ch 8- book

t

Companies manage the mix of SBUs for synergy and competitive advantage

b e

Which of the following statements concerning Porter's Competitive Strategies are incorrect? a. Nordstrom Stores adopts a differentiation strategy. b. Wal-Mart Stores adopts a cost leadership strategy whereas Sam's Club adopts a differentiation strategy. c. Jet Blue Airlines can be said to adopt a cost leadership strategy because of its aggressive pricing. d. The number of possible ways companies differentiate their products services can be said to be unlimited. e. When starting up a restaurant in a Hispanic neighborhood serving only Hispanic food, the company is adopting a focus strategy. Therefore, it is not possible for the company to also apply simultaneously the differentiation strategy.

b e

Which of the following statements concerning the BCG matrix are incorrect? a. Funding priority needs of SBUs and potential sources of funding are identified. b. Differentiation and Cost Leadership strategies are evaluated. c. Product cycles of SBUs are important factors d. Business growth rate and market share are important dimensions. e. It is particularly useful for middle managers when conducting an analysis of the product lines to carry and the number of functional departments to support the production of these products.

b d e

Which of the following strategies employed by companies when going global are incorrect? a. Trans-national strategy takes advantage of product integration and standardization while at the same time is responsive to each country' culture and market needs. b. The "think-global, act local" strategy is a phrase often used to describe the Multi-domestic strategy. c. The Export strategy is domestically focused and exports a few domestically produced products to selected countries. d. Globalization strategy tends to focus only on integration and standardization by applying uniform platforms in design, process, and products. It is often referred to the "think-local, act-local" strategy. e. Multi-domestic strategy tends to focus on being responsive to individual nation's cultural and market needs. It is also referred to as the "think-global, act-global" strategy.

global

_____ strategy: means product deisgn and ad strategies are standardized throughout the world. treats world as one market. standardization. theory is that everyone wants the same products saves u money a. global b. transnational c. multidomestic d. export

b

_____Strategy: blends standadization and customization. tough to do. a. global b. transnational c. multidomestic d. export

d

_____Strategy: domestically focused. sends out few domestic products to selected countries pay little attention to local responsiveness or global standardization a. global b. transnational c. multidomestic d. export

c

______strategy : handles markets independently for each country. adapt to local tastes and needs. customizatoin a. global b. transnational c. multidomestic d. export

t

biggest barriers are relatd to inability of ppl to adopt new bahaviors rather than lack or resources or planning

t

boston consulting group (BCG) matrix: market share to business growth rate stars- high and high. growth and expansion. cash cow- slow growth but high market share. dominant business in its industry, but mature. not new. question mark- new company. high business growth but lowmarket share. risky- could become a start, or fail and we would divest the dog- low low. divest (rid of it)

t

define a strategy- which is the plan of action that describes resource allocation and activities dealing with the environment

t

diversification- google buys youtube, amazon moves into consumer electronics. strategy of moving into a new line of business. trying to produce new kinds of valuable products and services related diversification- expanding to a new product line that is related to ur industry. cereal co goes into milk company unrelated- completely random. food company moving into apparel (tough to have a successful strategy)

t

embeddedness- effective strategy execution. means there is a deep understanding and acceptance of org direction and purpose throughout the org when the strategy is embedded, everyone s daily decisions and actions help move the firm in the right direction "in alignment'

t

four elements of competitive advantage are: core competencies synergy value target customer (market)

c d e

incorrect: a. When PepsiCo CEO Indra Nooyi makes the strategic decision to spin-off the group of fast food restaurants into Yum Brands, she is basing her decision on the distinctly different type of employee competencies needed in each industry to succeed. She concluded there is "not enough" synergy or relatedness between the two industries. b. During the recent global economic downturn, PepsiCo CEO Indra Nooyi makes the strategic decision to invest aggressively in the BRIC countries based on broadly stated information on these countries' GNP growth and demographic trends. c. Bloomingdale Stores can be said to adopt a cost leadership strategy. d. Costco Stores can be said to adopt a differentiation strategy. e. Southwest Airlines can be said to adopt a differentiation strategy because of its aggressive pricing.

b c d

incorrect? a. Business growth rate and market share are important dimensions in the BCG matrix. b. According to Porter's 5-forces model, threat from substitute products is synonymous with potential new entrants affecting industry competition. c. In a BCG matrix, Questions Marks should never be divested. d. Starbucks company removed the word "Coffee" from its logo because it plans to get out of the coffee business. It is planning to diversify into other products and services because there is too much competition in the coffee business. e. Starbucks created Seattle's Best brand and sells their specialty coffee through Sub-way stores in order to compete directly with other fast food restaurants such as McDonalds and Dunkin Donuts.

t

levels of strategy: corporate level- what business are we in business level- how do we compete functional level - how do we support business level strategy

b

levels of strategy: who asks : how do we compete a. corporate level b. business level c. functional level

c

levels of strategy: who asks : how do we support business level strategy a. corporate level b. business level c. functional level

a

levels of strategy: who asks : what business are we in a. corporate level b. business level c. functional level

t

levels of strategy: business level how do we compete ? this pertains to each business unit or product line. srategic decisions deal with advertising, direction, extent of research and design, product changes, new product development, expand service lines

t

levels of strategy: corporate what business are we in? pertains to the org as a whole. stragetic actions at this level usually relate to expanding the company, aqcuiring a new business, joint ventures, etc.

t

levels of strategy: functional level pertain sto the major functional departments within its business unit. involve all of rthe major functions including finance, r&d, marketing and manufacturing.

t

must . have: visible leadership- primary key to success. influence ppl to adopt to new behaviors needed to put strategy into action. motivate ppl. model behaivor . shape culture clear roles and accountability- individual actions contribute to achieving strategy. delegate authority to individuals and teams candid communication-open lines of communication. encourage debate and honesty which encourages teamwork and collaboration appropriate hr practices- recruit employees, manage promotions, provide training, lays off. to achieve strategic goals.

t

porters 5 competitive forces: -potential new entrants- barriers and potential to entry for competitors. internet reduces barriers -bargaining power of buyers- informed consumers become empowered. internet gives us info about everything. we know how to bargain cuz we knows what else is out there -bargaining power of suppliers- web gives suppliers access to more customers -threat of subsittute products- if ur a sugar company, when they came out w stevia cuz of the health trend, hurt the sugar company. internet made a greater threat bc ppl google alternatives to everything. offers of low cost airline tickets on the internet hurt travel agenices -rivalry among competitors- hard for companies to distinguish themselves among similar companies bc of the internet.

t

porters competitive strategies- differentiation- want product to appear unique. can reduce rivalry and fight off threat of subsittute products bc customers are loyal to the brand broad-, Q1- acts in a flexible way, thinks out of the box narrow (focused) Q3 - value flexibiltiy and customer intimacy, target consumer . concentrate on a market/buyer group . narrow target market! cost leadership- cost reductions, tight cost controls to product products efficiently. doesnt always mean low prices. doing the most w their money. internal prices low so they can provide low costs for their customers/make profit. broad Q2- strong central authority, easy manufac. technologies, efficient dist. systems narrow (focused) Q4 - uses this at a directed target consumer. maintain customer loyalty .concentrate on a market/buyer group . narrow target market

c d

potential for new entrants is connectd with: a. Rivalry among competitors b. Threat of substitute products c. Barriers to entry into market d. New entrants becoming new competitors. e. Bargaining power of customers and suppliers

t

strategic management process: evaluate current mission goals and strategies scan internal(core competencies, value, synergy) and external ( national global) invironment

t

strategic management: refers to the set of decisions and actions used to formulate and execute startegies that will provide a competitively superior fit between the org and environment "what trends are happening in the comeptitive environment? who are competitors? what are they good/bad at? who are our customers? what do they like ? "

t

strategic thinking means to take the long term view and see the big picture considering how the organization and the competitive environment fit together good for profit and non profit businesses

t

strategy formulation- assessing external and internal environ. and putting goals into strategy strategy execution- use of managerial and organizational tools to direct resources toward accomplishing the strategic results

e

strategy formulation: heart of strategy. combo of benefits recieved and costs paid. a. target customers b. exploit core competence c. competitive advantage d. achieve synergy e. create value

c

strategy formulation: what sets the company apart from other comapnies a. target customers b. exploit core competence c. competitive advantage d. achieve synergy e. create value

d

strategy formulation: when parts as a whole work better than acting alone. can create additional advantage with existing resources (provides a big boost to the bottom line) a. target customers b. exploit core competence c. competitive advantage d. achieve synergy e. create value

b

strategy formulation: something the company does especially well in comparison to its competitors. represents a competitive advantage a. target customers b. exploit core competence c. competitive advantage d. achieve synergy e. create value

t

strategy formulation: competitive advantage should do the following: target customers exploit core competence achieve synergy create value

t

swot- s/weaknesses are internal oppurtiinites (characteristics that can help the org achieve or exceed its stragetic goal) and threats are external

b

understanding corporate level strategy: organized by business growth rate (how fast co is growing) and market share (how big u are in the market and how much ur shares are worth compared to others) a. portfolio strategy b. boston consulting group (BCG) matrix c. diversification

t

understanding corporate level strategy: portfolio stratgegy boston consulting group matrix diversification

a

understanding corporate level strategy: sbu- (line of business) strategic business units-(put in a protfolio) like individual investors have an investment portfolio, corporations do too. unique business mission, product line, competitors, and markets . mix of business units and product lines that fit togehter ina a logical way to provide synergy and comeptitive advantage a. portfolio strategy b. boston consulting group matrix c. diversification

t

vertical integration- company expands to the producers and manufacturers of their products. really helps w synergy. gain way more control over everything

b d

which of the following statements concerning the 5-forces affecting Industry Competition are incorrect? a. Southern California had a long recession in the early 90s because aerospace companies were dependent on a single customer or buyer- the U.S. Defense Department. b. Stars and Question Marks require considerable funding to make them into Cash Cows. c. Oil prices often tend to go up because of the strong bargaining power of OPEC supplier nations. d. Barrier to entry is connected with power of the supplier. e. The numerous automobile companies competing in the U.S. can be said to have an oligopoly type of rivalry