MGT495 - Exam #1
List the labels for "Porter's Value Creation Frontier" from TOP left to BOTTOM right.
"More Value" (I) Innovativeness (QAC) Quality At Craftsmanship (CR) Customer Responsiveness (QIW) Quality It Works (E/P) Efficiency/Price "Cost"
What heads (far right) the "Cruise Ship" Example?
"VALUE"
Quality At Craftsmanship (QAC)
-Brand - "Patagonia" -Luxury - "Plastic Car Handles" -Experienced - "Starbucks"
What are 2 Pricing Mechanisms?
-Fixed Menu Pricing: Predefined prices are based on static variables -Dynamic Pricing: Prices change based on market conditions
What are the 2 concepts to consider when looking at "Environment"?
-General Environment (Microenvironment) -Industry (Competitive Environment)
"Is Map"
-Shows issues and opportunities -An accurate representation of the process as it currently operates - no matter how ugly.
What are the 3 Laws of "Porters Value Creation Frontier"?
1. Increase in Cost, Value, Price 2. Assumption 3. FAIL
What does V.R.I.O. stand for?
1. Value: NO Competitive Advantage 2. Rare: Comparable Competitive Advantage 3. Imitate-ability: Temporary Competitive Advantage 4. Organized to Exploit:
Revenue Structure - Cost Structure = ?
=Profitability
Plan
A carefully crafted set of steps that a firm intends to follow in order to be successful
Position
A firm's place in the industry relative to its competitors
Differentiation
A new entrant would struggle to match the differentiation that years of advertising have created for various brands
Cost Structure (and the 2 types)
All costs incurred to operate a business model EX. Fixed Costs, Variable Costs -Cost Driven: Focus on minimizing costs whenever possible -Value Driven: Costs that remain the same despite the volume of goods or services produced.
Substitutes
Are offerings that differ from goods and services provided by the competitors in an industry but that fill similar needs to what the industry offers.
Economies of Scale
As the number of customers a firm serves increases, the cost of serving each customer tends to decrease
What does "C" stand for? (Business Model Canvas)
Channels
What does "CA" stand for?
Competitive Advantage
What does "CS" stand for? (Business Model Canvas)
Cost Structure (BOTTOM LEFT) OR Customer Segmentation (TOP RIGHT)
As you move up (to the top right) of "Porters Value Creation Frontier, what happens?
Creates MORE value
What does "CR" stand for? (Business Model Canvas)
Customer Relationships
What foes "CR" stand for?
Customer Responsiveness
What are the 9 Building Blocks (for a business model)?
Customer Segments Value Propositions Channels Customer Relationships Revenue Streams Key Resources Key Activities Key Partnerships Cost Structure
Values (definition)
Decision-making tools used by executives
Government Policy
Decisions made by governments can deter or encourage potential new entrants.
Business Model Canvas
Describes the rationale of how an organization creates, delivers, and captures value
Triple Bottom Line
Emphasizes the three P's: People (Social Concerns) Planet (Environmental Concerns) Profits (Economic Concerns)
What are managers supposed to gauge to determine an organization?
Financial Customer Internal Business Process Learning and Growth
What does "FG" stand for?
Finished Goods
Potential New Entrants
Firms that do not currently compete in the industry by increasing its competitiveness.
Competitors
Firms that produce similar products/services
Business Model Canvas (Right Canvas)
Focused on VALUE
Business Model Canvas (Left Canvas)
Focuses on EFFICIENCY
Customer Responsiveness (CR)
Give customer what they want, when they want it, how they want it. So much so that they pay more for it.
Channels (and the 5 Channel Phases)
How a company communicates with and reaches its Customer Segments to deliver a value proposition The 5 Channel Phases: Awareness Evaluation Purchases Delivery After Sales
Perspective
How executives interpret the competitive landscape around them
Expected Retaliation
If a firm succeeds in entering a market, existing companies might slash their prices in order to keep their market share intact.
What are the "Support" factors of the "Cruise Ship" Example? (4)
Infrastructure Supply Chain Management Information Technologies Human Resources
What does "I" stand for?
Innovation
Types of Strategy:
Intended Emergent Realized Non-realized
What consists of an Organizational Appraisal?
Issues - Cost Structure Opportunities -Profitability, Revenue, Revenue Growth Red Thread - Guides you through a process "Is Map" - How a company currently operates
What does "KA" stand for? (Business Model Canvas)
Key Activities
What does "KP" stand for? (Business Model Canvas)
Key Partnerships
What does "KR" stand for? (Business Model Canvas)
Key Resources
Quality It Works (QIC)
Knowing Customers Well
Switching Costs
One of the challenges facing the makers of alternative fuel vehicles. Few consumers are willing to live with the significant hassles and inconveniences that arise when purchasing an alternative fuel vehicle.
What are the 5 P's?
Plan Ploy Pattern Position Perspective
What does P.E.S.T.E.L. stand for? (PESTEL Analysis)
Political Economic Social Technological Environmental Legal
What does P.E.S.T.L.E.G. stand for?
Political Economic Social Technological Legal Environmental Global
Cost Advantage Independent of Size
Proprietary technology, access to raw materials, and desirable geographic location are all examples of cost advantages not directly associated with size (and economies of scale).
What does "QAC" stand for?
Quality At Craftsmanship
What does "QIW" stand for?
Quality It Works
What runs along the top of the Primary/Support section of the "Cruise Ship" example?
RM --------------FG Raw Materials Finished Goods
What does "RM" stand for?
Raw Materials
What are the "Primary" factors of the "Cruise Ship" Example? (4)
Research Production Sales and Marketing Before/After Sales Customer Service
What does "RS" stand for? (Business Model Canvas)
Revenue Structure
What does S.M.A.R.T. stand for?
Specific Measurable Aggressive Realistic Time-Bound
Forward Vertical Integration
Supplier power is also stronger to the extent that industry members rely heavily on suppliers to be profitable, industry members face high costs when changing suppliers, and suppliers' products are differentiated. Finally, suppliers possess power to the extent that they have the ability to become a new entrant to the industry if they wish.
What is the 5 Forces Analysis?
Suppliers New Entrants Substitutes Buyers Rivalry
What does "SCA" stand for?
Sustained Competitive Advantage
Access to Distribution Channels
The ability to get goods and services to customers can pose a significant challenge to would-be-newcomers.
Value Propositions
The bundle of products/services that create value for a specific Customer Segment EX. Newness Performance Customization
Revenue Streams
The cash a company generates from each customer segment EX. Asset Sale Usage Fee Subscription Fees
Pattern
The degree of consistency in a firm's strategic actions
Customer Segments
The different groups of people or organizations an enterprise aims to reach and serve EX. Mass Market Niche Market Segmented Market
Capital Requirements
The more expensive it is to enter a business, the less likely a new firm is to attempt to enter it.
Key Resources
The most important assets required to make a business model work EX. Physical Intellectual Human Financial
Key Activities
The most important things a company must do to make its business model work EX. Production Problem Solving Platform
Key Partnerships
The network of suppliers/partners that make the business model work EX. Joint Ventures Buyer-Supplier Cooperation
Entrepreneurial Orientation
The process, practices, and decision-making styles of organizations
Autonomy
The tendency to bring forth ideas and see them through completion
Customer Relationship
The types of relationships a company establishes with specific customer segments EX. Personal Assistance Self-Service Communities
Mobility Barriers
These make it difficult or illogical for a particular firm to change groups over time.
Proactiveness
To anticipate and act on future opportunities rather than rely solely on existing products/services
Competitive Aggressivenss
To intensely challenge rivals rather than trying to avoid competition
Innovativeness
To pursue novel ideas, creative process, and exparimentation
Risk Taking
To take bold actions rather than being cautious
Value (definition)
Utility beyond price paid Required to facilitate exchange
What does "VP" stand for? (Business Model Canvas)
Value Propositions
Ploy
a specific move designed to outwit or trick competitors
