MGMT 309 - CHAPTER 7

Firms that successfully implement which type of strategy are generally able to charge more than competitors because customers are willing to pay more to obtain the extra value they perceive?

differentiation

the following describes which strategy as part of the porters generic model? Manufacturing differentiate by (a) emphasizing quality and meeting specific customer needs, over reducing costs; (b) sometimes keeping inventory on hand for customers to have easy access; and (c) engaging in costly customization to meet customer needs.

differentiation

macy's and Kmart demonstrate what type of miles and snow strategy?

reactor no strategic approach

what are the three main ways to become a diversified firm?

- develop new product - merger or acquisition - replacement of customers or suppliers

what is a strategy? strategic management?

a strategy is the comprehensive plan used to achieve its mission/goals strategic management is ongoing and constant process aimed at formulating and implementing effective strategies

the following is an example of what in relation to distinctive competance? Caterpillar obtained a sustained competitive advantage when the U.S. Army granted it a long-term contract during World War II.

it was able to gain a competitive advantage bc it was built on historical circumstances so it would be a barrier to imitation

In which stage of the product life cycle should an organization begin to search for new products or services as part of its strategy?

maturity

what are the three types of classification / models when assessing alternatives for business level strategies?

- porter's generic (focus strategy, differentiation, overall cost leadership) - miles and snow typology (prospector, defender, analyzer, reactor) - strategies based on the product lifecycle (introduction, growth, maturation, decline)

what are two ways for an organization to address if weaknesses?

1. by investing to obtain strengths that are need to implement strategies 2. by modifying the mission to align with existing capabilities

To balance the three goals of global efficiencies, multimarket flexibility, and worldwide learning, international businesses typically adopt one of four strategic alternatives.

1. home replication strategy 2. multi domestic 3. transnational 4. global

what is the difference in focus between the BCG matrix and the GE business screen?

BCG matrix - market share and growth rate GE screen - attractiveness and competitiveness

How can a global firm capture economies of scale in its production process?

By building factories that serve more than one country economies of scope and scale are associated with multi-market advantages?

Petra is uncertain where to begin in formulating strategy for her division. What is a good place for her to start?

SWOT analysis

the starting point for formulating strategies is

SWOT analysis have to understand your strengths, weaknesses, opportunities and threats in order to create a plan to achieve organizational goals

miles and snow organizations using the _____________ strategy tighten financial controls and high flexibility.

analyzer encouraging creativity at low costs

firms like Uber and IBM demonstrate what type of miles and snow strategy?

analyzer maintain their current market but look for some innovation

Teresita has a successful business that produces sauces, salsas, and salad dressings. Recently, she stopped buying labels from her supplier because she found she can make them less expensively in-house. This also allows her to change labels for seasonal and small batch items. Which type of diversification did Teresita engage in?

backward vertical

In which way do organizations determine alternatives for working in a particular industry or market?

by setting business level strategies

The market for mountain bikes, while large, is not expected to grow much more. Ruff'n'Tuff Bikes has a major share of that market. According to the BCG matrix, Ruff'n'Tuff Bikes is a _____.

cash cow

Decisions about which businesses, industries, and markets an organization will enter, and how to manage these different businesses, are based on an organization's ________________ strategy

corporate

Which of the following helps an organization perceive, or even generate, new opportunities in its environment?

creativity flexibility would be an organizations ability to respond to changing conditions

Product differentiation, low costs, and the development of new products or services are key to a company's success at which stage of the product life cycle?

decline during this stage the demand decreases so they have to try to change things to continue to do well

miles and snow implementation These firms downplay creativity and innovation in favor of "lowering costs or improving the performance of their current products creativity

defender

firms like BIC and eBay demonstrate what type of miles and snow strategy?

defender protect current market

Texas Instruments uses a (deliberate or emergent) strategy scotch tape manufactured by 3M uses a (deliberate or emergent) strategy

deliberate (rational, systematic, planned) emergent (developed in absence of chosen strategies)

what are the two types of organizational strength as part of the SWOT analysis

distinctive competencies common strength organizations that can exploit their distinctive competencies obtain a competitive advantage

to stay consistent, often a firm implementing a prospector strategy will not switch to a defender strategy when it has successfully created a new business or market. true or false

false

managers implementing business level strategies need to be able to integrate the activities of what organizational functions?

finances and accounting manufactoring culture marketing

Using which strategy allows an organization to concentrate on a specific regional market, product line, or group of buyers?

focus

strategy _________ focuses on what the strategy is while strategy ______________ focuses on how the strategy is achieved

formulation implementation

cutting out the middleman and going to sell directly to the customers of your customers is an example of what type of diversification

forward vertical integration bass and co bypassed retail outlets and started selling directly to individual customers

what are the three sources of competitive advantage for international firms?

global efficiencies multi-market flexibilities worldwide learning

Kaia's firm took its distinctive competencies and used those when expanding into foreign markets. This provided it with the same firm-specific advantage it had in its original location. Which strategic alternative for international business is Kaia's firm using?

home replication

Tyson Foods has capitalized on ____________________ (what type of international advantage) to boost sales of packaged chicken. The firm responded to increased demand for chicken breasts by health-conscious US consumers by exporting the legs, thighs, and other parts of the chicken to other markets which desired the other chicken parts.

multi-market flexibility responding to change in one region by making changes in other regions

Honda diversified from the motorcycle market to cars when it learned how to make fuel-efficient reliable small engines what type of diversification for implementing corporate strategy?

new product

the two major tools for managing diversification are

organization structure and portfolio management techniques

the following describes which strategy as part of the porters generic model? support cost leadership by focusing on "simple product attributes and how these product attributes meet customer needs in a low-cost and effective manner

overall cost leadership

the iphone example perfectly illustrates what type of model that is used to develop and analyze strategy?

product lifecycle

Organizations using the _________________ strategy decentralize their organization structure, i.e., they delegate major decision-making responsibility to middle- and lower-level managers. (from miles and snow)

prospector bc they focus on innovation, they need for their lower level managers to be able to make quick decisions

firms like amazon, rubbermaid and 3M implement what type of miles and snow strategy?

prospector constantly seeking innovation and flexibility

which strategy for formulating corporate level strategies allows the organization "to exploit its strengths and capabilities in more than one business" and capitalize on synergy

related diversification

Economies of ______________, which allows firms to lower production costs by producing in large quantities. Economies of _______________, which allows firms to lower their production and marketing costs and increase their bottom line by sharing expenses across product lines.

scale scope

a well conceived strategy has 3 components. they are

scope distinctive competence resource development

for formulating corporate level strategies A weakness of this strategy is that the organization will suffer if the product is not accepted by the market or is replaced by a new one

single product other options are related diversification and unrelated diversification

Despite the growth of multiplex theaters in most population centers, Lighthouse Cinema has remained a popular entertainment option for the surrounding area, based on its small size and location. This movie theater's popularity and attractiveness as a destination are a(n) _____.

strength?

Polani's company is a leader in the creation of mobile phone cases, and it recently has expanded to make cases for tablets and laptops. Polani's company is using related diversification. What is an advantage of this strategy for the firm?

synergy

the two types of portfolio management techniques used for corporate level strategies are

the BCG matrix and the GE business screen

the more attractive the industry and the more competitive the position, the more inclined an organization should be to invest in a business. true or false

true

the unique social culture of southwest airlines and chick fil a are examples of barriers to imitating distinctive competence true or false

true

which strategy for formulating corporate level strategies corporate-level managers experience difficulties in providing helpful strategic guidelines due to inadequate knowledge of the unrelated businesses.

un related

If an organization has higher prices for a similar good or service, the prices are an organizational _____.

weakness if it is trying to sell the same product for a higher price than competitors, it is being restricted from having high levels of sale