MAN 4720 Exit Interview Questions
What are two types of Defensive Strategies?
(1) Signaling retaliation (2) Blocking avenues (an example of this would be locking in suppliers and distributors)
What are some guidelines for designing an affective reward system?
-Administer fairness -Result-oriented -Reward employees quickly -Reward them in a way that promotes shareholder value -Monetary and Nonmonetary rewards -Punish nonperformers
What are the functions of the Board of Directors?
-Approve financial reports -Appoint CEO -Determine executive compensation -Advise and coach the executive team
What is a parent company providing to another company under its corporate umbrella in unrelated diversification?
-Brand name being known -Experience from employees the parent company has -Financial assistance -Corporate parenting
WHAT are the five steps to a strategy?
-Developing a strategic vision and mission -Setting objectives -Forming a strategy -Executing the strategy -Making corrective adjustments
What are the three tests to a winning strategy?
-Fit test -Performance test -Competitive advantage test
What are the five generic strategies?
-Focused low cost -Focused differentiation -Broad low cost -Broad differentiation -Best cost strategy
What are the three tests to assess whether you should diversify? (Tests of Corporate Advantage)
-Industry Attractiveness Test -Cost of Entry Test -Better Off Test
What are the 6 steps to analyzing a diversified portfolio?
1) Analyze the attractiveness of the industries you are in 2) Look at the position of the companies that are in the industries 3) Look at the degree in which you achieve strategic fit 4) Look for resource fit 5) investment priority 6) Determining if their are companies you want to add, sell, or turn around to your existing portfolio
What is the justification for vertical integration?
1) Control issues 2) It's cheaper
What are the three tasks of leadership?
1) Management by Walking around 2) Making corrective adjustments 3) Demanding superior execution
What are three ways to enter new businesses?
1) Mergers and Acquisitions 2) Joint Venture 3) Internal startup
What are five SUPPORTING strategies?
1) Mergers and Acquisitions 2) Vertical Integration 3) Joint Ventures 4) Strategic Alliance 5) Blue-ocean strategy
What are the 10 areas of strategy execution?
1) Strategy-supporting structure. 2) Staffing 3) Developing organization competencies and capabilities. 4) Allocating ample resources 5) Policies and procedures 6) Best practices 7) Information and operating systems 8) Rewards and Incentives 9) Company culture 10) Leadership
What are Porter's Five Forces?
1. Buyer Power 2. Supplier Power 3. Substitutes 4. Threat of new entrants 5. Rivalry among existing competitors
What are the advantage and disadvantages of staffing with only internal people?
Advantages: Maintain company culture Disadvantages: Missing out on new ideas that come from outsiders
(2/5) The SECOND part to the Dupont formula is?
Asset turnover = Net Sales/Total Assets Target? = greater than 1
Which of the five generic strategies is the toughest and why?
Best cost strategy because you're trying to give the customer a product at a price they will pay while offering it at the lowest cost to you.
What is the difference between a business strategy and a business model?
Business model is made up from the customer value proposition and profit formula. Business strategy is the steps a company takes to sustain a competitive advantage.
What are three measures of Liquidity?
Cash Ratio = Cash/Current Liabilities Target? = 15-20% Quick Ratio = (Current Assets - Inventory)/Current Liabilities Target? = Greater than 1 Current Ratio = Current Assets/Current Liabilities Target? = 2:1
What is a justification for unrelated diversification?
Create shareholder value.
What are the two elements of a business model?
Customer Value Proposition Profit Formula
WHICH of the five steps to a strategy is the toughest?
Executing the strategy because it's more of an art than a science, there are many different ways to implement a strategy
Define Key Success Factors (KSF).
Factors that are necessary for success in an industry, but do not guarantee success.
What analytical tools feed into strategic issues?
Financial analysis Competitive strength assessment SWOT analysis Value Chain analysis Resource analysis
Where do strategic issues come from?
From within the industry.
Who designed the GE9 Cell Matrix?
GE
What's the difference between a high-performance and an adaptive culture?
High-Performance Culture - there's a strong sense of involvement on the part of company personnel and emphasis on individual initiative and effort. Adaptive culture - a willingness on the part of organization members to accept change and take on the challenge of introducing and executing new strategies. Both can lead to burnout.
The strategic group map tells you what?
How competitive they are.
Define strategic issues.
Issues that can cause a company to fail. They come from the external environment.
(4/5) The FOURTH part of the Dupont formula is?
Leverage = Total Assets/Net Worth Computation for Net worth = Assets - Liabilities Target? = 1.5x-2.5x
How do you do a Porter's Five Forces' analysis?
List the five forces and determine if they are strong, moderate, or weak. Then assess whether the industry is attractive or not.
How do you do a value chain analysis?
Look at your company versus your competitors' value chain activities and benchmark against their best practices to see if you can do it better or improve.
What is the GE9 Cell Matrix?
Looks at the market attractiveness and market dominance, looks similar to a strategic group map but it's your companies in each industry with the size of the circle representing the percentage of revenues to the parent company.
Define driving forces.
Major underlying cause of change in an industry.
What is a blue-ocean strategy?
New market that a company goes into, no major players in place yet.
Can a good business strategy compensate for a deficient business model?
No, if your business model is irrelevant then you don't need a strategy because you can't make money.
What is the difference between Offensive and Defensive Strategy?
Offensive Strategy = Gain market share in an industry Defensive Strategy = Maintain current market share, and keep others from taking market share.
What does PESTEL stand for?
Political Economic Sociocultural Technological Environmental Legal
What three things do investors consider when looking at the performance of a company?
Profitability Liquidity Growth
What is strategic fit?
Related diversification and how well value chain activities are shared across multiple businesses.
(3/5) The THIRD part to the Dupont formula is?
Return on Assets = Net Profits/Total Assets Target? = 6-8%
(5/5) The FIFTH part of the Dupont formula is?
Return on Equity = Net Profits/Net Worth Target? = 15-20% = very good 20-25% = excellent 25%+ = outstanding
(1/5) The FIRST part to the Dupont formula is?
Return on sales = Net Profit/Net Sales Target? = 6-8%
What is a competency?
Something a company does well
What is a distinctive competency?
Something a company does well better than their competitors
What is a core competency?
Something a company does well that supports their strategy
How do you do a competitive strength assessment?
Take the KSFs of the industry and assign them weights and assess the big players in the industry with your business.
How do you do a strategic group map?
Take the rivals of an industry and compare them in a chart with the X and Y axis being uncorrelated.
What does the competitive strength assessment chart tell you?
Tells you who are most competitive in regards to the key success factors.
Suppose a company owner says they don't want any debt, what would you say to him/her?
The company would only be able to use internal cash flow to fund its market opportunities.
What is a balanced score card?
Tool that is used to measure financial and strategic objectives
What's the difference between unrelated and related diversification?
Unrelated Diversification is when you have dissimilar value chains and resource requirements between cross-businesses. Related Diversification is when you have cross-business value chain and resource commonalities. Trying to achieve Strategic Fit.
What constitutes as a resource?
VRIN - Valuable Rare Inimitable Nonsubstitutable
What is a vision statement
Where we want to be in the future.
What is a mission statement?
Who we are, what we do.
What is synergy?
building a multi-business company in which the whole is greater than the sum of its parts; such 1 + 1 = 3
What are the guidelines to setting objectives?
• Specific • Measurable • Achievable • Realistic • Timely • Short term and long term stretch objectives