Ch4 mgmt 310
Strategy Formulation
The process of identifying how a firm can best align its resources to carve out a defensible position in the marketplace
mission statement
A statement that defines a firm's reason for existence
Vision
A concept or picture of what a firm wants to achieve and how it plans to accomplish that
Licensing
A contractual arrangement whereby the licensor (selling firm) allows its technology, patents, trademarks, designs, processes, know-how, intellectual property, or other proprietary advantages to be used for a fee by the licensee (buying firm)
wholly owned subsidiary
A fully operational, independent entity that a firm sets up in a foreign country to conduct business in that market
Return on equity
A measure of the rate of return on the ownership interest (shareholder's equity) of the common stock owners
Alliance
A structure where partners come together by contract to engage jointly in activities in a market
Franchising
Common arrangements in many retail businesses where a firm contracts with individual owners to operate its retail units. This arrangement typically involves a corporation sharing management and marketing techniques with the owner in exchange for a fee and some percentage of the unit's revenues.
Ryan is the manager of Home Repairs Inc., a company that provides a wide range of repair and maintenance services. He claims that Home Repairs is the only company that sends over technicians to a client's place for repair work within an hour of the client's call to the company. His company offers its services at very affordable prices. Home Repairs distinguishes itself from other companies by providing discounts for people who sign up for memberships. This scenario describes the company's ________ .
Core competencies
Cisco managers sat down recently to review the portfolio of their company. They looked at all of the businesses the company had acquired in the last year and determined how much money each acquisition was making for Cisco. They then decided which companies to keep and which ones to spin off.
Corporate level strategy
A company's managers ask, "Does it make sense for our vacuum-cleaner company to buy a company that manufactures space heaters?"
Corporate-level strategy
Which of the following statements is true of a business-level strategy?
It determines how a company will compete in a given business and succeed at it
what is phase 3 of globalization?
Joint ventures & alliances
Operational effectiveness
Performing certain activities that enable a firm to operate more effectively than its competitors do
Objectives
Series of quantifiable milestones or benchmarks by which a firm can assess its progress
what is phase 4 of globalization?
Wholly-owned susdiriaries
When setting a _____, the company is primarily trying to decide how it will compete against its competitors
business-level strategy
Honda's_____ is developing precision engines and power trains. It's products are leaders in reliability and technological
competitive advantage
When Bhatavia Jedda made shirts in her native country of Saudi Arabia and sold them in Jordan, she was involved in the process of _____her work
exporting
a__________strategy attempts to provide a standardized product to all markets without taking into consideration the local tastes and responsiveness of the regions in which the product is being sold
global
Manager's role (external environment)
industry analysis, customer analysis, supplier analysis, competitor analysis
A contractual arrangement whereby a firm to use its technology without permitting the use of a common brand name is known as:
licensing
According to the economist Milton Friedman, the goal of a business is to:
make profits
An effective _____ will build motivation among employees, provide employees with direction and inspiration, and assist in making strategic trade-offs
mission statement
The Art of War- Chinese military treatise written by SUN Tzu
more impostant to out-think than to outmaneruver the opponent through physical force
the____ of the bose corporation is a function of the high technology of its products, along with the ways in which the company delivers products to its customers
strategic position
Multinational strategies
strategies in which the parent company organizes local subsidiaries and gives them autonomy to develop products tailored to local taste
Transnational strategy
strategies that balance a firm's international activities among efficiency, local responsiveness, and organizational learning
Conglomeration
the act of growing through unrelated diversification, essentially by acquiring companies in different industries
mission
the activities a firm performs for its customers
Global Strategies
strategies that focus on developing overall scale economies and global efficiency instead of catering to local taste
business-level strategy
the determination of how a company will compete in a given business and position itself among its competitors
Which of the following is true of the emergent aspects of strategy development?
the emergent aspects of strategy development signify flexibility in an organization
Milton Friedman
the only goal of a business is to focus only on making profits so that it creates the most value for its shareholders or owner of the business
Corporate-level strategy
the way a company seeks to create value through the configuration and coordination of multimarket activities
Which of the following is an advantage of exporting strategies?
they facilitate a firm to expand to global markets in an inexpensive way
International strategy
Strategies that combine elements of multinational and global strategies by using foreign subsidiaries to produce and distribute products
The Roman Empire
Tactical implementation of military strategies that were contingent on internal and external assessment
Strategic position
A place in an industry that a firm occupies by way of the products or services it offers and the methods it chooses to deliver them. Creating Fit, Managing trade-offs, choosing a set of activities
Manager's role (Internal Role)
Asses goals, Asses internal resourcers, Asses Culture, Assess employee capabilities
At Apple, managers ask, "Should our next iPad product be innovative and new, so we can charge a higher price for it, or should we consider going down one more size, so people with less money can purchase an iPad?
Business-Level Strategy
Managers for IBM's SPSS statistics software meet to determine how they will market the product in the upcoming year. Their decision is to show potential clients how effective SPSS is at analyzing extremely large data sets, and how the "Direct Marketing" part of the program helps identify which customers will respond to advertisements.
Business-Level Strategy
Rules of engagement
Generate better information than your rivals, analyse that information to make informed choices
Desiree has a ____: to become a television ews anchorwoman before she turned 35
Goal
Pro-Go is a company that manufactures travel gear. It specializes in selling products such as backpacks, tents, and sleeping bags. Pro-Go recently finalized a contract with a supplier who agreed to supply product material at very low prices. This brought down production costs and enabled Pro-Go to sell its equipment at reasonable prices. As a result, profits of Pro-Go rose by 20%. In this case, the procurement of material at low prices:
Increased the company's operational effectiveness
Last week, a manager came into work early and stayed very late. She noticed that some employees came to work early and left early, some came to work late and left late, and some came to work late and left early. The manager was gathering information about her company's _____ environment
Internal
what is phase 2 of globalization?
Licensing & franchising
Strategy
Pursuing a set of unique activities that provide value to customers; making trade-offs about which businesses to pursue, what products to produce, and which customers to serve; and aligning resources to achieve organizational objectives
Manager's Role (Strategy Formulation -> Strategy Implementation)
Select industries in which to compete, Define core competencies and unique activities, make trade-offs, create fit among activities.
Exporting
Shipping a firm's products from its domestic home base to global markets
When managers create a firm's strategy, what must they consider?
The scale and scope of operations, the company's organizational structure, the position their firm will take in the marketplace, choose which product and services their company will offer to clients, determing if it has been successful
The primary purpose of analyzing the internal and external environments of a company while creating strategic plans is to:
Understand how the company can satisfy the needs of its major stakeholders
The mission of a firm provides:
a description of the activities that a firm performs for its customers
Competitive advantage
a firm achieves a competitive advantage when it creates more economic value than competitors by enganing in a strategy that is difficult or impossible for others to duplicate
________ like "to give people the power to share and make the world more open and connected" is a good place to look if you want to know why a company is in business
a mission statement
Core Competencies
a network of unique activities that strategically fit together and are difficult to replicate
Joint Venture
a structure where two firms come together to form a new company in a market
In a(n)____, partners come together by contract and engage jointly in activities that benefit each other without creating a new entity
alliance
When a company uses foreign subsidiaries to produce and distribute its products overseas, but also performs research and development in the company's home offices, it is most likely to be using____ strategy
an international
Goal
an organizatinally desired result, product or end state
What is phase 1 of globalization?
exporting