Management: Environments and Strategic Management

The general environment analysis is composed of broad societal dimensions influencing the industry or firms within it. The acronym for these dimensions is

PESTEL

Macy's online store differs from the in-store experience. The online store offers free delivery on larger purchases, free returns, extensive information about the products, and reviews from other customers. Why might Macy's do business this way?

Many of the strategies needed to succeed in e-commerce are very different from competing in a non-digital environment. Many of the strategies needed to succeed in e-commerce are very different from competing in a non-digital environment.

Strategic management

considers the entire organization and how the pieces fit together

Identifying the target customer and asking about customer demographics (age, income, location, gender, politics, etc.) is part of

customer analysis

The five components of industry environment are

customers, competitors, suppliers, regulations, and advocacy groups

Michael Porter defined classified competitive strategies based on a grid of price strategy and target markets. Tesla manufactures electric cars. What is Tesla's strategy in this grid?

focused differentiation

In 1956, Dr. Hubbert accurately predicted U.S. oil production for the next 50 years. U.S. oil production started to decline in1970, causing volatile markets and, for strategists, ________. The development of fracking around 2010 restored the U.S. as a major oil producer.

resource scarcity

If a manager is listing resources that can be used for a competitive advantage, which item would NOT be on the list?

the economy

The first step in the strategy process includes

to define the vision, mission, and values statements of the organization

A highly competitive market suggests that the competitors are aggressively trying to take market share from their rivals. One of the simplest ways to do this is to lower prices. This ________ hurts the profitability of the whole industry.

competitive rivalry

Warren Buffett, a famous investor, has some guiding rules. One is "Invest within your circle of competence," meaning if you don't understand the business, don't invest. He sold positions in Freddie Mac because he did not understand or like financial derivatives. He called derivatives "weapons of mass destruction." In the context of strategy, financial firms that use derivatives are

complex

Companies strive to provide a product or service that is distinct, or ________, in some way from their competitors.

differentiated

Financial strength can be a competitive advantage. In the Great Recession, General Motors went bankrupt, but Ford had acquired long-term financing beforehand that carried it through the downturn. This insight is part of

competitive analysis

The advertisements for the Apple MacBook show an edge-on image of a MacBook with the caption "MacBook: Light. Years ahead." This refers to the lightweight design and the advanced tech inside. This is Apple's

value proposition

Amazon has hired a strategic consultant to consider a partnership with Porsche. Amazon would sell Porsche's cars. As part of a VRIO analysis, the consultant would realize that

Amazon is not organized to realize the value of partnering with Porsche because Porsche must sell through local dealers.

Creating resources that meet the VRIO criteria are strategically important to a firm because:

Firms that possess these types of resources may be able to experience a sustained competitive advantage.

Which statement best captures the meaning of a value proposition?

It explains why the customer would choose the firm's product over alternatives or no product at all.

Bharti Airtel is the largest cellular provider in India, with more than 300 million customers as of 2014. It also supplies broadband and telephone services, as well as many other telecommunications services to both domestic and corporate customers. Until a few years ago Airtel did not own its own towers, which was a particular strength of some of its competitors, such as Hutchison Essar. Towers are important if your company wishes to provide wide coverage nationally. In a SWOT analysis, this point would be ________.

a weakness

Bharti Airtel is the largest cellular provider in India, with more than 300 million customers as of 2014. It also supplies broadband and telephone services, as well as many other telecommunications services to both domestic and corporate customers. Bharti Airtel is considering a customized version of the Google search engine, which will enhance broadband services to customers. The tie-up with Google will bolster the Airtel brand and also provide advertising opportunities in India for Google. A SWOT analysis was done. This partnership represents ________.

an opportunity

The threat of new entrants in Porter's Five Forces analysis is often the most important force affecting an industry. In the food truck industry, for example, it is easy for new firms to enter and compete. The food truck industry would benefit if there were ________, such as required and restricted licenses.

barriers to entry

In the summer of 1998, Dr. Rumelt, a professor and consultant, got an opportunity to talk with Steve Jobs about strategy. Rumelt argued that everything we know about the PC business says that Apple cannot really push beyond a small niche position. The network effects are just too strong to upset the PC standard. He then asked for Jobs' strategy. Jobs said, "I am going to wait for the next big thing." Nearly twenty years later, Apple is the most valuable publicly traded company in the world. This story shows that in the context of strategy, the tech market is ________.

dynamic

Amir goes to industry conferences twice a year. The prepared speeches contain few surprises, but the side conversations give him a read on what other firms are doing and perhaps the trade-offs that they see in the industry. Amir is engaged in

environmental scanning

E-commerce includes online and smartphone sales. The younger the shopper, the more likely he or she is to conduct "business" using a smartphone. E-commerce refers to

exchanges or transactions that occur electronically exchanges or transactions that occur electronically

A robust competitive analysis will allow you to focus on those companies that will compete for customers

in your target market

A company is crafting a value proposition for its flagship product. The goal is to communicate to customers the main reason the product

is best suited to their needs

Michael Porter defined classified competitive strategies based on a grid of price strategy and target markets. What is Walmart's strategy in this grid?

overall low cost

A competitive analysis of Google and Microsoft would look at their ________ . Both pay high salaries and offer great benefits. But their incentive structures are different. Google encourages collaboration and Microsoft encourages competition. Google's employees have been more innovative than Microsoft's.

personnel strategy

The general environment analysis considers broad societal dimensions influencing the industry or firms within it. The general environment areas include

political, economic, social, technological, environmental, and legal

The second step of the strategy process, Strategy Formulation, includes

prioritizing the tactics most important to achieving the objectives

Amazon relies on FedEx, UPS, the USPS, and others to deliver packages to consumers. These delivery companies are Amazon's

supply chain

Strategic management's first function is deciding how to compete. The second function is to make sure

that the people in the organization support the strategy

In the resource view of strategy, VRIO stands for:

valuable, rare, inimitable, and organized

A company wishes to convince customers that its product or service provides more value to them than a competitor's product or service. That is, it offers a

value proposition

Cavanagh Altar Breads makes communion wafers or crackers for Catholic services. Historically, the wafers were made by local nuns or sisters, but automation and mass production lowered costs significantly. The sisters buy the wafers wholesale and resell them to local churches. From the perspective of the bakery industry, Cavanagh's strategy is

focused and low cost