STI

A company's business model

deals with whether the revenue-cost-profit economics of its strategy demonstrate the viability of the business as a whole - in effect, it's management's plan for generating revenue and earnings

A "cash cow" type of business

generates negative cash flows from internal operations and thus requires cash infusions from the corporate parent to maintain itself

Driving forces in an industry are

major underlying causes of changing industry and competitive conditions and strongly influence what kinds of changes will occur in the industry in the future

What distinguishes a powerful strategy from a weak one is

management's ability to plan and execute a series of moves, both in the marketplace and internally, that produce a sustainable competitive advantage and has flexibility to respond to changing market conditions

Business Strategy is defined as

none of the above

Factors that cause rivalry among competing sellers to be weak are

rapid growth in buyer demand and high buyer switching costs

Experience curve

shows how costs per unit change with increases in cumulative volume produced. · Does a better job of capturing the effects of economies to scale than a learning curve does because it includes all costs, not just labor are applicable to services as well as manufacturing industries

.Net Promoter Score

tool to measure customer loyalty

A hostile takeover

usually involves a public offer for a target company's stock a specific price, usually at a substantial premium over the prevailing market price, good for a limited period, aimed at capturing a significant percentage of the target film's stock

Which one of the following is NOT part of a company's macroenvironment?

The company's resource strengths and weaknesses and its stated values

What is NOT part of external analysis

The examination of a company's set of resources and capabilities that can be deployed to deliver unique value to customers

Definition of a Good Strategy

They are partly deliberate and partly emergent

Marketers typically segment markets based on various attributes or the price or products

True

Tactics are specific and detailed actions that are taken to allow a strategic plan to happen (who does what to whom)

True

The experience curve is a representation of the relationship between cumulative volume and product cost

True

Which of the following questions is not one of the 5 questions that comprise the task of evaluating a company's resources and competitive positions?

What are the company's most profitable geographic market segments?

The key success factors in an industry

are those competitive aspects that most affect industry members' ability to prosper in the marketplace - the particular strategy elements, product attributes, resources, competencies, capabilities, and market achievements that spell the difference being a strong or weak competitor.

When is Buyer Power High?

Buyer Power High: if customers or buyers can easily switch firms

Strategy making needs to be

Collaborative group effort

Business Unit Strategy

Decisions about how to gain and sustain advantage, made at the manager level for each standalone business unit within a company

Corporate Strategy

Decisions about what markets to compete in, made by executives at the corporate level of an organization.

Which of the following is NOT one of the five basic tasks of the strategy-making, strategy-executing process?

Developing a profitable business model

Balanced scorecard for measuring company performance

Entails putting equal emphasis on financial and strategic objectives

Is the Value Chain Absolute

False

Value is intangible, absolute, and invariable

False

Proprietary knowledge

Information that is not public and that is viewed as the property of the holder

Fragmented Industry

Is an industry which has a lot of competitors

Substitute product

It is a product that is fundamentally different yet serves the same basic function as another product.

3 characteristics of core competencies according to Hammel and Pacchard

It provides potential access to a wide variety of markets. It makes a significant contribution to the perceived customer benefits of the end products. It is difficult for competitors to imitate. (Inimitability)

If a company is successful in becoming the industry's low cost provider than?

Means it has achieved lower overall per unit cost for its product or service

Steps in evaluating the competitive strengths of a company. WHICH is the most important one??

1. Make a list of the industry's key success factors and measures of competitive strength or weakness (6 to 10 measures usually suffice). 2.Assign a weight to each competitive strength measure based on its perceived importance. The weights must sum to 100%. 3. Rate the firm and its rivals on each competitive strength measure and multiply by each measure by its corresponding weight 4. Assess for your company and each competitor. Add the results. Decide what to do. drawing a conclusion-MOST IMPORTANT ONE

2 problems an acquirer may have with an acquiring premium

1. The larger the premium, the more value they must actually create to justify the acquisition 2. given the time value of money, this means that the acquirer must create that value quickly

3 ways a products features differentiates the market

1. The product does a "better job" of meeting a customer need on existing product features 2. The product does "more jobs" for the customer than other products 3. The product does a "unique job" that nothing else does

3 ways to see if you have a winning strategy

A winning strategy must pass three tests: 1. The Fit Test Does it exhibit dynamic fit with the external and internal aspects of the firm's overall situation? 2. The Competitive Advantage Test Can it help the firm achieve a significant and sustainable competitive advantage? 3. The Performance Test Can it produce good performance as measured by the firm's profitability, financial and competitive strengths, and market standing?

Differentiation Strategy

An advantage a firm has over its competitors by making a product more attractive by offering unique qualities in the form of features, reliability and convenience that distinguishes it from competing products.

Diseconomies of Scale

An increase in marginal cost when output is increased. · Ex: large plants become very complex to manage. This increase in size and complexity tends to lead to increased waste and lower employee motivation, which in turn, leads to increased supervision costs · Large firms at a disadvantage during downturns because they have more difficulty spreading fixed costs when demand declines