Assessment Study Guide Flashcards
1
Q
Chapter 4 - Levels of Planning
Describe the concepts so strategic vision (intent), mission, and goals.
A
- Strategic Vision :
- points to the future - it provides a perspective on where the organization is headed and what it can become.
- Ideally, the vision statement clarifies the long term direction of the company and its strategic intent.
- Mission :
- is a clear and concise expression of the basic purpose of the organization.
- It describes what the organization does, who it does it for, it’s basic good or service, and it’s values.
- Goals :
- evolves from the mission and vision of the organization.
- The chief executive officer of the organization, with the input and approval of the board of directors, establishes the mission, vision, and major strategic goals.
- The concept and information within the mission statement, vision statement, and strategic goals statement may not be identified as such, but they should be communicated to everyone who has contact with the organization. Large firms generally provide public formal statements of their missions, visions, goals, and even values.
2
Q
Chapter 4 - Resources and Core Competencies
Explain what a Core Competency means for an organization.
A
- A core competence is something a company does especially well relative to its competitors.
- When this competence, say, in engineering or marketing, is in some area important to market success, it becomes the foundation for developing a competitive advantage.
- It can provide A sustainable advantage if it is valuable, rare, difficult to imitate, and well organized.
3
Q
Chapter 2 - The Competitive Environment
Describe what Porter’s Five Forces Model is and how it is used in the strategic planning process.
A
- Porter’s Five Forces Model :
1. Competitors
2. New entrants
3. Substitutes and complements
4. Suppliers
5. Customers - Porter’s model is an excellent method to help managers analyze the competitive environment and adapt to or influence the nature of their competition
4
Q
Chapter 4 - SWOT Analysis and Strategy Formulation
Explain the components of a SWOT analysis and how it is used in the strategic planning process.
A
- once managers have analyzed the external environment and the internal resources of the organization, they will have the information they need to assess the organization’s strengths, weaknesses, opportunities, and threats (also referred to as SWOT)
- strengths and weaknesses = internal resources: example of strength is skilled management whereas en example of weakness is absence of reliable suppliers and lack of spare production capacity
- opportunities and threats = arise in macroenvironment and competitive environment : example of opportunity is new technology, and a market niche, example of threat could be competitors entering underserved niche one it is profitable
- SWOT analysis helps managers summarize the relevant, important facts from their external and internal analyses and based in this summary they identify primary and secondary strategic issues their organization faces
- the managers then formulate a strategy that will build in capitalizing on the organization’s strengthens, neutralizing its weaknesses, and countering potential threats
5
Q
Chapter 4 - Resources and Core Competencies
Describe the types of corporate strategies that organizations can use.
A
- concentration:
- focuses on a single business competing in a single industry
- in the food retailing industry, Kroger, Safeway and A&P all pursue concentration strategies
- frequently, companies pursue concentration strategies to gain entry into an industry when industry growth is good or when the company has a narrow range of competencies
- An example is C.F. Martin & Company, sue’s which pursues a concentration strategy by focusing on making the best possible guitars and guitar strings, a strategy that has enabled the family owned business to operate successfully for more than 150 years.
- Vertical Integration :
- involves expanding the domain of the organization into supply channels or distributors
- At one time, Henry Ford had fully integrated his company from the ore mines needed to make steel all the way to the show rooms where his cars were sold
- vertical integration generally is used to eliminate uncertainties and reduce costs associated with suppliers or distributors.
- Concentric Diversification :
- involves moving into new businesses that are related to the company’s original core business.
- William Marriott expanded his original restaurant business outside Washington, DC, by moving into airline catering, hotels, and fast food.
- each of these businesses within the hospitality industry is related in terms of the services it provides, the skills necessary for success, and the customers it attracts.
- Conglomerate Diversification:
- involves expansion into unrelated businesses
- for example, General Electric Corporation has diversified from its original base in electrical and home appliance products to such wide-ranging industries as health, finance, insurance, truck and air transportation, and even media with its ownership of NBC
- typically, companies pursue a conglomerate diversification strategy to minimize risks due to market fluctuations in one industry.
6
Q
Understand the difference between backward and forward vertical integration.
A
- vertical integration
- a strategy used by a company to gain control over its suppliers or distributors in order to increase the firm’s power in the marketplace, reduce transaction costs and secure supplies or distribution channels
- advantages :
- lower costs due to eliminated market transactions
- improved quality of supplies
- critical resources can be acquired through VI (balanced strategy)
- improved coordination in supply chain
- greater market share
- secured distribution channels
- facilities investment in specialized assets (site, physical assets, and human-assets)
- new competencies
- disadvantages :
- higher costs if the company is incapable of managing new activities efficiently
- the ownership of supply and distribution channels may lead to lower quality products and reduced efficiency because of the lack of competition
- increased bureaucracy and higher investments leads to reduced flexibility
- higher potential for legal repercussion due to size (an organization may become a monopoly)
- new competencies may clash with old ones and lead to competitive disadvantage
- alternatives to vertical integration (from highest integration level to lowest)
- joint ventures
- long-term contracts : licensing, franchising
- short-term contracts
- purchase/market transactions
- forward integration :
- a strategy where a firm gains ownership or increased control over its previous customers (distributors or retailers)
- is implemented when a company wants to achieve higher economies of scale or larger market scale
- is effective when
- few quality distributors are available in the industry
- distributors or retailers have high profit margins
- the industry is expected to grow significantly
- there are benefits of stable production and distribution
- the company has enough resources and capabilities to manage new business
- backward integration :
- a strategy where a firm gains ownership or increased control over its previous suppliers
- is implemented in order to secure stable input of resources and becomes more efficient
- is most beneficial when :
- firm’s current suppliers are unreliable, expensive, or cannot supply the required inputs
- there are only a few small suppliers but many competitors in the industry
- the industry is expanding rapidly
- the prices of inputs are unstable
- suppliers earn higher profit margins
- a company has necessary resources and capabilities to manage the new business
7
Q
Chapter 4 - Business Strategy
Understand the two kinds of business strategies that companies use to gain competitive advantage.
A
- Low-cost Strategies :
- businesses using a low cost strategy attempt to be efficient and offer a standard, no-frills product
- companies that succeed with a lost cost strategy often are large and try to take advantage of economies of scale in production or distribution
- in many cases, their scale allows them to buy and sell their goods and services at a lower price, which leads to higher market share,volume, and ultimately profits
- to succeed, an organization using this strategy generally must be the cost leader in its industry or market segment
- Walmart expresses its lowprice strategy with the slogan “save money, live better”. The company uses the power of its giant size to negotiate favorable prices from suppliers, enabling it to sell at prices below those of most competing retailers
- Differentiation strategy :
- a company attempts to be unique in its industry or market segment along some dimensions that customers value.
- this unique or differentiated position within the industry is based on high product quality, excellent marketing and distribution, or superior service
8
Q
Chapter 4 - The Basic Planning Process
Describe the steps in the strategic planning process.
A
- Situational Analysis
- planners gather, interpret, and summarize all information relevant to the planning issue in question
- studies past events, examines current conditions, and attempts,to forecast future trends
- examine’s internal and external forces and components
- outcome should be the identification and diagnosis of planning assumptions, issues, and problems - Alternative Goals and Plans
- based on situational analysis, planning process should generate alternative goals that may be pursued in the future and alternative plans that may be used to achieve those goals
- step should stress creativity and encourage managers and employees to think in broad terms about their jobs - Goal and Plan Evaluation
- managers will evaluate advantages, disadvantages, and potential effects of each alternative goal and plan
- managers will carefully consider implications of alternative plans for meeting high priority goals - Goal and Plan Selection
- once the various goals and plans have been assessed, managers will select the one that is most appropriate and feasible
- the evaluation Will identify the priorities and trade-offs among the goals and plans - Implementation
- managers and employees must understand the plan, have the resources to implement it, and be motivated to do so
- requires a plan to be linked to other systems in the organization, particularly in the budget and reward systems - Monitor and Control
- managers must continually monitor the actual performance of their work units against the units plans and goals
- they also need to develop control systems to measure the performance and allow them to take corrective action when the the plans are implemented improperly or when the situation changes
9
Q
Chapter 9 - Customers and the Responsive Organization
Define what the value chain concept means, as well as the purpose of a value chain analysis.
A
- A value chain is the sequence of activities that flow from raw materials to the delivery of a good or service, with additional value created at each step
- Research and Development : focus on innovation and new products
- Inbound Logistics : receive and store raw materials and distribute them to operations
- Operations : transform the raw materials into final product
- Outbound Logistics : warehouse the product and handle its distribution
- Marketing and Sales : identify customer requirements and get customers to purchase the product
- Service : offers customer support, such as repair, after the item has been bought
10
Q
Chapter 9 - Customers and the Responsive Organization
Describe what a Total Quality Management (TQM) system is and how implementing one benefits an organization.
A
- is a way of managing in which everyone is committed to continuous improvement of his or her part of the operation
11
Q
Chapter 9 - Customers and the Responsive Organization
Identify and understand the importance of statistical analysis in total quality management (TQM) models/methodologies.
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12
Q
Chapter 9 - Quality Initiatives
Identify key quality management approaches such as Deming’s 14 points.
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13
Q
Chapter 16 - The Role of Six Sigma
Understand and briefly discuss the main ideas behind Six Sigma quality-control tools.
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14
Q
Chapters 9 & 16
Distinguish between quality assurance and quality control.
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15
Q
Describe what a quality audit is and entails.
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16
Q
Chapter 9 - Customers and the Responsive Organization
Describe what Dr. Ohmae’s Strategic Triangle is and how the three components relate to each other.
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17
Q
Chapter 9 - Reengineering and Technology and Organizational Ability
Explain what “Reengineering” is and describe how organizations use Customer Relationship Management tools to better understand and meet their needs.
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18
Q
Chapter 7 - Figure 7.2
Understand and be able to apply the Entrepreneurial Strategy Matrix to assess an entrepreneurial opportunity.
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19
Q
Chapter 7 - Entrepreneurship & What Does It Take, Personally?
Identify the common characteristics that entrepreneurs possess.
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