BADM 495

difference; preserve

A company can outperform rivals only if it can establish a ___________ that it can ___________.

trade-off; configured; integrated

A strategic position is important to understand and define because It sets the ___________ rules that define how individual activities will be _________ and __________

competitive advantage and innovation

How do companies succeed in international markets?

Ex: Word of mouth, existing customers spread the word and win new customers Low staff, poor service, more customers exposes more issues causing them to leave

How do resources drive their own growth and loss?

Helps the team set targets which are entered on the bottom line

How does the house lead to the bottom line?

The firm's profit does not affect the market price

How does your profit affect the price in low cost Advantage?

relationship matrix

How much each engineering characteristics affects each customer attribute

5 completely satisfied very loyal 3-4 satisfied easily switched to a competitor 1-2 dissatisfied very disloyal

How should the manager interpret the Levels of Satisfaction?

fixed; variable

If a manager wants to change the firm's Beta, she will change the proportion of _________ to _________ expenses.

resources; profit contribution; key staff

Manager use the quality curve to beat competitors by damaging the quality of its ________ Hit the _____________ of competitors' mid-range customers or products Capture competitors' __________

no sense; reduce

Managers who aim to maximize GAAP profit are invariably tempted to take actions that fundamentally make_________ and which actually _______ shareholder value

effect on industry structure which neutralizes rivalry

Mergers and consolidation

resources

Most capabilities are concerned with building and retaining ____________.

Type-3 Rivalry occurs when

Struggling for a share of activity from resources shared with competitors: consumer goods firms winning the largest share of retailers' shelf space or voluntary groups capturing a larger share of donors' total giving The fight for the best possible share of business from customers that are not exclusively with you

Pareto Optimality

The optimal solution, for a group or society, is achieved when the entire group is made better off up to the point where no further improvement can be made without making one person worse off in order to make another person better off. This idea is called _____________

effect on industry structure which neutralizes buyer power

The presence of intermediate customers, who are not the end users can influence the purchasing decisions of the customers on their end, and therefore neutralize the industry structure.

state of mind; detecting; measuring; managing

The principle behind state-of-mind intangibles is the core concept of cognitive psychology, that ____________ drives behavior- so ___________, ___________, and ___________ the state of mind is key

catalysts; challenger; advantage; compete

The role of Government is to be a _________ and __________. Push it's firms to gain _________ and ___________.

Its managers put their focus on the wrong financial measures that rendered their internal financial controls useless.

The root cause of the Enron failure is attributable to?

operational effectiveness; strategy

The root of the problem, of competitive advantage being only temporary, is the failure to distinguish between ________________ and ___________

Ockham's Razor

it states that the simplest explanation for any phenomenon is likely to be the best.

Join us

(become a customer; accept a job)

Do more or less

(buy more from us; work less hard)

Leave us

(stop being a customer' resign from a job)

These conclusions are then used to develop a strategy that can both exploit opportunities that may arise while at the same time being robust enough to account for any dangers that may threaten those futures.

.Planning is required for determining a "desired" state. Thus, planning is important in achieving..?

Tradeoffs

A sustainable strategic position requires ___________

purchase goods; services

According to a recent survey, 80% of respondents stated that their perception of the ethicality of a particular company's business practices has had a direct effect on their decisions to _____________ or ___________ from that firm

High, higher / low, lower

All else equal, a firm with a ____ Beta will have a(n) _________ cost of capital.

Capabilities

Are activities we are good at doing. Are about doing something, can be expressed as a verb (marketing, hiring, serving customers, developing products) or the noun(product development, recruitment and so on)

effect on industry structure which neutralizes the threat of entry

Barriers to entry are factors or conditions in the competitive environment of an industry that make it difficult for new businesses to begin operating in that market.

? We allow consumer surplus lost for long-run outcomes.

Consumer surplus lost" is the cost to society for..?

Determined by the cost of the least efficient producer that is necessary to fill the market demand.

David Ricardo's Rent Theory explains why the price of commodities is __________

How should the manager decide what actions to take Stage 1 2-3 (dissatisfied)

Deliver the basic product or service elements as expected of anyone in the industry

Calculate the Competitive Growth Rate Calculate the Sustainable Growth Rate Establish the Growth Corridor

Draw the Growth Corridor for a firm with the following performance parameters

better-off test

Either the new unit must gain competitive advantage from its link with the corporation or vice versa.

as a percentage of reported net income

Enron management's annual incentive plan was funded..?

I1)no plausible set of relationships between the values in the strategy 2)management persists with unfeasible strategies 3)organizations also under-invest in strategic alternatives

Few firms carry out fact-based analysis and this is a strategic problem because..?

Organizational dishonesty; mismatch of values

Greater instances of illness and absenteeism, lower job satisfaction, decreased productivity and higher turnover, are all associated with _____________ and ____________.

increased surveillance

Greater instances of retaliation with a variety of counterproductive, even hostile, behaviors is associated with _____________

More fixed, higher breakeven / more variable, lower breakeven

In general, what is the impact on the breakeven point caused by changing your overall payroll/compensation system ______________

Competitive growth

In strategy Dynamics ch. 10 according to the authors, the single most important factor determining the minimum sustainable growth rate is _______________

Sensor = measures the ACTUAL state

In terms of Control Theory, in controlling the performance of the firm, financial statements represent a critical element referred to as the __________.

decrease

Increasing the frequency of the feedback cycle will ________________ the time to get information

Putting resources into some areas you are able to refrain from costly options in other areas. This creates a competitive advantage because competitors may not be able to recognize the trade-off.

Linkages exist when the way in which one activity is performed affects the cost or effectiveness of other activities. These often create trade-offs in performing different activities that should be optimized. Why?

Industry Structure

It drives competition and profitability, and sets industry profitability in the medium and long run

It is resource flows that determine how performance changes, and those flows depend, either directly or indirectly, on management decisions (as well as on existing resources and other factors). It therefore makes sense to use information on flow rates to inform the decision that influences them.

It is possible to improve policies substantially by recalling a key principle of how a business system actually works..?

strategic positioning; product; product line

Perception Maps, based on bundles of Customer Attributes, is(are) often used to identify ____________ of a ________ or _____________

How should the manager decide what actions to take Stage 2 3-4 (neutral)

Provide an appropriate range of supporting services Develop proactive service recovery to make amends when something goes wrong

Quantification; quality indicator; quality drivers; customer; internal quality

Quality is not always assured, and there are various elements of quality that need to be tracked. ___________ is important track the correct _______________, track the ____________, not the quality itself focus on the _________. ______________ matters, too

Type-1 Rivalry occurs

Racing to capture potential resources Winning first-time buyers Hiring newly qualified staff

effect on industry structure which neutralizes supplier power

Standardizing specifications for parts to make it easier to switch among suppliers

demand; revenue; capacity; staff; products

Resources drive performance by customers driving _______ and ________. _________, _________ and _______ enable us to build and satisfy that demand, and drive costs

intangibles; tangible system; negative; positives; influenced; influence; tangible system; client dissatisfaction; staff morale; tangible; manageable

Situations involving state-of-mind intangibles raise this common observation that ____________ can have a very large -scale impact on the _____________ and so should not be ignored. ____________ issues are different from a lack of____________. Intangibles are both ___________ by and____________ the ______________. The ______________ and _____________ are caused by change to the ___________ source. Intangibles are ___________

quickly; grow

So-called smart growers delivered an average return to shareholders nearly double the rate of slower, or faster growing, companies. The "growth corridor" allows managers to determine how ________ their companies can safely _________

cost-of-entry test

The cost of entry must not capitalize all the future profits.

consumers; stores; profit; high

The difference between good and poor strategies are achieving larger and more rapid uptake by ________ and __________, breaking into ________ after just twelve months, and driving ________ profits

input; people

The feedback cycle (loop), or process of control, requires only ___________ from specific _________.

attractiveness test

The industries chosen for diversification must be structurally attractive or capable of being made attractive.

not; financial return; resources

The investment required to change customers from satisfied to completely satisfied will ________ provide an attractive ___________ and therefore probably is not a wise use of ___________

Maximized when the WACC (weighted average cost of capital) is minimized

The value of the firm is:

Sustainable growth

They have a culture oriented to the long term They set and maintain realistic growth targets They pursue growth in sales and in profits simultaneously

purpose of the Relative Importance Weights

To bring the customer's voice to deliberations Have customers directly involved with product development

1. Is the activity done quickly 2. Is it done well 3. Is it done at a low cost?

To specify capabilities requires that we be clear what "being good at" something actually means. This is the recommended element to consider..?

Type-2 Rivalry occurs

Trying to steal resources away from competitors and prevent the reverse: hiring rivals' staff or keeping customers from switching to a competitor's product

at least 1?

Under ________ competitive advantage strategy, how many competitors must you beat on price in order to earn a profit?

How should the manager decide what actions to take Stage 3 4-5 (satisfied)

Understand and achieve results in customers' terms

-portfolio management -restructuring -transferring skills -sharing activities

What are the four Concepts of Corporate Strategy that are important for successful implementation..?

-Factor Conditions -Demand conditions -Related and supporting industries -Firm strategy, structure & rivalry

What are the four attributes of a nation that constitute their system of national advantage?

1. The basic elements of the product or service that customers expect all competitors to deliver. 2. Basic support services such as customer assistance or order tracking that make the product or service incrementally more effective and easier to use. 3. A recovery process for counteracting bad experiences 4. Extraordinary services that so excel in meeting customers' personal preferences, in appealing to their values, or in solving their particular problems that they make the product or service seem customized.

What are the four elements that affect customer satisfaction?

-join us -leave us -do more or less

What are the generic behaviors and their drivers?

-Win bigger customers -Lose smaller customers -Increase the size of existing customers

What are the three generic solutions to improving a customer base, as measured by average sales?

Premises of corporate strategy

What business the corporation should be and how the corporation office should manage the array of business units are the ______________

How a company should choose a corporate strategy and when to diversify

What important problem is this author trying to solve? "From competitive advantage to corporate strategy"

There are many dimensions to what a consumer means by "quality" and it is a major challenge to design products that satisfy all of these at once. Product quality will lag if management, marketing, manufacturing and designers aren't collaborating and working together. How to get all the departments or teams to collaborate together and benefit the design

What important problem is this author trying to solve? "House of Quality"

Can give clearer answers to why customers and sales change over time

What is the advantage to the manager in understanding the different types of rivalry..?

1. Set out how the performance of concern is changing over time period of interest. 2. Lay out how performance depends on tangible resources. 3. Specify how resources depend, over time, on their flow rates. 4. Identify how each resource flow rate depends at any time on existing resource levels (including the resource itself and any potential undeveloped quantity of that resource that may be available), management decisions, and external factors.

What is the four step process that produces your strategic architecture..?

History matters. The decisions made today will influence the future path of the organization.

What is the key message the author draws from Figure 1.7 (Starbucks - hypothetical profit history and alternative futures)..?

ROA

What is the recommended, best measure of overall firm performance?

-The attractiveness test -The cost-of-entry test -The better-off test.

What is(are) the essential test(s)?

Increased customer loyalty

What is(are) the single most important driver of long term financial performance?

Financial Performance and economic performance.

What performance do we want to improve?

Rise, rise, fall / fall, fall, rise

When interest rates ____, the firm's cost of capital will __________, and the value of the firm will __________

Rationing Mechanism

When price exists, price is a _______________

?

When setting financial targets for your annual business plan, which of the following groups of targets will improve your ROA..?

ROA / Beta

Which of the following is a risk-adjusted measure of firm performance

They have the ability to deliver stronger sustained growth in cash flows

Why does a firm with already-developed resources have a substantial competitive advantage?

The goal is to maximize efficiency between us and the lowest producing competitor

Why is Low Cost leadership the wrong goal?

Company with a patent will control the price, after patent is up no individual can control the price.

With Differentiation competitive advantage, the firm controls price..?

effect on industry structure which neutralizes the threat of substitutes

companies can offer better value through new features or wider product accessibility.

how value chain analysis helps

expose the transfer of skills amongst business units and the ability to share activities

value chain

is a system of interdependent activities that are connected by linkages, that can lead to a strong competitive advantage if developed correctly.

National competitiveness

is the capacity of its industry to innovate and upgrade

strategic position

is the creation of a unique and valuable position involving a different set of activities such as variety, needs, or access.

Value curve factors

show how sales have been developed over time, they each affect behavior differently ex.some are unable to affect retention since the customers have not experienced it