management midterm
A company is best described as a _____ to an existing company if customers value the existing company's productor service offering more when they are able to combine it with the other company's product or service.
complementor
maturity
consolidation of industry and excess capacity removed arlines industry or shipping industry
V - P
consumer surplus
Clean Rinse Shampoo has been the leader of hair-cleaning products for about 40 years. However, this company relied too long on its competency without refining or upgrading its product. As a result, other shampoo companies that began to offer organic shampoo gained a competitive advantage over Clean Rinse. This case is an example of
core rigidity
differentiation
create higher value by delivering products/services with unique features
cost leadership
create similar value by delivering product/services at a lower cost and lower price than competitors
dynamic capabilities are a firms ability to
create, deploy, modify, upgrade its resources over time
path dependence
current alternatives are limited by past decisions GM's problems competing with Toyota
bargaining power of buyers
customer concentration threat of backwards integration
In the context of SWOT analysis, which of the following best exemplies a rm's internal weakness?
decline in the rm's market share
early adopters
demand driver by the intuition and vision of the tech
V - C
economic value created
threat of new entrants
economies of scale network effects switching costs
The PESTEL factors are independent and are best considered separately.
false
economic: how is unemployment related to entrepreneurship?
famous companies started during recessionary periods
P - C
firms profit
technology enthusiasts
focused on the technology
growth
innovation gains market acceptance until it reaches a standard from product to process innovation (just in time) Blu-Ray DVD vs HD DVD
industry life cycle
introduction growth shakeout maturity decline
rivalry among existing competitors
competitive structure industry growth exit barriers
subscription based
users pay for access to a product during the payment term (Netflix)
Level 3: Contributing Team Member
uses high level of individual capability to work effecitvely with others in order to achieve team objectives
late majority
wait until they think they can master the technology
mission
what an org does it defines the means by which the vision is accomplished
vision
what an org wants to accomplish product vs consumer oriented
Which of the following situations will have greater effects from economies of scale than from learning effects?
when mass manufacturing pens
macro-environment analysis
PESTEL framework
core rigidity
a former core competency that turned into a liability as the environment changed
At a certain output level, the per-unit cost incurred by a firm to manufacture a product is $5. Other factors remaining constant, what will be the new per-unit cost if the cumulative output is doubled, and the firm is able to achieve an 80 percent learning curve?
$4
measuring competitive advantage
1. asses firm performance 2. benchmark to the industry average / competitors
elements of a good stratey
1. diagnosis - competitive challenges 2. guiding policy - approach to deal with competitive challenges 3. coherent actions - to implement the guiding policy
nelsons example
1. nelsons fleet was outnumbered 2. nelson decided to change the traditional way a naval combat takes 3. nelsons fleet sailed in two rows, perpendicular to spanish fleeet 4. nelson created isolated combats counting on the expertise of his captians
Osion Electronics Inc. incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario?
450
industry analysis
5 forces model
The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle. Which of the following statements is most likely true of StoreAll Inc. in this scenario?
A. It has a competitive advantage in the industry.
If SA Pharmaceuticals obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies?
Comparing the return to the return on invested capital obtained by other rms in the same industry
compliments
DVRS
innovation
IKEA - stylish furniture in a flat pack delivery
If Finolo and Ethver, companies that manufacture televisions, develop the same customer knowledge base and create products that provide the same customer appeal as Invoro, a market leader in consumer electronics, then
Invoro will have a resource that is valuable but no longer rare.
Level 3: Competent Manager
Is efficient and effective in organizing resources to accomplish stated goals and objectives. Does things right.
Level 4: Effective Leader
Presents compelling vision and mission to guide groups toward superior performance. Does the right things.
How are the two approaches, strategic planning and scenario planning, different from the strategy-as-planned emergence approach?
Relative to strategic planning andscenario planning, strategy as a planned emergence model is a less formal and less stylized approach to the development of strategy
Which of the following stages of the strategic management process involves an evaluation of a rm's external and internal environments?
Strategy analysis
Which of the following strategies best illustrates a functional strategy?
The production manager at the apparel division of Wilder Style Co. has decided that the department will hire contract workers for three months to meet the temporary demand.
Which of the following statements is not true about the ve forces in Porter's competitive analysis model?
The stronger the ve forces in an industry, the greater the industry's prot potential.
economic value creation equation components
V = total perceived consumer benefits C = firms costs P = price
willingness to pay
above price profit and cost, what consumers are willing to pay extra
dimensions of performance
accounting, shareholder value, economic value
Apples dynamic capabilities
allowed it to redefine the markets for mobile devices and computing, in particular in music, smartphones, and media content and makes the competitiors rethink
learning curve effect
as the cumulative output increase, cost per unit decreases
freemium = free + premium
basic features free of charge but user pay for premium services
strategic leadership
behaviors and styles of top managers that influence others
how to sustain a competitive advantage
better expectations of FV of a resource Path dependence Casual ambiguity social complexity
closed innovation
bottleneck looking
Level 5: Executive
builds enduring greatness through a combination of willpower and humility
resource heterogeneity
bundles of resources, capabilities, and competencies differ across firms
better expectations of FV of a resource
buy at low cost nike signing young and promising athletes record labels finding cheap talent
quality
can increase perceived value and lower cost (V - C)
introduction
capital intensive and small growth, emphasis on product features iPhone in 2008
experience curve effect
captures both learning effects and process improvements
casual ambiguity
cause of sucess or failure is not apparent
blue ocean
combination of creating higher value but getting lower costs
Trung has been an employee with PureEnergy Inc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Trung has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Trung has reached so far?
level 4
Five years ago, Palomino Airline was able to get a strong foothold in the airline industry by hiring a few pilots and crew and renting two airplanes, which ew routes between Denver, Omaha, Pierre, Cheyenne, and Helena. Which of the following summarizes the above factors that enabled Palomino to get started?
low entry barriers
Level 1: Highly Capable Individual
makes productive contributions through motivation, talent, knowledge, and skills
scenario planning
managers envision different what-if scenarios to anticipate plausible futures
Corner Market Inc. is a supermarket chain. Due to strong competition from other stores in the industry, Corner Market has aggressively used branding, pricing, and superior customer service to uniquely position itself in the market. As a result, the supermarket chain has been able to differentiate itself from its competitors and sell its products at higher prices. Which of the following industry competitive structures does this scenario best illustrate?
monopolistic competition
product innovations
new or recombine knowledge embodied in new products electric vehicle, smartphones
process innovations
news ways to produce existing products or deliver existing services made possible through advances like the internet, lean manufacturing, six sigma
the oil shock in the 1970s created
orgs moving from long term planning to a more flexible approach
triple bottom line
people profit planet
how is the effect of economies of scale different from the effect of the learning curve
pizza chain
business model
plan that explains how the firm intends to make money and how to conduct business with buyers suppliers and partners
economies of scope
producing two products together is cheaper than producing them independently
customer service
product replacement, guaranteed satisfaction
economies of scale
production becomes more efficient as the number of goods being produced increases
strategic planning
rational top down process to program activities
decline
remaining excess capacity leads to a stronger competitive intensity changes in external environment can lead to this stage - exit, harvest, maintain, consolidate
shakeout
replacement or repeat purchases, competitive intensity increases winners are usually low cost leaders
two main assumptions in a resource based view
resource heterogeneity resource immobility
elements to be protected to lead to sustained competitive advantage
resources coure competencies capabilities
resource immobility
resources tend to be sticky and dont move easily from firm to firm
competitor analysis
strategic group mapping
strategy as planned emergence
strategic initiatives are activities that firms pursue to explore
A rm's _____ relates to its ability to create value for customers (V) while containing the cost to do so (C).
strategic position
early majority
strong sense of practicality - weighing benefits and costs
amazon is a combination of
subscription and pay as you go
strategy is about creating
superior value while containing the cost to create it
bargaining power of suppliers
supplier concentration switching costs differentiated products
business level strategy
the goal directed actions managers take in their quest for competitive advantage when competing in a single product market who what why how
what other factors can influence the Strategic management process
the idea that foundation date has an impact on the future operation of the org
what is strategy
the set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors
The market for 3-D televisions is in the introduction stage of the industry life cycle. What does this imply?
there are only a few competitors in the 3-d television market
laggards
think about someone adopting a cell phone today - they enter in the mature stage or later
upper-echelon theory
top management team executives' experiences, values, and personalties greatly influence their interpretations of the situations the face and affect their choices
product features
tracking option in shipping industry
Both senior executives' judgment and behavior inuence the formation and implementation of strategy.
true
social complexity
two or more systems social or business systems interact creating many possibilities
ecological/legal
type of fuel required to sail in certain areas of the eu
pay as you go
user pays for only the services she consumes