OAM 331 Exam 1 Latest 2023 Graded A+

OAM 331 Exam 1 Latest 2023 Graded A+ Honda A Logic -fully integrated manufacturer - salves vol obj - innovation to production fast Honda B Entrenpueral spirit and grit -didn't sell bigger bikes - pivot to smaller super cubs -meet nicest people on a honda honda used ___________ for success to US motorcycle - mass production / market -labor productivity -dealer network -low cost Strategy set of activities that work together to create sustainable competitive adv British Motor problems -mechanical failures -low morale in factories -low product efficiency - old machines Henry Mintzberg Honda B supporter - management is practice - strategy emerges from discovery how to increase profits? 1. Raise price 2. Lower Costs Learning Curve Effects increase labor productivity as you make more -lower labor cost per unit experience curve effect same production level, but lower production cost - process innovation / tech strategic planning top down analysis scenario planning ask "what if" questions emerging stragety adapting activities to changing conditions shift in demand curve consumer preferences change (not price of prdct) price discrimination airlines charging higher price for same product weeks ago demand elastivity = %Quantity / % price Fixed Cost -expenses regardless of quantity marginal costs - cost of incremental production (includes Oppertunity cost) Reliance Jio 4g network in India -high FC for long term revenue Keep producing as long as (short run)? MR = MC (long run) "firm break even" cost of capital -can choose FC Shutdown point Price below margin cost/unit Stay in put don't invest Price below ATC/ unit, but above marginal cost/unit price elasticity depends on flexibility of production -more elastic in long term Demand in Short run vs. Long run higher prices vs. higher supply market dynamics supply and demand short run supply is basde on firm's marginal cost in long run fixed costs are ____________ avoidable essence of job of strategist is to _______ ______ _________ cope with competition Porters 5 forces useful in analyzing _______ _________ industry profitability, not firm Porter's 5 forces 1. threat of new Entrants 2. Power of suppliers 3. Power of buyers 4. Rivarly comps 5. substitutes network effects = useful as it has more members (ex. Facebook) barriers to entry: (5) 1. learning curve 2. switching cost 3. customer loyalty 4. start-up costs 5. government restrictions customer price sensitive when: (2) 1. large % of income 2. strapped for cash substitutes often come from _______ the ________ industry. outside the existing industry porters 5 forces pros: - industry level determinants - framework of comp landscape - interpret industry change porters 5 forces cons: - assumes static industry - industries overlap - can't explain profit variance ` stronger the 5 porter forces = ______ industry profit potential lower business comp is about ________ ______, not beating comp making profits gross margin % = = Rev - COGS operation margin = = gross margin - SG&A net margin % = = operation margin - int and tax how do financial ratios relate to strategy: (4) 1. gauge financial health 2. track performance over time 3. Benchmark companies 4. Assess the business model 5 ratio types: 1. profitability 2. efficiency = assets to make sales 3. liquidity = meet short term liab 4. Solvency = debt in capital structure 5. Valuation = relative to comps net profit margin = = N.I / Rev rev kept as income Return on Equity = = N.I / equity how much firm earns per dollar of equity (duPont Formula ) ROE = = (N.I/ Sales) (Sales/Assets) (Assets/ Equity) (profitability) (efficiency) (leverage) inventory turnover = = COGS / avg Inventory quickly goods enter/leave store current ratio = = CA / CL ability to pay off current liab with current asset Financial Leverage Ratio = = TA / TL long term solvency Price to Earnings (P/E) = = price / EPS Strategic positioning means performing _____ activities from rivals oqr similar activities in _______ ways different , different best practices convergence to avg of operational effectiveness operational efficiency operate on productivity frontier (sum of best practices) supercell -best talent of sport team and get out of their way -best small teams, not solo -collection of cells -cross platform + longevity(kill losers) variety based based on prdct segment needs based focus on customer segment access based based on access to customers SouthWest virtous cycle: 1. same type of plane 2. standardized process (uniformity) 3. Fast turn around times 4. high aircraft utilization 5. lower cost branding is important in ______ _______ consumer goods supply chain one persons price, is another person's cost engine 1 vs. engine 2 KO coke drink vs. Costa Coffe and new prdcts nash equilibrium best possible outcome for yourself, not optimal for soceity game theory assumes humans are always ________ rational sequential move game = players take turns simultaneous move game = each player acts independently and unware of other actions static game = only 1 move or decision, once dynamic game = multiple interaction over time 4 behavioral Biases -overconfidence -representative bias = over generalize -confirmation bias -endowment effect crowds make ______ ____ decisions collectively bad (RBV )5 characteristics of valuable resource 1. inimitability 2. depreciates slow 3. value controlled by company 4. not easily substituted 5. better than comp similar resources valuable is ________, ___________, and _____ _____________. relative, context, and time dependent creative destruction = waves of innovation that allow early movers to dominate market criticism of RBV (5) 1. circular logic = rare vs. valuable 2. value is rarely constant 3. minimal research 4. vague definitions 5. black box ambiguity casual ambiguity = not sure what is main driver of value blue ocean strategy (4): 1. unknown market space 2. competition irrelevent 3. break value-cost tradeoff 4. create new demand "4 Strategic moves" (blue ocean) 1. eliminate 2. raise 3. reduce 4. create Start with buyer framework (Blue ocean) buyer util - price - cost - adoption most appropiate unite of analysis is _______ _________ managerial actions