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

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

Alliance

A structure where partners come together by contract to engage jointly in activities in a market

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

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

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 1 of globalization?

exporting

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

what is phase 2 of globalization?

Licensing & franchising

Operational effectiveness

Performing certain activities that enable a firm to operate more effectively than its competitors do

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.

Objectives

Series of quantifiable milestones or benchmarks by which a firm can assess its progress

Exporting

Shipping a firm's products from its domestic home base to global markets

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

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

what is phase 4 of globalization?

Wholly-owned susdiriaries

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

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

Global Strategies

strategies that focus on developing overall scale economies and global efficiency instead of catering to local taste

Conglomeration

the act of growing through unrelated diversification, essentially by acquiring companies in different industries

mission

the activities a firm performs for its customers

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