J375 Midterm
In which value chain activity does the following example best fit? To service or repair your car, Lexus will pick it up from your house and give you a loaner car to use during the repairs/service
-After sales service
_______ is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of businesses
-Corporate Strategy
Where does the example fit? IKEA is an illustration of social complexity, path dependency and casual ambiguity making it extremely tough to copy their business model.
-Inimitable
Match the example with the SWOT element. If doing a SWOT analysis for Chick-Fil-A, where might you best put the possibility of increased international expansion?
-Opportunities
In which value chain activity does the following example best fit? Amazon's ability to deliver millions of orders in less than two days with its prime service would fit best into which of the activities within a value chain analysis?
-Outbound logistics
A major distinguishing characteristic of VCA that helps uncover its theoretical foundation is _________ that firms can follow to optimize the activities in their value chain
-Porter's formulation of generic strategies
Where does this example fit? Nike has been able to come consistently capture and sponsor the best basketball players in the world...the scarcity of these superstar athletes allows Nike to develop a competitive advantage
-Rare
threats
-SEGMENTATION ANALYSIS -COMPETITOR ANALYSIS -unfavorable trends, forces and changes in the external environment that have the potential to erode a firm's ability to compete -possible events or forces outside of your control -environmental threats -market demand -obstacles
opportunities
-STEEP -5 forces analysis -any favorable current or perspective situation in the external environment -a trend, force, or change in the external environment that may place the firm in a more favorable position -trends, forces, events and ideas -market developments -business and product development
What are common criticisms of SWOT?
-SWOT is sometimes criticized for being overly simple and hence masking complexity -Interpretation of information generated by a SWOT is likely to vary between different managers and practitioners -SWOT analysis does not really identify key actions to be taken
Match the example with the SWOT element. If doing a SWOT for Uber Eats, where might you best put the intense competition between Postmates, Doordash, and Grubhub?
-Threats
strengths
-VRIO analysis -factors that make a firm more competitive than its rivals -areas in which a firm has a superior resources or capabilities -capabilities that enable you to perform well -advantages: financial, accreditions qualifications -competitive -capabilities -resources, assets, people -brand value -marketing reach, distribution
weaknesses
-Value Chain Analysis -limitations, faults or defects within a firm that prevent it from achieving its strategic objectives -they cause a firm to under perform in serving customers -characteristics that prohibit you from performing well: gaps in capabilities, weak brand name -financials -vulnerabilities -reliability of product, date -supply chain robustness -management cover/quality -people
Match the example with the SWOT element. If doing a SWOT analysis for Netflix, where might you best out their over reliance on Amazon Web Services for hosting capabilities?
-Weaknesses
Which of the following academics were instrumental in the development of the Resource-Based View (RBV)?
-Wernerfelt, Barney & Rumelt
strategy
-a set of goal directed actions a firm takes to gain and sustain superior performance relative to competitors
deliver
-aka execution -devising and implementing a coherent set of actions to deliver on key decisions -the most elegant of strategic recommendations, left unimplemented provides little value to the organization -focuses on providing tangible, positive, net outcomes that help realize the business case associated with your strategic recommendation
corporate levels of strategy
-an overall direction towards management of various management of various units -growth, stability, retrenchment, diversification, integration
AFIRM framework
-analysis -formulation -implementation -review -modify
emergent strategy
-any unplanned strategic initiative -bubbles up from the bottom of the organization -can influence and shape a firm's overall strategy
Spotify holds strong to the belief that it competes in a winner takes all market and pursues a freemium business model as a result of this.
-assumptions
At which level of strategy are Tissot, SWatch, Breguet, Omega, Longines (they are all owned by the Swatch Group, Inc.)?
-business
________ is about developing and sustaining a competitive advantage for a business delivering an identifiable set of products and/or services. It is relevant for a single business in a larger corporation, or for a firm with a single business providing related offerings
-business strategy
business levels of strategy
-business unit or product level -emphasis on improvement of competitive position
Which of the following is not a typical resource classification?
-casual resources
When making a strategic recommendation, the manager/strategist should focus on which of the following?
-clarity, conciseness precision, persuasion
realized strategy
-combination of intended and emergent strategy
MAXI MAXI strength
-combine strengths and opportunities to identify how a firm might leverage strengths to seize opportunities or utilize opportunities to reinforce strengths -offensive, most common
MAXI MINI strategy
-combine strengths and threats to identify how a firm defends against a combination of weaknesses and threats -offensive, defensive -utilizing core competency to offset regulatory changes
MINI MINI strategy
-combine weaknesses and threats to identify how a firm defends against a combination of weaknesses and threats defensive
internal 3Ds
-competencies -resources -internal processes -firm specific weaknesses -outcome: distill the core issue into a statement or question
business strategy
-competition in the market -concerned with: the selection of businesses in which the company should compete, the development and coordination of that portfolio of businesses -WHO decides: C-level executives -WHEN: cyclical (annual or quarterly) -HOW: top-down from mission and values -WHAT: strategic plan
Audi competes using a differentiation strategy in the auto industry- which level does Audi compete on?
-competitive
Facebook's decision to buys Whatsapp, Instagram and Oculus is taken at what level?
-corporate
At which level is Microsoft Corporation, which operates various SBUs including intelligent cloud, Productivity & Business Processes, and More Personal Computing and whose CEO is Satya Nadella?
-corporate strategy
The C-Level executives of a diversified firm predominantly deal with what strategic level
-corporate strategy
What does the 'I' signify in the VRIO analysis?
-costly to imitate (inmitable)
risks and limitations of VRIO
-creates an inward looking perspective of strategy -creates a backward looking or static perspective of strategy -overlooks firms weaknesses and external and environmental threats
'A strategy planning meeting develops four proposed solutions, of which they prioritize one which they will implement in the next quarter' would fit best into which of the 3 D's?
-decide
The _________ element entails using a structured analytical approach to make reasoned, insightful, and logical choices about what will be done to overcome the key challenge or to seize on the opportunity
-decide
Value Chain Analysis (VCA) aids the strategist in mapping and understanding a firm's (potential) sources of competitive advantage by:
-decomposing the firm into strategically important activities
Which of the following would be typically the first step in carrying out a value chain analysis?
-define the focal company's boundaries and define its strategic business units. In doing this, it is important to do so consistently with unit operations, which may or may not overlap with organizational charts
product centered
-defines a business in terms of a good or service provided -less flexible -is not needs based -can lead to a myopic view -what happens when the demand changes?
customer centered
-defines a business in terms of providing solutions to meet customer needs
The ______ element entails designing solutions to integrate a policy or choice into a business and then taking coherent action to implement that solution
-deliver
'Many middle-level managers are tasked with specific roles to execute a planned strategic initiative' would fit best into which of the 3 D's?
-delivery
sociocultural
-demographics -societal values -lifestyle preferences
mission statement
-describe what an organization does -the products and service it provides -the markets in which it competes -strategic commitments (plans)
parts of a delivery process
-design the recommended solution -gain buy-in for your recommendation -plan the implementation -monitor the execution
The question: "What's going on inside an organization that may be impacting firm competitiveness or maybe a source of competitiveness in the future?" is typically asked in which of the three D's?
-diagnose
A CEO identifies that they have core competence in supply chain and logistics would fit best into which of the 3 D's?
-diagnosis
Internal strategy group during a workshop specifies the increased threat of e-commerce would fit best into which of the 3 D's
-diagnosis
technological
-discoveries -product potential -communication tech -alternative means
Which of the following is not one of the three D's i.e. the three elements that are central to the strategic management process?
-dodge
TOWS Matrix
-drives strategy from the analysis phase -allows the manager to determine which strategic alternative they should pursue -create alternative pathways forward -match external opportunities and threats with internal strengths and weaknesses
positive impact
-employees tend to feel part of something bigger than themselves -help employees find meaning in their work -allow internal stakeholder to help define the vision -motivate employees to aim for a target -improved internal and external alignment leads to competitive advantage
Political/legal
-employment law -taxation -industry/trade regulations -copyright/IP Law -Monopoly & Antitrust law
Which of the following is not a construct in a competitor analysis?
-environment
value chain analysis
-essentially concerned with identifying sources of competitive advantage -strategists should identify and pay close attention to those activities that are actual (or potential) source of such advantages -aids in understanding a firm's (potential) sources of competitive advantage -helps to understand and evaluate which activities contribute most substantially to a firm's competitive advantage and which do not -products/services gain value as they pass through the vertical stream of production within a firm -competitive advantage can be achieved both by individual activities and through joint optimization of interdepedent activities -joint optimization of interdependencies is hard to develop and sustain and even harder for other to copy
Five forces analysis
-evaluate and understand on industry and its broadset of participants -suppliers, customers, competitors -assess major factors impacting on industry's profit potential -used at an industry level in the external environment
when to use SWOT
-explore possibilities for new efforts or solutions to problems -make decisions about the best path for your initiative -identifying opportunities in relation to threats -determining where change is feasible -to reveal priorities for organizational need -adjusting plans already in process
strategic groups
-firms in the same strategic group follow a similar strategy -differences identify business level strategies -firms which fall into the same strategic group: they are direct competitors -intragroup rivalry exceeds intergroup rivalry -rivalry among firms within a strategic group is more intense than the rivalry strategic groups -firms in the same strategic group follow a similar strategy -strategic group differences identify business level strategies -firms in the same strategic group
risks and limitations
-firms may become competitor obsessed -firms can acquire a "copycat" approach -firms may become blind to innovations not made by the firm or its competitors
mobility barriers
-firms want to follow the money -restricts movement between groups; industry-specific factors that separate one group from another
The decision by HR managers to hire more international analysts is taken at which level of strategy?
-functional
managerial strategy
-functions of the organization -strategic decision making is concerned with identifying and dealing with a diverse range of strategic challenges and opportunities confronting a business -WHO: managers -WHEN: continuous -HOW: bottom-up -WHAT: value proportion
parts to decision process
-generate solution alternatives -perform an initial screen -validate your hypotheses -confirm your choice
threat of new entrants
-high barriers to entry=low threat of new entrants -low barriers to entry=high threat of new entrants -low economies of scale -low product differentiation and/or brand equity -low capital requirements -low switching costs for buyers -easy access to distribution channels -little or no government policy restricting industry -easy access to necessary inputs -limited learning curve benefits -limited expected retialation -limited patent and trademark protection -greater threat of new entrants--> greater likelihood of new entrants--> lower industry profits
bargaining power of customers
-high buyer volumes -lower buyer switching costs -increased info available to buyers -high seller dependence on buyers -high threat of backward integration by buyers -low levels of product differentiation -substitute products available to buyers
jockeying among current contestants
-high exit barriers -low concentration -high fixed costs to operate -low industry growth rate -over capacity in the industry -low product differences -low switching costs for buyers
bargaining power of suppleirs
-high supplier concentrations -high differentiation of inputs -high switching costs to different suppliers -lack of substitute inputs -threat of forward integration -greater negotiating power of suppliers--> greater influence to negotiate lower price--> lower industry profits
risks and limitations of steep analysis
-highly dependent on a manager's interpretation -no way to access which issues will have the most significant impact -different managers may disagree on how to interpret factors -requires a long term orientation, yet many managers are accessed on short-term performance
In which value chain activity does the following example best fit? Many people wish to work in Google due to the unique culture they have developed. When carrying out a value chain analysis for Google, where would this example fit?
-human resource management
Which of the following is the first step in a competitor analysis?
-identify current and future competitors
mapping strategic groups
-identify important strategic dimensions -for the horizontal and vertical axes; select two key dimensions which expose pivotal differences among the competitors -graph the firms in their strategic groups -market share by firm should be shown by the size of the bubble which it is represented
diagnose
-identifying and describing a challenge or opportunity a business -assess and connect external issues with internal issues to understand the root cause
economic
-interest rates -inflation -consumer confidence -growth -unemployment -seasonality
Which of the following is not a limitation of a competitor analysis?
-it contains sensitive internal information that may be used against the focal firm by its closest rivals
What is a common criticism of VRIO?
-it creates an inwardly looking perspective of strategy
frailties and failing
-it is calculating style of management -at the expense of committing -too much focus on the destination and less focus on the individuals -reduces power and influence of managers -leads to less commitment -the fallacy that prediction is possible -people believe the plans and conclusions to be fact -loss of innovation and inspiration -planning does not create strategies -but it can help operationalize them
risks and limitations of value chain analysis
-it is hard to accurately determine the value of each (sub) activity -the value generated by joint optimization and coordination efficiencies are hard to quantify -it may be seen to "place the customer last"
Which of the following is a common criticism of the value chain analysis?
-it is hard to accurately determine the value of each (sub)activity that leads to the sale of a final product or service -the value generated by joint optimization and coordination efficiencies are hard to quantify -it may be seen as placing the customer last
What insight or value does a VRIO create?
-it provides a means for managers and practitioners to focus on a firm's most valuable elements when developing a strategy
What is the purpose of SWOT?
-it provides a means to account for internal and external factors plus positive and negative factors confronting a firm, thereby providing a balanced perspective of strategic issues
substitutes
-limit profits by capping pricing -alternative price-performance trade off -buyer switching cost is low -changes in other industries -must create as much distance/differentiation as possible
ethical values
-look for consistency and alignment
limitations to top-down approach
-low adaptability to change -information flow can be restricted -poor implementation -lack of connection to customer
threat of substitute products or services
-low switching costs -high buyer inclination to substitute -low price performance tradeoffs -easy ability to substitute -greater threat of substitute products--> greater likelihood that buyers will switch their preferences--> lower industry profits
external 3Ds
-macro trends -market conditions -technology changes -industry dynamics
decide
-making a decision about what will be done to deal with and overcome the central challenge or capture the key opportunity -many think of it as the head of strategy
PESTEL Framework
-managers mitigate threats and exploit opportunities by analyzing the external environmental forces -framework to scan, monitor, and evaluate important external factors/trends -factors are interdependent -all these external environment forces can affect a firm's ability to gain and sustain competitive advantage -they provide a series of opportunities and threats
SWOT in practice
-many managers use SWOT as a starting point for analysis -it can be useful to start discussions and highlight the need to perform detailed analyses -for lower level employees it is useful to help them understand a wider perspective than their main job focus
functional levels of strategy
-marketing, research, etc.
risks and limitations of five forces analysis
-may not adequately account for social, political and technological factors impacting a business -underestimates capabilities, resources and core competencies of a firm -overlooks synergies and interdependencies among a firm's business units -changing an industry structure to benefit a firm may benefit other firms significantly
In a letter to shareholders, Amazon outlines the four goals that will guide the company: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking
-objectives
Which of the following is NOT a corporate level issue?
-operational strategies
Zappos logistics manager decides to improve efficiency in its supply chain infrastructure- which level is this decision taken at?
-operational strategy
In which value chain activity does the following example best fit? Toyota is well-renowned for its 6 sigma manufacturing process. When doing a value chain analysis for Toyota, where would this 6 sigma example predominantly fit?
-operations
Where does the example fit? Microsoft and Windows had an organizational structure and coordinating mechanisms that allowed them to capture most of the market share and profit pools at the start of the PC era.
-organized
Risks and limitations of SWOT
-overly simple -interpretation of information generated analysis is likely to vary -only provides a snapshot of the situation -does not really identify key actions to take
PESTEL/PESTELE
-political, economic, sociocultural, technological, ecological, legal
PEST/STEP
-political/legal, economic, sociocultural, technological
In a Value Chain Analysis, a firm's after-sales service will be referred to as its __________
-primary activity
purpose of competitor analysis
-provider a complete picture of the competitive landscape confronting a firm
parts of diagnostic process
-recognize potential challenges and opportunities -analyze the external environment -analyze the internal context -identify root causes and key insights
If Pepsi lower's the price on its 2-liter bottle of cola, chances are Coke will do the same almost instantaneously
-response
proactive competitor profiling
-reveals competitors weaknesses -reveals likely competitor responses -anticipates competitors future moves
A potential challenge or opportunity may come to the attention of a manager through a variety of different channels- which of the following is not a typical channel?
-rhetoric channel
STEEP analysis
-social, technological, economic, ecological, political/legal -account for trends, forces, and changes beyond the boundaries of the firm
Porter's Five Forces
-strategic groups, mapping strategic groups, mobility barriers, substitutes -firms are able to create and exercise market power -to really understand opportunities for strategy one must analyze the underlying economics of a firm and industry -industries are formed and modified by a variety of forces -large incumbents are there for a reason
Lululemon appeals to a narrow demographic on the basis of differentiation
-strategy
Southwest Airlines is renowned for pursuing an integrated cost leadership/differentiation strategy i.e. simultaneously lowering costs while increasing uniqueness
-strategy
Match the example with the SWOT element. If doing a SWOT for Disney, where might you best put their current vertical integration strategy (where they own the animation studios, film distribution, theme parks and cruise ships, and their own video on demand service)?
-strengths
What element of SWOT could filter in insights from a VRIO analysis?
-strengths
________ are factors that make a firm more competitive than its rivals. Areas in which a firm has superior resources or capabilities compared to competition. __________ tend to focus on internal factors that are currently under firm's control.
-strengths
SWOT
-strengths, weaknesses, opportunities, threats -accounts for internal and external factors plus positive and negative factors providing a balanced perspective of strategic -synthesizes internal analysis of the company's strengths and weaknesses (S and W) with those from an analysis of external opportunities and threats (O and T) -gain a balanced perspective of strategic issues -one of the most well known and prevalent strategies -criticized for being "overly simplistic" but widely used as an initial tool for starting the strategy process
corporate strategy
-structure of the corporation
ecological
-sustainable preferences -regulation incentives -sustainable resources
In which value chain activity does the following example best fit? 3M is renowned for its ability to innovate and its R&D capabilities. When carrying out a value chain analysis for 3M, where would this example fit?
-technological development/R&D
intended strategy
-the outcome of a rational and structured top-down plan
In a SWOT analysis what does the 'T' signify?
-threat
What is the purpose of competitor analysis?
-to provide managers and practitioners with a complete picture of the competitive landscape confronting a firm
What is the purpose of a VRIO analysis?
-to systematically identify resources and capabilities that may serve as a key source of competitive advantage
Where does the example fit? Honda's ability to design&build engines allows them to increase the perceived value of its products.
-valuable
VRIO analysis
-valuable, rare, inimitable, organized -systemiatically identify resources and capabilities that may serve as a key source of competitive advantage
vision statements
-what an organization wants to accomplish
insight created from SWOT
1. Organizes large amounts of disparate data about a firm 2. Simple and understandable framework that connects internal and external data 3. prioritizes issues that have the greatest impact
insight or value created from competitor analysis
1. a clear picture of the competitive landscape 2. identify under/over served areas in the market 3. market opportunities and threats become more evident 4. create a competitor- conscious culture within an organization
major insight created from five forces analysis
1. business competition is the struggle of capturing the value that an industry creates 2. firms are in a competition for profits, not just with rivals but also with other industry participants 3. the collective strength of the 5 forces determines the average profitability of the industry 4. five forces analysis can help anticipate and exploit structural change
process of carrying out a value chain analysis
1. define the firm's boundaries and business units 2. analyze the wider vertical process involved 3. identify the company's key activities 4. conduct a cost analysis 5. conduct an analysis of the activities relative value 6. analyze the firms relative capability 7. analyze key interdependecies 8. evaluate the firm's value chain 9. identify opportunities for the optimization
process of five forces analysis
1. define the relevant industry by both its product scope and geographic scope 2. identify the players constituting each of the 5 forces 3. assess the underlying drivers of each force 4. step back and assess the overall industry structure 5. analyze recent and likely future changes for each force 6. how can a firm position itself in relation to the 5 forces
criteria of VRIO
1. firms are a bundle of resources 2. firms may be heterogenous 3. resources are sticky 4. certain resources are sticky 5. competitive position is a cumulative of all these
insight created from VRIO
1. focus on a firm's valuable elements 2. uncover and exploit true sources of competitive advantage to develop distinctiveness in a market place 3. VRIO is an integrative framework that connects ideas together
process of carrying out competitor analysis
1. identify current and future competitors 2. gather intelligence on competitors 3. consolidate, analyze, and organize information 4. summarize insights from competitor analyze 5. derive strategic implications for your firm 6. continue to monitor competitors over time
process of VRIO
1. identify valuable resources or capabilities 2. assess whether they are rare 3. assess whether they are costly to imitate 4. assess whether the firm is organized to exploit 5. use the resource as a focal point for developing a strategy
Process of SWOT
1. list and evaluate SWOT elements 2. analyze and rank factors within each category 3. combine categories to identify actions that link internal and external factors 4. Use them to inform overall strategic decisions
insight created from value chain analysis
1. provides insight on the ways a company's activities, independently and jointly, relate to overall profit and competitive advantages 2. provides an important analytical input into decisions regarding activity structuring, resource allocation and the potential in- or outsourcing of activities 3. explores the company's competitive position relative to key customers and suppliers