MGMT 493 Final Berns
Process information comes after product innovation
vis versa product innovation comes before process innovation
Vision and Mission
want a firm wants to accomplish how to accomplish the vision
Popular Business Models
1. Razor-Razorblades 2. Subscription 3. Pay as you go 4. Freemium 5. Wholesale 6. Agency 7. Bundling
Roadster S,X,3
Tesla is known for the? 3 of models are?
In what stage of the industry life cycle are standards established?
The Growth Stage
Co-opetion
Cooperation by competitors to achieve a strategic objective.
Porter's Five Forces
Helps understand profit potential in different industries
lewin suggested organizational change through 3 stages
unfreeze, change, refreeze
uses 3 pillers
Emergent Strategy
-
Intended Strategy
-
Tactical Strategy
-
Unrealized Strategy
-
Joseph Schumpter
A 20th century economist that first associated entrepreneurship with the phrase "creative destruction"
Cash Cows (BCG Matrix)
-low growth, high market share -income finance stars and question marks
How many stages of globalization are there?
3
how many stages are in the industry innovation life cycle?
5
How many dimensions did hofstede have?
6 dimensions
exporting contracts
?
Stakeholder Strategy
A 5-step process recognizing stakeholders' claims. Managers must note 3 stakeholder attributes: Power, Legitimacy, Urgency 1. who are our stakeholders? 2.What are our stakeholders' interests and claims? 3.What opportunities and threats do stakeholders present? 4.What economic, legal, ethical and philanthropic responsibilities do we have to our stakeholders? 5.What should we do to effectively address the stakeholder concerns?
upper-echelons theory
A conceptual framework that views organizational outcomes—strategic choices and performance levels—as reflections of the values of the members of the top management team.
effectively organized
A firm must be ______ to capture value
dynamic capability
A firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage.
Resourced Based View
A model that sees certain types of resources as key to superior firm performance.
sponsor
A person or group who provides resources and support for the project, program, or portfolio and is accountable for enabling success.
industry convergence
A process where formerly unrelated industries begin to satisfy the same customer need.
Moral hazard
A situation in which information asymmetry increases the incentive of one party to take undue risks or shirk other responsibilities because the costs incur to the other party.
casual ambiguity
A situation in which the cause and effect of a phenomenon are not readily apparent.
strategic commitments
Actions to achieve that mission that are; costly, long-term oriented, and difficult to reverse
AFI
Analysis, Formulation, Implementation
BRIC
Brazil, Russia, India, China
path dependency
Business models do not include ___________.
An example of an external transaction cost would be ___________ and an internal transaction cost would be __________
Contract enforcement; employee training
Organic organization
Characterized by a low degree of specialization and formalization, a flat organizational structure, and decentralized decision making.
strategic trade-offs
Choices between a cost or value position. Such choices are necessary because higher value creation tends to generate higher cost.
Best Buy
Competitor- Circuit City CEO- Joly
CAGE stands for
Culture Administrative Geographic Economic
economic value created
Difference between value (V) and cost (C), or (V - C).
sustainable competitive advantage
Doing different activities & doing something better
Competition decreases
During industry growth
explicit knowledge
Easily codified and documented
in class examples of governance and ethics
Epi Pen, wells fargo, martin skreli
Heinz example taled about the potential conflicts of acting _______ and ___________
Ethically; legally
horizontal trend
Ex) 2015-2019
Quanitative and Qualitative
Firms asses advantage through _______ & _________
mergers and acquisitions
Fragmented industry is made into consolidated industry through
Differentiation
Generic business strategy that seeks to create higher value for customers than the value that competitors create.
Cost Leadership
Generic business strategy that seeks to create the same or similar value for customers at a lower cost.
Resource bundles heterogeneity
In class we cut paper into shapes and had to make trades with other students resources, what were we using?
The apple case follows __________ who worries about competition with ___________
Jeff Bezo; Apple, google, facebook
What did the Merek case highlighted both
M&A and Innovation
Stakeholder's liquidity
Mangers don't consider _____ during impact analysis
BCG Matrix 2 product dimensions are
Market growth and relative Market Share
Most M&A fail to live up to performance expectations
Most M&A fail to live up to performance expectations
Compustat
Not a library database
Blue Ocean Strategy
Offer a differentiated product or service at a low cost
What allows for the most integration on the make-or-buy continuum?
Parent- subsidiary relationship
non-equity alliance
Partnership based on contracts between firms. The most frequent forms are supply agreements, distribution agreements, and licensing agreements.
Facebook Case
Perspective was of Sandberg Their quest was to generate more ad revenue
PESTEL
Political Economic Sociocultural Technological Ecological Legal Creates opportunities & threats
focused cost leadership
Same as the cost leadership strategy except with a narrow focus on a niche market.
Economics of Scope
Savings that come from producing two (or more) outputs at less cost, then producing each output individually, despite using the same resources and technology.
In the Merek case who was their noteworthy merger with?
Schering-Plough
SMART
Specific, Measurable, Attainable, Realistic, Timely
scenario planning
Strategy planning activity in which top management envisions different what-if scenarios to anticipate plausible futures in order to derive strategic responses.
Alfred Chandler said
Structure follows Strategy
SCP
Structure, Conduct, Performance
Apple case follows
Tim Cook
BWB
Used triple bottom line
VRIO
Valuable Rare Costly to Imitate Organized to Capture Value
Marketing and Sales
Value chain analysis' primary activity
Vertical trend analysis
Viewing ratios for one given period of time is an example of _______
Best Buy
Was not affected by their monopoly
cannibilization
What does not describe isolating mechanisms firms use?
Low costs
What does not drive up volume?
Unrealized
When a firms strategy falls by the wayside they become
monopolistic competition
When an industry has many firms, a differentiated product, some obstacles to entry, and the ability to raise prices for a relatively unique product while retaining customers.
Oligopoly
When an industry is consolidated with a few large firms, differentiated products, high barriers to entry, and some degree of pricing power.
perfect competition
When the industry is fragmented and has many small firms, a commodity product, ease of entry, and little or no ability for each individual firm to raise its prices.
Monopoly
When there is only one, often large firm supplying the market. The firm may offer a unique product, and the challenges to moving into the industry tend to be high. Considerable pricing power.
Competitive Parity
When two or more firms perform at the same level
Top-Down
Works best when the environment doesn't change much
1. Corporate 2. Business
________ Strategy determines where to compete _________ Strategy determines how to compete
in the BCG framework a question mark has the potential to become
a Star or a Dog
conglomerate
a company that combines two or more strategic business units under one overarching corporation; follows an unrelated diversification strategy
The Heinz case discussed a dilemma between
a druggist and a potential buyer
organizational inertia
a firm's resistance to change the status quo, which can set the stage for the firm's subsequent failure
Patent
a form of intellectual property that gives the inventor exclusive rights to benefit from commercializing a technology for usually 20 years in exchange for public disclosure of the underlying idea
Architectural Innovation
a new product in which known components, based on existing technologies, are reconfigured in a novel way to attack new markets
Trademark
a symbol, word, or words legally registered or established by use as representing a company or product. renewable every 10 years
Tapered Integration
a way of orchestrating value activities in which a firm is backwardly integrated but but also relies on the outside market firms for some of its supplies and/or is forwardly integrated but also relies on outside market firms for some of its distrobution
greenfield operation
building new, fully owned plants a facilities from scratch
What was GE's big divestment?
capital division
formalization
captures the extent to which employee behavior is steered by explicit and codified rules and procedures
Delta case
challenged by changing demographics of customers
Forward vertical integration
changes in an industry value chain that involve moving ownership of activities closer to the end (customer) point of the value chain
Backward vertical integration
changes in an industry value chain that involve moving ownership of activities upstream to the originating (inputs) point of the value chain
mechanistic organization
characterized by a high degree of specialization and formalization and by a tall hierarchy that relies on centralized decision making
Organizational Matrix Structure
combines the functional structure with the multidivisional structure( M-Form) Typically has geographic and SBU divisions
Non-equity alliances are the most
common form of alliances
corporate governance
concerns the mechanisms to direct and control an enterprise in order to ensure that it pursues its strategic goals successfully and legally
Borrowing can include
contract licensing equity
norms
define appropriate employee attitudes and behavior
values
define what is considered important
Internal Stakeholders
employees, owners, board of directors
Firm Effects
firm performance attributed to the actions managers take
According to the CAGE framework
greater cultural similarity of two regions increases trade
Functional structure
groups employees into distinct functional areas based on domain expertise
A firms structure determines
how the work efforts of individuals and teams are orchestrated and how resources are distributed
What is the 4 steps in the innovation process from start to finish?
idea invention innovation imitation
2 paper tower in class activity was to demonstrate
imitation of successful ideas
diseconomies of scale
increases in cost per unit when output increases
2 types of control
input controls and output controls
Offshoring can include both
insourcing activities and outsourcing activities
BWB
is a B corporation
principal
is the individual who gives authority to the agent.
GE CEO is _________ who refocused the companies offerings
jeff immelt
tacit knowledge
knowledge that cannot be codified
customer-oriented
less specific, more flexible
Porter Shared Value
maintain a dual focus on shareholder value creations and value creation for society
project-oriented
more specific, less flexible
What are the components of innovation?
novelty usefulness implimentability
Adverse selection
occurs when information asymmetry increases the likelihood of selecting inferior alternatives
NOT STRATEGY
operational effectiveness & benchmarking
Equity Alliance
partnership in which at least one partner takes partial ownership in the other
External Stakeholders
people or groups in the organization's external environment that are affected by it
open innovation
practices and processes that encourage the use of external as well as internal ideas as well as internal and external collaboration when conceiving, producing, and marketing new products and services
Market Cap
product of the number of outstanding shares and share price
information asymmetry
situation in which one party is more informed than another because of the possession of private information
Which of the following products and services did the amazon case discuss?
smart devices, online content, and web services
3 primary forms of organizations we talked about in class
sole proprietorship partnership corporation
Skunkworks
special creative units set free from the normal structure for the purpose of innovation
4 components/ building blocks of organizational structure
specialization formalization centralization hierarchy
return on risk capital
stock price appreciation + dividends received over a specific period
multidomestic strategy
strategy pursued by MNEs that attempts to maximize local responsiveness, with the intent that local consumers will perceive them to be domestic companies
international strategy
strategy that involves leveraging home-based core competencies by selling the same products or services in both domestic and foreign markets
capital
tangible resources the company owns is called
consumer surplus
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
producer surplus
the amount a seller is paid for a good minus the seller's cost of providing it
Centralization
the degree to which decision making is concentrated at upper levels of the organization
Bank of America case focused on
the financial crisis and actions leading to it
resource stock
the firm's current level of intangible resources
Absorbtive Capacity
the firms ability to understand external technology developments, evaluate them, and integrate them into current products or create new ones
business level strategy
the goal-directed actions managers take in their quest for competitive advantage when competing in a single product market
merger
the joining of two independent companies to form a combined entity
Delta case discussed how airline competition is increasing in
the middle east
local resposiveness
the need to tailor product and service offerings to fit local customer preferences and host country requirements
socialization
the process by which individuals internalize the values, beliefs, and norms of a given society and learn to function as members of that society
Organizational design
the process of creating, implementing, monitoring, and modifying the structure, processes, and procedures of an organization
Horizontal Integration
the process of merging with competitors, leading to industry consolidation
Acquisition
the purchase or takeover of one company by another *can be friendly or unfriendly
core competencies
those functions that the organization can do as well as or better than any other organization in the world
Artifacts
those objects that consist in the organization
80% learning curve
when the cumulative output is double the cost per unit goes down 20%
National competitive advantage
world leadership in specific industries