smaller firm or vice versa. David, Fred R.. Strategic Management (p. 150). Pearson Education. Kindle Edition.
merger
occurs when two organizations of about equal size unite to form one enterprise. David, Fred R.. Strategic Management (p. 150). Pearson Education. Kindle Edition.
type 4 low cost focus strategy
offers products or services to a small range (niche group) of customers at the lowest price available on the market. . David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
type 5 best value focus strategy
offers products or services to a small range of customers at the best price-value available on the market. Sometimes called "focused differentiation," aims to offer a niche group of customers the products or services that meet their tastes and requirements better than rivals' products do. David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
type 1 low-cost strategy
offers products or services to a wide range of customers at the lowest price available on the market. David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
First mover advantages
refer to the benefits a firm may achieve by entering a new market or developing a new product or service prior to rival firms. David, Fred R.. Strategic Management (p. 152). Pearson Education. Kindle Edition.
stars
refering to the BCG matrix ___________ are Divisions with a high relative market share and a high industry growth rate; division in this quadrant should receive substantial investment to maintain or strengthen their dominant positions. Forward, backward, and horizontal integration; market penetration; market development; and product development are appropriate strategies for these divisions to consider
4. Outstanding Shares Method
referring to a method used to determine monetary value of a company, To use this method, multiply the number of shares outstanding (or issued) by the market price per share. If the purchase price is more than this amount, the additional dollars are called a premium. This method may also be called the market value or market capitalization or book value.
3. Price-Earnings Ratio Method
referring to a method used to determine monetary value of a company, To use this method, the market price of the firm's common stock is divided by the annual earnings per share (EPS) and then multiplied by the firm's average net income for the past five years.
2. The Net Income Method
referring to a method used to determine monetary value of a company, out of the belief that the worth of any business should be based largely on the future benefits its owners may derive through net profits. A conservative rule of thumb is to establish a business's worth as five times the firm's current annual profit. A 5-year average profit level could also be used. results in the lowest corporate valuation of all methods.
1. The Net Worth Method
referring to a method used to determine monetary value of a company, to calculate, first determine Total Shareholders' Equity(SE), which is the sum of common stock, additional paid-in capital, and retained earnings, then subtract goodwill and intangibles if these items appear as assets on the firm's balance sheet.
ADHERENCE TO LEGAL PRESCRIPTIONS
referring to bored of director duties and responsibilities, the following are specific instances when the bored conducts which general responsibility? a. Keep abreast of new laws. b. Ensure the entire organization fulfills legal prescriptions. c. Pass bylaws and related resolutions. d. Select new directors. e. Approve capital budgets. f. Authorize borrowing, new stock issues, bonds, and so on.
CONSIDERATION OF STAKEHOLDERS' INTERESTS
referring to bored of director duties and responsibilities, the following are specific instances when the bored conducts which general responsibility? a. Monitor product quality. b. Facilitate upward progression in employee quality of work life. c. Review labor policies and practices. d. Improve the customer climate. e. Keep community relations at the highest level. f. Use influence to better governmental, professional association, and educational contacts. g. Maintain good public image.
ADVANCEMENT OF STOCKHOLDERS' RIGHTS
referring to bored of director duties and responsibilities, the following are specific instances when the bored conducts which general responsibility? a. Preserve stockholders' equity. b. Stimulate corporate growth so that the firm will survive and flourish. c. Guard against equity dilution. d. Ensure equitable stockholder representation. e. Inform stockholders through letters, reports, and meetings. f. Declare proper dividends. g. Guarantee corporate survival.
CONTROL AND OVERSIGHT OVER MANAGEMENT
referring to bored of director duties and responsibilities, the following are specific instances when the bored conducts which general responsibility? a. Select the Chief Executive Officer (CEO). b. Sanction the CEO's team. c. Provide the CEO with a forum. d. Ensure managerial competency. e. Evaluate management's performance. f. Set management's salary levels, including fringe benefits. g. Guarantee managerial integrity through continuous auditing. h. Chart the corporate course. i. Devise and revise policies to be implemented by management. .
horizontal
referring to firms positioned in quadrant II of the grand strategy matrix, if the firm is lacking a distinctive competence or competitive advantage, then ____________ integration is often a desirable alternative to intensive strategies.
type 3 differentiation
referring to porters 5 generic strategies, this strategy type envolves making a product different from competitors or others products in the firm a strategy aimed at producing products and services considered unique to the industry and directed at consumers who are relatively price insensitive. David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
dog
referring to the BCG Matrix, When a division first becomes a _______, retrenchment can be the best strategy to pursue because many of the divisions that fall in this quadrant have bounced back, after strenuous asset and cost reduction, to become viable, profitable divisions
question marks
referring to the BCG matrix businesses are called ____________________________ because the organization must decide whether to strengthen them by pursuing an intensive strategy (market penetration, market development, or product development) or to sell them.
dogs
referring to the BCG matrix divisions are called _____ in the firm's portfolio when they have a weak internal and external position, these businesses are often liquidated, divested, or trimmed down through retrenchment.
quadrant III
referring to the grand strategy matrix, organizations in quadrant ___ compete in slow-growth industries and have weak competitive positions. David, Fred R.. Strategic Management (p. 186). Pearson Education. Kindle Edition.
Cash cow
referring to the BCG matrix, ____________ divisions should be managed to maintain their strong position for as long as possible. Product development or diversification may be attractive strategies for stronger divisions (one that still produce high returns). However, as these division become weak, retrenchment or divestiture can become more appropriate.
cash cows
referring to the BCG matrix, divisions are Called ________________ because they generate cash in excess of their needs, they are often milked. Many of them were once stars.
region 2 - hold and maintain
referring to the IE matrix divisions in postioned in this region are considered stable or average preforming; market penetration and product development are two commonly employed strategies for these types of divisions. David, Fred R.. Strategic Management (p. 183). Pearson Education. Kindle Edition.
grow and build
referring to the IE matrix, divisions positioned in the ________ ________ region will most likely benefit from strategies like • Backward, Forward, or Horizontal Integration • Market Penetration • Market Development • Product Development David, Fred R.. Strategic Management (p. 182). Pearson Education. Kindle Edition.
hold and maintain
referring to the IE matrix, divisions positioned in the ________ ________ region will most likely benefit from strategies like • Market Penetration • Product Development David, Fred R.. Strategic Management (p. 182). Pearson Education. Kindle Edition.
harvest or divest
referring to the IE matrix, divisions positioned in the ________ ________ region will most likely benefit from strategies like • Retrenchment • Divestiture David, Fred R.. Strategic Management (p. 182). Pearson Education. Kindle Edition.
region 1 - grow and build
referring to the IE matrix, what is the best region for divisions to be in, due to the indication of high IFE and EFE scores. Successful organizations are able to achieve a portfolio of businesses positioned in this region David, Fred R.. Strategic Management (p. 183). Pearson Education. Kindle Edition.
Attractiveness Scores (AS)
referring to the QSPM, ________________________ range from 1-4 and are determined by examining each key external or internal factor, one at a time, and asking the question, "Does this factor affect the choice of strategies being made?" then the score is given based on how well said strategy, compared to others, enables the firm to either capitalize on the strength, improve on the weakness, exploit the opportunity, or avoid the threat.
Total Attractiveness Scores (TAS)
referring to the QSPM, __________________are defined as the product of multiplying the weights (Step 2) by the AS (Step 4) in each row.
FP and CP
referring to the SPACE matrix, On the ___ and ____ axes (up and down), make comparisons to competitors to determine if the company is best, worse or in between.
SP
referring to the SPACE matrix, on the ___ axis, know that a -7 denotes highly unstable industry conditions, whereas -1 denotes highly stable.
intangibles; goodwill
referring to the balance sheet, _____________________ include copyrights, patents, and trademarks, where as _________________ arises only if a firm acquires another firm and pays more than the book value for that firm
quadrant III
referring to the grand strategy matrix, Extensive cost and asset reduction (retrenchment) should be pursued first by firms in quadrant ___.
Quadrant II
referring to the grand strategy matrix, Firms positioned in Quadrant ___ need to evaluate their present approach to the marketplace seriously to improve their competitiveness because Although their industry is growing, they are unable to compete effectively David, Fred R.. Strategic Management (p. 185 - 186). Pearson Education. Kindle Edition.
quadrant I
referring to the grand strategy matrix, It is unwise for a Quadrant __ firm to shift notably from its established competitive advantages.
resources
referring to the grand strategy matrix, When a Quadrant I organization has excessive _________, then backward, forward, or horizontal integration may be effective strategies.
quadrant IV
referring to the grand strategy matrix, firms in Quadrant ___, lower right have a strong competitive position in slow-growth industry have the strength to launch diversified programs into more promising growth areas: have characteristically high cash-flow levels and limited internal growth needs often can pursue related or unrelated diversification successfully. also may pursue joint ventures. David, Fred R.. Strategic Management (p. 186). Pearson Education. Kindle Edition.
quadrant III (lower left)
referring to the grand strategy matrix, firms positioned in quadrant ___ look at the following strategies in order of attractiveness 1. Retrenchment 2. Related diversification 3. Unrelated diversification 4. Divestiture 5. Liquidation David, Fred R.. Strategic Management (p. 185). Pearson Education. Kindle Edition.
quadrant IV (lower right)
referring to the grand strategy matrix, firms positioned in quadrant ___ look at the following strategies in order of attractiveness 1. Related diversification 2. Unrelated diversification 3. Joint ventures David, Fred R.. Strategic Management (p. 185). Pearson Education. Kindle Edition.
quadrant 1 (top right)
referring to the grand strategy matrix, firms positioned in quadrant ___ look at the following strategies in order of attractiveness 1. Market development 2. Market penetration 3. Product development 4. Forward integration 5. Backward integration 6. Horizontal integration 7. Related diversification David, Fred R.. Strategic Management (p. 185). Pearson Education. Kindle Edition.
quadrant II (top left)
referring to the grand strategy matrix, firms positioned in quadrant ___ look at the following strategies in order of attractiveness 1. Market development 2. Market penetration 3. Product development 4. Horizontal integration 5. Divestiture 6. Liquidation David, Fred R.. Strategic Management (p. 185). Pearson Education. Kindle Edition.
true
true or false Geographic and demographic bases for segmenting markets are the most commonly employed
backward
the following are guidelines when _________ integration may be an especially effective strategy 1. An organization's present suppliers are especially expensive, unreliable, or incapable of meeting the firm's needs for parts, components, assemblies, or raw materials. 2. The number of suppliers is small and the number of competitors is large. 3. An organization competes in an industry that is growing rapidly; this is a factor because integrative-type strategies (forward, backward, and horizontal) reduce an organization's ability to diversify in a declining industry. 4. An organization has both capital and human resources to manage the new business of supplying its own raw materials. 5. The advantages of stable prices are particularly important; this is a factor because an organization can stabilize the cost of its raw materials and the associated price of its product(s) through backward integration. 6. Present suppliers have high profit margins, which suggest that the business of supplying products or services in a given industry is a worthwhile venture. 7. An organization needs to quickly acquire a needed resource.
The New Principles of Marketing
the following... 1. Do not just talk at consumers—work with them throughout the marketing process. 2. Give consumers a reason to participate. 3. Listen to—and join—the conversation outside your company's website. 4. Resist the temptation to sell, sell, sell. Instead attract, attract, attract. 5. Do not control online conversations; let it flow freely. 6. Find a "marketing technologist," a person who has three excellent skill sets (marketing, technology, and social interaction). 7. Embrace instant messaging and chatting. represent.... David, Fred R.. Strategic Management (p. 247). Pearson Education. Kindle Edition.
Current Marketing Issues
the following... 1.How to make advertisements more interactive to be more effective 2.How to best take advantage of Facebook and Twitter conservations about the company and industry 3.To use exclusive dealerships or multiple channels of distribution 4.To use heavy, light, or no TV advertising versus online advertising 5.To limit (or not) the share of business done with a single customer 6.To be a price leader or a price follower 7.To offer a complete or limited warranty 8.To reward salespeople based on straight salary, straight commission, or a combination salary/commission represent
managing by extrapolation
the managing mentality if it ain't broke don't fix it
product positioning
the steps of _______________ can be summerized as 1. Select key criteria that effectively differentiate products or services in the industry. 2. Diagram a two-dimensional product-positioning map with specified criteria on each axis. 3. Plot major competitors' products or services in the resultant four-quadrant matrix. 4. Identify areas in the positioning map where the company's products or services could be most competitive in the given target market. Look for vacant areas (niches). 5. Develop a marketing plan to position the company's products or services appropriately.
combination strategy
this type of strategy can be exceptionally risky if carried too far. No organization can afford to pursue all the strategies that might benefit the firm. Difficult decisions must be made. Priorities must be established. Organizations, like individuals, have limited resources. David, Fred R.. Strategic Management (p. 133). Pearson Education. Kindle Edition.
extrapolation crisis subjectives hope
to ensure that a firm is always managing by objectives strategists should avoid manage by what four things?
true
true of false because there are an infinite number of possible actions and an infinite number of ways to implement those actions, manageable set of the most attractive alternative strategies must be developed, examined, prioritized, and selected, and disadvantages, trade-offs, costs, and benefits of these strategies should be determined. David, Fred R.. Strategic Management (p. 168). Pearson Education. Kindle Edition.
true
true or faalse Depending on the type of organization, numerous variables could make up each of the dimensions represented on the axes of the SPACE Matrix. David, Fred R.. Strategic Management (p. 174-175). Pearson Education. Kindle Edition.
true
true or false A version of divestiture occurs when a corporation splits into two or more parts; Part of the reason for splitting diversified firms is that the homogenous parts are generally much more attractive for potential buyers. David, Fred R.. Strategic Management (p. 143). Pearson Education. Kindle Edition.
true
true or false Blogs are creating more content that doubles also as an ad
false
true or false Factors that were included in the firm's EFE and IFE Matrices should not be considered in developing a SPACE Matrix because these factors are already included in the Swot analysis
true
true or false Firms should provide incentives to consumers to share their thoughts, opinions, and experiences on the company website
true
true or false In addition to preparing to buy or sell a business, corporate valuation analysis is oftentimes performed when dealing with the following issues: bank loans, tax calculations, retirement packages, death of a principal, divorce, partnership agreements, and IRS audits.
true
true or false In performing strategic-management case analysis, prepare the SPACE Matrix (and all matrices) based on the point in time of your analysis rather than a desired future point in time. However, in your discussion of implications, be sure to comment on what you recommend the firm should do to improve its situation. Focus more on implications of matrices than on "number crunching" in your actual oral delivery of a case analysis. David, Fred R.. Strategic Management (p. 178). Pearson Education. Kindle Edition.
true
true or false In some cases, declaring bankruptcy can be an effective retrenchment strategy. David, Fred R.. Strategic Management (p. 142). Pearson Education. Kindle Edition.
true
true or false Market segmentation decisions directly affect marketing mix variables: product, place, promotion, and price
true
true or false Most organizations simultaneously pursue a combination of two or more strategies, but a combination strategy can be exceptionally risky if carried too far.
true
true or false People in essence segment themselves by nature of the websites that comprise their "favorite places," and many of these websites sell information regarding their "visitors"
true
true or false Political biases and personal preferences get unduly embedded in strategy choice decisions
true
true or false Political maneuvering consumes valuable time, subverts organizational objectives, diverts human energy, and results in the loss of some valuable employees
true
true or false Strategists never consider all feasible alternatives that could benefit the firm because there are an infinite number of possible actions and ways to implement those actions. Therefore, a manageable set of the most attractive alternative strategies must be developed, examined, prioritized, and selected. David, Fred R.. Strategic Management (p. 168). Pearson Education. Kindle Edition.
true
true or false Strategy analysis and choice seek to determine alternative courses of action that could best enable the firm to achieve its mission and objectives. David, Fred R.. Strategic Management (p. 168). Pearson Education. Kindle Edition.
True
true or false Strategy making is not just a task for top executives. Middle- and lower-level managers also must be involved in the strategic-planning process to the extent possible.
true
true or false The both the BCG Matrix and the IE Matrix Each circle represents a separate division. The size of the circle corresponds to the proportion of corporate revenue generated by that business unit, and the pie slice indicates the proportion of corporate profits generated by that division. David, Fred R.. Strategic Management (p. 180). Pearson Education. Kindle Edition.
false The company website must not be all about the company—it must be all about the customer too
true or false The company website should only be about the company
false the higher not lower
true or false The lower the frequency and magnitude of changes in a given industry, the more unstable the SP becomes. David, Fred R.. Strategic Management (p. 174). Pearson Education. Kindle Edition.
true
true or false The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization's various divisions. David, Fred R.. Strategic Management (p. 180). Pearson Education. Kindle Edition.
true
true or false To employ a cost leadership strategy successfully, a firm must ensure that its total costs across its overall value chain are lower than competitors' total costs
true
true or false Usually, a strategy successful with one segment cannot be directly transferred to another segment.
true
true or false When a particular company is known, the analyst must be much more specific in terms of recommended strategies. For example, instead of saying market penetration is a recommended strategy when your vector is located in the Conservative Quadrant, say that adding 34 new stores in India is a recommended strategy. David, Fred R.. Strategic Management (p. 176-177). Pearson Education. Kindle Edition.
true
true or false a common practice in the matching stage of strategic management is to develop a BCG Matrix and an IE Matrix for the present, and projected future because a before-and-after analysis can be very effective in an oral presentation, enabling strategists to justify or give some rationale for their recommendations David, Fred R.. Strategic Management (p. 181). Pearson Education. Kindle Edition.
true
true or false a growing trend is for franchisees to buy out their part of the business from their franchiser (corporate owner). David, Fred R.. Strategic Management (p. 135- 136). Pearson Education. Kindle Edition.
false Websites are allowing lengthier ads to run before short video clips play
true or false due to pressures of the consumer, Websites are shorting the ads that run before short video clips play
true
true or false for companies or divisions in quadrant 1 of the Grand strategy matrix continued concentration on current markets (market penetration and market development) and products (product development) is an appropriate strategy.
true
true or false implications presented should be specific to the greatest extent possible when formulating strategies, no matter the matrix being used, because Vagueness can be disastrous in strategic management.
true
true or false referring to the BCG matrix, The industry growth rate percentages on the y-axis could range from −20 to +20 percent, with 0.0 being the midpoint. David, Fred R.. Strategic Management (p. 179). Pearson Education. Kindle Edition.
true
true or false referring to the IE matrix, On the x-axis (right to left), an IFE total weighted score of 1.0 to 1.99 represents a weak internal position 2.0 to 2.99 is average 3.0 to 4.0 is strong. on the y-axis (down and up), an EFE total weighted score of 1.0 to 1.99 is low 2.0 to 2.99 is medium; 3.0 to 4.0 is high. David, Fred R.. Strategic Management (p. 183). Pearson Education. Kindle Edition.
true
true or false referring to the QSPM if a internal or external factor has no effect on the alternative strategy the attractiveness score is left blank for that strategy and all the strategies in that set.
false this is true for quadrant I companies not II
true or false referring to the grand strategy matrix, Quadrant II firms can afford to take advantage of external opportunities in several areas; taking risks aggressively when necessary.
true
true or false referring to the grand strategy matrix, When a Quadrant I firm is too heavily committed to a single product, then related diversification may reduce the risks associated with a narrow product line.
true
true or false referring to the grand strategy matrix, a firm positioned in quadrant II should look at divestiture or liquidation as a last resort, because Divestiture can provide funds needed to acquire other businesses or buy back shares of stock.
true
true or false referring to the grand strategy matrix, because of their poor position and the slow growth of the industry, quadrant III firms must make some drastic changes quickly to avoid further decline and possible liquidation.
false, this is true for quadrant III not IV
true or false referring to the grand strategy matrix, firms in quadrant IV should shift resources away from the current business into different areas (diversify) as an alternative strategy to retrenchment. If all else fails, the final options are divestiture or liquidation.
true
true or false regarding strategy-formulation, Lenz emphasized that the shift from a words-oriented to a numbers-oriented planning process can give rise to a false sense of certainty; it can reduce dialogue, discussion, and argument as a means for exploring understandings, testing assumptions, and fostering organizational learning. David, Fred R.. Strategic Management (p. 170). Pearson Education. Kindle Edition.
false, larger firms typically use cost leadership and differentiation and smaller firms often use focus base
true or false smaller firms with greater access to resources typically compete on a cost leadership or differentiation basis, whereas larger firms often compete on a focus basis. although differentiation can benefit both large and small David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
true
true or false the difference between type 4 and 5 focus strategies is that Type 4 strategies offer products or services to a niche group at the lowest price, whereas Type 5 offers products and services to a niche group at higher prices but loaded with features so the offerings are perceived as the best value. David, Fred R.. Strategic Management (p. 144). Pearson Education. Kindle Edition.
true
true or false the internet makes market segmentation easier because The segments of people whom marketers want to reach online are much more precisely defined than the segments of people reached through traditional forms of media, such as television, radio, and magazines
true
true or false when presenting strategies the main point you should try and get across is how your proposed strategies could enable your company to rotate/shift its SPACE vector more toward the Aggressive Quadrant. David, Fred R.. Strategic Management (p. 177). Pearson Education. Kindle Edition.
Chapter 11
type of bankruptcy that allows organizations to reorganize and come back after filing a petition for protection. David, Fred R.. Strategic Management (p. 142). Pearson Education. Kindle Edition.
Conservative Quadrant
upper left quadrant of the SPACE Matrix implies staying close to the firm's basic competencies and not taking excessive risks. David, Fred R.. Strategic Management (p. 177). Pearson Education. Kindle Edition.
SO strategies
use a firm's internal strengths to take advantage of external opportunities. David, Fred R.. Strategic Management (p. 171). Pearson Education. Kindle Edition.
ST strategies
use a firm's strengths to avoid or reduce the impact of external threats. David, Fred R.. Strategic Management (p. 172). Pearson Education. Kindle Edition.
QSPM (Quantitative Strategic Planning Matrix)
uses input information from Stage 1 to objectively evaluate feasible alternative strategies identified in Stage 2. is a more robust way to determine the relative attractiveness of strategies than the 1) summed ranking method described above, or the 2) individual vs group ranking method described on pages 366-367 in Part 6). David, Fred R.. Strategic Management (p. 170). Pearson Education. Kindle Edition