MGMT 493 Final Berns

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Process information comes after product innovation

vis versa product innovation comes before process innovation

Vision and Mission

want a firm wants to accomplish how to accomplish the vision

Popular Business Models

1. Razor-Razorblades 2. Subscription 3. Pay as you go 4. Freemium 5. Wholesale 6. Agency 7. Bundling

Roadster S,X,3

Tesla is known for the? 3 of models are?

In what stage of the industry life cycle are standards established?

The Growth Stage

Co-opetion

Cooperation by competitors to achieve a strategic objective.

Porter's Five Forces

Helps understand profit potential in different industries

lewin suggested organizational change through 3 stages

unfreeze, change, refreeze

Facebook

uses 3 pillers

Emergent Strategy

-

Intended Strategy

-

Tactical Strategy

-

Unrealized Strategy

-

Joseph Schumpter

A 20th century economist that first associated entrepreneurship with the phrase "creative destruction"

Cash Cows (BCG Matrix)

-low growth, high market share -income finance stars and question marks

How many stages of globalization are there?

3

how many stages are in the industry innovation life cycle?

5

How many dimensions did hofstede have?

6 dimensions

exporting contracts

?

Stakeholder Strategy

A 5-step process recognizing stakeholders' claims. Managers must note 3 stakeholder attributes: Power, Legitimacy, Urgency 1. who are our stakeholders? 2.What are our stakeholders' interests and claims? 3.What opportunities and threats do stakeholders present? 4.What economic, legal, ethical and philanthropic responsibilities do we have to our stakeholders? 5.What should we do to effectively address the stakeholder concerns?

upper-echelons theory

A conceptual framework that views organizational outcomes—strategic choices and performance levels—as reflections of the values of the members of the top management team.

effectively organized

A firm must be ______ to capture value

dynamic capability

A firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage.

Resourced Based View

A model that sees certain types of resources as key to superior firm performance.

sponsor

A person or group who provides resources and support for the project, program, or portfolio and is accountable for enabling success.

industry convergence

A process where formerly unrelated industries begin to satisfy the same customer need.

Moral hazard

A situation in which information asymmetry increases the incentive of one party to take undue risks or shirk other responsibilities because the costs incur to the other party.

casual ambiguity

A situation in which the cause and effect of a phenomenon are not readily apparent.

strategic commitments

Actions to achieve that mission that are; costly, long-term oriented, and difficult to reverse

AFI

Analysis, Formulation, Implementation

BRIC

Brazil, Russia, India, China

path dependency

Business models do not include ___________.

An example of an external transaction cost would be ___________ and an internal transaction cost would be __________

Contract enforcement; employee training

Organic organization

Characterized by a low degree of specialization and formalization, a flat organizational structure, and decentralized decision making.

strategic trade-offs

Choices between a cost or value position. Such choices are necessary because higher value creation tends to generate higher cost.

Best Buy

Competitor- Circuit City CEO- Joly

CAGE stands for

Culture Administrative Geographic Economic

economic value created

Difference between value (V) and cost (C), or (V - C).

sustainable competitive advantage

Doing different activities & doing something better

Competition decreases

During industry growth

explicit knowledge

Easily codified and documented

in class examples of governance and ethics

Epi Pen, wells fargo, martin skreli

Heinz example taled about the potential conflicts of acting _______ and ___________

Ethically; legally

horizontal trend

Ex) 2015-2019

Quanitative and Qualitative

Firms asses advantage through _______ & _________

mergers and acquisitions

Fragmented industry is made into consolidated industry through

Differentiation

Generic business strategy that seeks to create higher value for customers than the value that competitors create.

Cost Leadership

Generic business strategy that seeks to create the same or similar value for customers at a lower cost.

Resource bundles heterogeneity

In class we cut paper into shapes and had to make trades with other students resources, what were we using?

The apple case follows __________ who worries about competition with ___________

Jeff Bezo; Apple, google, facebook

What did the Merek case highlighted both

M&A and Innovation

Stakeholder's liquidity

Mangers don't consider _____ during impact analysis

BCG Matrix 2 product dimensions are

Market growth and relative Market Share

Most M&A fail to live up to performance expectations

Most M&A fail to live up to performance expectations

Compustat

Not a library database

Blue Ocean Strategy

Offer a differentiated product or service at a low cost

What allows for the most integration on the make-or-buy continuum?

Parent- subsidiary relationship

non-equity alliance

Partnership based on contracts between firms. The most frequent forms are supply agreements, distribution agreements, and licensing agreements.

Facebook Case

Perspective was of Sandberg Their quest was to generate more ad revenue

PESTEL

Political Economic Sociocultural Technological Ecological Legal Creates opportunities & threats

focused cost leadership

Same as the cost leadership strategy except with a narrow focus on a niche market.

Economics of Scope

Savings that come from producing two (or more) outputs at less cost, then producing each output individually, despite using the same resources and technology.

In the Merek case who was their noteworthy merger with?

Schering-Plough

SMART

Specific, Measurable, Attainable, Realistic, Timely

scenario planning

Strategy planning activity in which top management envisions different what-if scenarios to anticipate plausible futures in order to derive strategic responses.

Alfred Chandler said

Structure follows Strategy

SCP

Structure, Conduct, Performance

Apple case follows

Tim Cook

BWB

Used triple bottom line

VRIO

Valuable Rare Costly to Imitate Organized to Capture Value

Marketing and Sales

Value chain analysis' primary activity

Vertical trend analysis

Viewing ratios for one given period of time is an example of _______

Best Buy

Was not affected by their monopoly

cannibilization

What does not describe isolating mechanisms firms use?

Low costs

What does not drive up volume?

Unrealized

When a firms strategy falls by the wayside they become

monopolistic competition

When an industry has many firms, a differentiated product, some obstacles to entry, and the ability to raise prices for a relatively unique product while retaining customers.

Oligopoly

When an industry is consolidated with a few large firms, differentiated products, high barriers to entry, and some degree of pricing power.

perfect competition

When the industry is fragmented and has many small firms, a commodity product, ease of entry, and little or no ability for each individual firm to raise its prices.

Monopoly

When there is only one, often large firm supplying the market. The firm may offer a unique product, and the challenges to moving into the industry tend to be high. Considerable pricing power.

Competitive Parity

When two or more firms perform at the same level

Top-Down

Works best when the environment doesn't change much

1. Corporate 2. Business

________ Strategy determines where to compete _________ Strategy determines how to compete

in the BCG framework a question mark has the potential to become

a Star or a Dog

conglomerate

a company that combines two or more strategic business units under one overarching corporation; follows an unrelated diversification strategy

The Heinz case discussed a dilemma between

a druggist and a potential buyer

organizational inertia

a firm's resistance to change the status quo, which can set the stage for the firm's subsequent failure

Patent

a form of intellectual property that gives the inventor exclusive rights to benefit from commercializing a technology for usually 20 years in exchange for public disclosure of the underlying idea

Architectural Innovation

a new product in which known components, based on existing technologies, are reconfigured in a novel way to attack new markets

Trademark

a symbol, word, or words legally registered or established by use as representing a company or product. renewable every 10 years

Tapered Integration

a way of orchestrating value activities in which a firm is backwardly integrated but but also relies on the outside market firms for some of its supplies and/or is forwardly integrated but also relies on outside market firms for some of its distrobution

greenfield operation

building new, fully owned plants a facilities from scratch

What was GE's big divestment?

capital division

formalization

captures the extent to which employee behavior is steered by explicit and codified rules and procedures

Delta case

challenged by changing demographics of customers

Forward vertical integration

changes in an industry value chain that involve moving ownership of activities closer to the end (customer) point of the value chain

Backward vertical integration

changes in an industry value chain that involve moving ownership of activities upstream to the originating (inputs) point of the value chain

mechanistic organization

characterized by a high degree of specialization and formalization and by a tall hierarchy that relies on centralized decision making

Organizational Matrix Structure

combines the functional structure with the multidivisional structure( M-Form) Typically has geographic and SBU divisions

Non-equity alliances are the most

common form of alliances

corporate governance

concerns the mechanisms to direct and control an enterprise in order to ensure that it pursues its strategic goals successfully and legally

Borrowing can include

contract licensing equity

norms

define appropriate employee attitudes and behavior

values

define what is considered important

Internal Stakeholders

employees, owners, board of directors

Firm Effects

firm performance attributed to the actions managers take

According to the CAGE framework

greater cultural similarity of two regions increases trade

Functional structure

groups employees into distinct functional areas based on domain expertise

A firms structure determines

how the work efforts of individuals and teams are orchestrated and how resources are distributed

What is the 4 steps in the innovation process from start to finish?

idea invention innovation imitation

2 paper tower in class activity was to demonstrate

imitation of successful ideas

diseconomies of scale

increases in cost per unit when output increases

2 types of control

input controls and output controls

Offshoring can include both

insourcing activities and outsourcing activities

BWB

is a B corporation

principal

is the individual who gives authority to the agent.

GE CEO is _________ who refocused the companies offerings

jeff immelt

tacit knowledge

knowledge that cannot be codified

customer-oriented

less specific, more flexible

Porter Shared Value

maintain a dual focus on shareholder value creations and value creation for society

project-oriented

more specific, less flexible

What are the components of innovation?

novelty usefulness implimentability

Adverse selection

occurs when information asymmetry increases the likelihood of selecting inferior alternatives

NOT STRATEGY

operational effectiveness & benchmarking

Equity Alliance

partnership in which at least one partner takes partial ownership in the other

External Stakeholders

people or groups in the organization's external environment that are affected by it

open innovation

practices and processes that encourage the use of external as well as internal ideas as well as internal and external collaboration when conceiving, producing, and marketing new products and services

Market Cap

product of the number of outstanding shares and share price

information asymmetry

situation in which one party is more informed than another because of the possession of private information

Which of the following products and services did the amazon case discuss?

smart devices, online content, and web services

3 primary forms of organizations we talked about in class

sole proprietorship partnership corporation

Skunkworks

special creative units set free from the normal structure for the purpose of innovation

4 components/ building blocks of organizational structure

specialization formalization centralization hierarchy

return on risk capital

stock price appreciation + dividends received over a specific period

multidomestic strategy

strategy pursued by MNEs that attempts to maximize local responsiveness, with the intent that local consumers will perceive them to be domestic companies

international strategy

strategy that involves leveraging home-based core competencies by selling the same products or services in both domestic and foreign markets

capital

tangible resources the company owns is called

consumer surplus

the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

producer surplus

the amount a seller is paid for a good minus the seller's cost of providing it

Centralization

the degree to which decision making is concentrated at upper levels of the organization

Bank of America case focused on

the financial crisis and actions leading to it

resource stock

the firm's current level of intangible resources

Absorbtive Capacity

the firms ability to understand external technology developments, evaluate them, and integrate them into current products or create new ones

business level strategy

the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market

merger

the joining of two independent companies to form a combined entity

Delta case discussed how airline competition is increasing in

the middle east

local resposiveness

the need to tailor product and service offerings to fit local customer preferences and host country requirements

socialization

the process by which individuals internalize the values, beliefs, and norms of a given society and learn to function as members of that society

Organizational design

the process of creating, implementing, monitoring, and modifying the structure, processes, and procedures of an organization

Horizontal Integration

the process of merging with competitors, leading to industry consolidation

Acquisition

the purchase or takeover of one company by another *can be friendly or unfriendly

core competencies

those functions that the organization can do as well as or better than any other organization in the world

Artifacts

those objects that consist in the organization

80% learning curve

when the cumulative output is double the cost per unit goes down 20%

National competitive advantage

world leadership in specific industries


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