Strategy

Identify two benefits of constructing a strategic group map.

1. Identifying which rivals are similarly positioned and are thuse close rivals and which are distant rivals. 2. Not all positions on the map are equally attractive.

Identify and briefly explain any three factors that lead to weak bargaining power on the part of buyers.

1. If buyer demand is strong - buyers will not have as much bargaining power. 2. When buyers switching brands to competitors cost is high 3. When a brand reputation is important to the buyer or when a seller product or service can't be matched.

24. Identify and briefly explain any three factors that lead to strong bargaining power on the part of buyers.

1. If buyers pose a credible threat of integrating backward into the business of sellers. 2. If buyer demand is weak. Weak or declining demand creates a 'buyers market'. 3. If buyers are wll informed about sellers products, prices and costs. The

Identify and briefly explain any three factors that lead to strong bargaining power on the part of suppliers.

1. If the item being supplied is not a commodity that is readily available from many suppliers. Suppliers have little bargaining power when industry members have ability to source from alternatives. 2. If certain inputs are in short supply. Suppliers of items in short supply have some degree of pricing power. 3.Industry members are not major or large customers of suppliers.

Identify and briefly explain any two of the factors that influence the strength of competition from substitute products.

1. whether substitutes are readily available and attractively priced. The presence of readily available and attractively priced substitutes creates competitive pressure by placing a ceiling on the prices industry member can change. 2. Whether buyers view the substitutes as comparable or better in terms of quality, performance, and other relevant attributes. Customers are prone to compare performance and other attributes as well as price.

A single-business company has three levels of strategy. Name and describe each level

Corporate/Business strategy - The overall companywide game plan for a managing a set of businesses. How to strengthen market position and gain competitive advantage. Functional-area strategies- add relevant detail to the hows of overall business strategy. Provide game plan for managing a particular activity in ways that support the overall business strategy. Operating strategies- Add detail and completeness to business and functional strategy. Provide a game plan for managing specific lower-echelon activities with strategic significance,

What is the connection between a companys strategy and its questo for sustainable competitive advantage?

Crafting a strategy that yields a competitive advantage over rivals is a companys most relialble means of achieving above average profitability and financial performance.

Define and explain the importance of the two elements of a company's business model.

Customer values proposition - established by company's overall strategy and lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value. Profit formula - describes the company's approach to determining a cost structure that will allow for acceptable profits given the pricing tied to its customer value proposition.

What is the meaning of the term "balanced scorecard"? What are the merits of using a balanced scorecard in judging a company's performance?

- is a widely used method for combining the use of both strategic and financial objectives, tracking their achievement, and giving management a more complete and balanced view of how well an organization is performing. Merits are: Increased creativity and unexpected ideas, provides management with a comprehensive picture of business operations, maximized cooperation

Explain the difference between a companys business model and a companys strategy

- strategy is a deliberate vision to get toward a desired long term goal. A way to get there. - model is a great tool to execute a business strategy. It helps you design how you want a company to look like in the future. Business model shows how the strategy will create value for customers.

Identify three factors that affect whether an industry does or does not present a company with a good business opportunity?

1. Bargaining power of buyers 2. Substitute products of firms in other industries 3. Rivalry among competing sellers

29. Identify and briefly describe five common barriers to entering an industry.

1. Cost and resource disadvantages not related to scale of operation. 2. Strong bran preferences and high degrees of customer loyalty. 3. High capital requirements- larger the total dollar investment needed to enter market successfully, the more limited the pool will be. 4. Restrictive regulatory policies. Government agencies can limit or even bar entry by requiring licenses and permits. 5. Strong network effects in customer demand. When customers are attracted to products many other people are using.

List five elements of an enterprises business strategy

1. Creating products and services that attract and satisfy customers. 2. Positioning the business in its sector 3. developing and deploying resources to create precious competitive capacity 4. to guarantee the operation of signigicant tasks 5. to attain the companys performance objectives

What are the two elements of a company's business model?

1. Customer values proposition 2. Profit formula

What are the five stages of the strategy making, strategy executing process and what does each on involve?

1. Developing a strategic vision - that charts the company's long term direction, a mission statement that describes the companys business, and a set of core values to guide the pursuit of the strategic vision and mission. 2. Setting objectives- for measureing the companys performance and tracking its progress in moving in the intended long term direction. 3. Crafting a strategy- for advancing the company along the path to managements envisioned future and achieving its performance objectives. 4. Implementing and executing the chosen strategy - efficiently and effectively. 5. Evaluating and analyzing the external environment and the companys internal situation and performance - to identify corrective adjustments that are needed in the company's long term direction, objectives, strategy, or approach to strategy execution.

Identify and briefly explain any four of the factors that influence the strength or intensity of competitive rivalry among an industry's member firms.

1. Rivalry is stronger in industries when the number of competitors increases and they become more equal in size and capability. Strong when there are numerous relatively equal sized places. 2. Rivalry is usually stronger when demand is growing slowly or declining. Rapidly expanding buyer demand produces enough new business for all industry members to grow. 3. Rivalry increases as it becomes less costly for buyers to switch brands. The less costly it is for buyers to switch their purchases from one seller to another, the easier it is for sellers to steal customers away from rivals. 4. Rivalry increases when sellers find themselves with excess capacity and/or inventory. Excess supply conditions create a buyers market, putting added competitive pressure on industry rivals to scramble for profitable sales levels.

Identify and briefly explain any three factors that lead to weak bargaining power on the part of suppliers.

1. Seller switching costs to alternative supplier is lower 2. There is a surge available in suppliers. 3. When industry members account for a big fraction of a suppliers total sales and continued high volume purchases are important to the well being of the supplier.

What are the three criteria for determining whether a company has a winning strategy?

1. Strategic fit 2. Competitive advantage 3. Performance

Give an example of an opportunity or threat in the macro-environment has impacted the fast food industry.

A sociocultural force can be a threat to the fast food industry. For example; if consumers are trying to live a healthier lifestyle, they may stop purchasing food from fast food restaurants. A sociocultural force can also be an opportunity. Millennials and younger generations have a stereotype that they don't like to cook and they look for convenience. This can give fast food restaurants more customers.

Explain why an organization needs a strategic vision. What purpose does a strategic vision serve?

A strategic vision can help an organization accomplish its long term goals. It creates present image and a future image of the organization. The entire organization needs to know where they are going in order to maximize profitability and have a competitive advantage over rivals.

What is the difference between a mission statement and a strategic vision?

A strategic vision describes the company's future course where the mission statements describes the company's present business scope and purpose.

What difference does it make whether a company has a sustainable competitive advantage or not?

Companies that don't have competitive advantage don't perform well longer that a brief period. A competitive advantage makes it more difficult for competitors to copy your strategy.

How does Henry Mintzberg's model of strategic planning differ from a top down strategic planning model?

His has 5 Ps - Plan, Ploy, Patter, Position, Perspective In top down - strategic objectives are determinded by the top management and the strategic plan based on these objectives is implemented top down.

What is the analytical value of studying competitors and trying to predict what moves rivals will make next?

It gives a company a better idea of what their rivals will do next. It gives them a chance to prepare countermoves. It also gives them a chance to take advantage of any openings that arise from a competitors missteps.

Why does a company's strategy tend to evolve over time?

Managers must modify and adapt the strategy in response to competitors, shifting buyer need and preferences, emerging market opportunities, new ideas for improving the strategy, and mounting evidence that the strategy is not working well.

Identify and briefly discuss at least three obligations of a company's board of directors in corporate governance and the strategy-making, strategy-executing process.

Oversee the company's financial accounting and financial reporting practices. Fiduciary duty to protect shareholders by exercising oversight of the company's financial practices. Dilligently critique and oversee the company's direction, strategy, and business approaches. - make independent judgments about the validity and wisdom of management's proposed strategic actions. Institute a compensation plan for top executives that rewards them for actions and results that serve shareholder interests - Operate the company in accord with shareholder interests.

Business Model

Sets forth how its strategy and operating approaches will create value for customers, while at the same time generating ample revenues to cover costs and realizing a profit. The two elements of a companys business model are its 1. customer value proposition and 2. its profit formula

Why is a sustainable competitive advantage so important to a winning business strategy?

Strategies that fail to achieve a durable competitive advantage over rivals are unlikely to produce superior performance for more than a brief time. Winning strategies enable a company to achieve a competitive advantage over key rivals that is long lasting.

Why is a company's strategy partly proactive and partly reactive?

The evolving nature of a company's strategy means that the typical company strategy is a blend of (1) proactive, planned initiatives to improve the company's financial performance and secure a competitive edge and (2) reactive responses to unanticipated developments and fresh market conditions. A company's strategy in totality (its realized strategy) thus tends to be a combination of proactive and reactive elements, with certain strategy elements being abandoned because they have become obsolete or ineffective.

16. A well-conceived strategic vision helps prepare a company for the future. True or false? Explain and justify your answer.

True. Without a vision for the future, a company will not know where it's going or where it wants to go. Having a vision includes knowing where they are and what they want to look like in the future.

Briefly explain the agency problem in organizations.

When one party is expected to act in another best interests. Usually referred to as a conflict of interest between a company's management and the stockholders. The manager should make decisions that benefit the shareholder even if it is in the manager's best interest to maximize his own wealth.

Should a company's strategy be tightly connected to its quest for competitive advantage? Why or why not?

Yes because a company is considered successful if it achieves a durable competitive edge over rivals. It also helps build loyal customers.

How do you know when you have a competitive advantage?

You are able to produce superior performance for a long period of time.

Sustainable competitive advantage

allows a company to attract sufficiently large numbers of buyers who have a lasting preference for its products or services over those offered by rivals, despite the efforts of competitors to offset that appeal and overcome the companys advantage. (a company achieves this when an attractively large number of buyers develop a durable preference for its products or services over the offering of competitors, despite the efforts of competitors to overcome or erode its advantage.

Strategy

set of actions that its managers take to outperform the company's competitors and achieve superior profitability