MGT495 - Exam #1

List the labels for "Porter's Value Creation Frontier" from TOP left to BOTTOM right.

"More Value" (I) Innovativeness (QAC) Quality At Craftsmanship (CR) Customer Responsiveness (QIW) Quality It Works (E/P) Efficiency/Price "Cost"

What heads (far right) the "Cruise Ship" Example?

"VALUE"

Quality At Craftsmanship (QAC)

-Brand - "Patagonia" -Luxury - "Plastic Car Handles" -Experienced - "Starbucks"

What are 2 Pricing Mechanisms?

-Fixed Menu Pricing: Predefined prices are based on static variables -Dynamic Pricing: Prices change based on market conditions

What are the 2 concepts to consider when looking at "Environment"?

-General Environment (Microenvironment) -Industry (Competitive Environment)

"Is Map"

-Shows issues and opportunities -An accurate representation of the process as it currently operates - no matter how ugly.

What are the 3 Laws of "Porters Value Creation Frontier"?

1. Increase in Cost, Value, Price 2. Assumption 3. FAIL

What does V.R.I.O. stand for?

1. Value: NO Competitive Advantage 2. Rare: Comparable Competitive Advantage 3. Imitate-ability: Temporary Competitive Advantage 4. Organized to Exploit:

Revenue Structure - Cost Structure = ?

=Profitability

Plan

A carefully crafted set of steps that a firm intends to follow in order to be successful

Position

A firm's place in the industry relative to its competitors

Differentiation

A new entrant would struggle to match the differentiation that years of advertising have created for various brands

Cost Structure (and the 2 types)

All costs incurred to operate a business model EX. Fixed Costs, Variable Costs -Cost Driven: Focus on minimizing costs whenever possible -Value Driven: Costs that remain the same despite the volume of goods or services produced.

Substitutes

Are offerings that differ from goods and services provided by the competitors in an industry but that fill similar needs to what the industry offers.

Economies of Scale

As the number of customers a firm serves increases, the cost of serving each customer tends to decrease

What does "C" stand for? (Business Model Canvas)

Channels

What does "CA" stand for?

Competitive Advantage

What does "CS" stand for? (Business Model Canvas)

Cost Structure (BOTTOM LEFT) OR Customer Segmentation (TOP RIGHT)

As you move up (to the top right) of "Porters Value Creation Frontier, what happens?

Creates MORE value

What does "CR" stand for? (Business Model Canvas)

Customer Relationships

What foes "CR" stand for?

Customer Responsiveness

What are the 9 Building Blocks (for a business model)?

Customer Segments Value Propositions Channels Customer Relationships Revenue Streams Key Resources Key Activities Key Partnerships Cost Structure

Values (definition)

Decision-making tools used by executives

Government Policy

Decisions made by governments can deter or encourage potential new entrants.

Business Model Canvas

Describes the rationale of how an organization creates, delivers, and captures value

Triple Bottom Line

Emphasizes the three P's: People (Social Concerns) Planet (Environmental Concerns) Profits (Economic Concerns)

What are managers supposed to gauge to determine an organization?

Financial Customer Internal Business Process Learning and Growth

What does "FG" stand for?

Finished Goods

Potential New Entrants

Firms that do not currently compete in the industry by increasing its competitiveness.

Competitors

Firms that produce similar products/services

Business Model Canvas (Right Canvas)

Focused on VALUE

Business Model Canvas (Left Canvas)

Focuses on EFFICIENCY

Customer Responsiveness (CR)

Give customer what they want, when they want it, how they want it. So much so that they pay more for it.

Channels (and the 5 Channel Phases)

How a company communicates with and reaches its Customer Segments to deliver a value proposition The 5 Channel Phases: Awareness Evaluation Purchases Delivery After Sales

Perspective

How executives interpret the competitive landscape around them

Expected Retaliation

If a firm succeeds in entering a market, existing companies might slash their prices in order to keep their market share intact.

What are the "Support" factors of the "Cruise Ship" Example? (4)

Infrastructure Supply Chain Management Information Technologies Human Resources

What does "I" stand for?

Innovation

Types of Strategy:

Intended Emergent Realized Non-realized

What consists of an Organizational Appraisal?

Issues - Cost Structure Opportunities -Profitability, Revenue, Revenue Growth Red Thread - Guides you through a process "Is Map" - How a company currently operates

What does "KA" stand for? (Business Model Canvas)

Key Activities

What does "KP" stand for? (Business Model Canvas)

Key Partnerships

What does "KR" stand for? (Business Model Canvas)

Key Resources

Quality It Works (QIC)

Knowing Customers Well

Switching Costs

One of the challenges facing the makers of alternative fuel vehicles. Few consumers are willing to live with the significant hassles and inconveniences that arise when purchasing an alternative fuel vehicle.

What are the 5 P's?

Plan Ploy Pattern Position Perspective

What does P.E.S.T.E.L. stand for? (PESTEL Analysis)

Political Economic Social Technological Environmental Legal

What does P.E.S.T.L.E.G. stand for?

Political Economic Social Technological Legal Environmental Global

Cost Advantage Independent of Size

Proprietary technology, access to raw materials, and desirable geographic location are all examples of cost advantages not directly associated with size (and economies of scale).

What does "QAC" stand for?

Quality At Craftsmanship

What does "QIW" stand for?

Quality It Works

What runs along the top of the Primary/Support section of the "Cruise Ship" example?

RM --------------FG Raw Materials Finished Goods

What does "RM" stand for?

Raw Materials

What are the "Primary" factors of the "Cruise Ship" Example? (4)

Research Production Sales and Marketing Before/After Sales Customer Service

What does "RS" stand for? (Business Model Canvas)

Revenue Structure

What does S.M.A.R.T. stand for?

Specific Measurable Aggressive Realistic Time-Bound

Forward Vertical Integration

Supplier power is also stronger to the extent that industry members rely heavily on suppliers to be profitable, industry members face high costs when changing suppliers, and suppliers' products are differentiated. Finally, suppliers possess power to the extent that they have the ability to become a new entrant to the industry if they wish.

What is the 5 Forces Analysis?

Suppliers New Entrants Substitutes Buyers Rivalry

What does "SCA" stand for?

Sustained Competitive Advantage

Access to Distribution Channels

The ability to get goods and services to customers can pose a significant challenge to would-be-newcomers.

Value Propositions

The bundle of products/services that create value for a specific Customer Segment EX. Newness Performance Customization

Revenue Streams

The cash a company generates from each customer segment EX. Asset Sale Usage Fee Subscription Fees

Pattern

The degree of consistency in a firm's strategic actions

Customer Segments

The different groups of people or organizations an enterprise aims to reach and serve EX. Mass Market Niche Market Segmented Market

Capital Requirements

The more expensive it is to enter a business, the less likely a new firm is to attempt to enter it.

Key Resources

The most important assets required to make a business model work EX. Physical Intellectual Human Financial

Key Activities

The most important things a company must do to make its business model work EX. Production Problem Solving Platform

Key Partnerships

The network of suppliers/partners that make the business model work EX. Joint Ventures Buyer-Supplier Cooperation

Entrepreneurial Orientation

The process, practices, and decision-making styles of organizations

Autonomy

The tendency to bring forth ideas and see them through completion

Customer Relationship

The types of relationships a company establishes with specific customer segments EX. Personal Assistance Self-Service Communities

Mobility Barriers

These make it difficult or illogical for a particular firm to change groups over time.

Proactiveness

To anticipate and act on future opportunities rather than rely solely on existing products/services

Competitive Aggressivenss

To intensely challenge rivals rather than trying to avoid competition

Innovativeness

To pursue novel ideas, creative process, and exparimentation

Risk Taking

To take bold actions rather than being cautious

Value (definition)

Utility beyond price paid Required to facilitate exchange

What does "VP" stand for? (Business Model Canvas)

Value Propositions

Ploy

a specific move designed to outwit or trick competitors