BCOR 460 Exam 1 Latest 2023 Graded A

BCOR 460 Exam 1 Latest 2023 Graded A Strategic Management integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage strategy set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors plan, ploy, pattern, position, perspective 5 P's of Strategy plan consciously intended course of action to deal with a situation ploy specific "maneuver" intended to outwit a competitor pattern consistent stream of action position location among competitors perspective how strategy is conceived by the firm and managers diagnosis, guiding policy, set of coherent actions 3 components of good strategy business model explains how a firm intent to make money competitive advantage superior performance relative to other competitors in the same industry or the industry average sustainable competitive advantage outperforming competitors or the industry average over a prolonged period of time competitive disadvantage underperformance relative to other competitors in the same industry or the industry average competitive parity performance of two or more firms at the same level strategic positioning staking out a unique position within an industry that allows a firm to provide value to customers, while controlling costs industry effects firm performance attributed to the structure of the industry in which the firm competes firm effects firm performance attributed to the actions managers take black swan events incidents that describe highly improbable but high-impact events stakeholders organizations, groups, and individuals that can affect or be affected by a firm's actions stakeholder strategy an integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage stakeholder impact analysis a decision tool with which managers can recognize, prioritize, and address the needs of different stakeholders, enabling the firm to achieve competitive advantage while acting as a good corporate citizen power, legitimacy, urgency 3 important stakeholder attributes identify stakeholders step 1 stakeholder impact analysis identify stakeholders' interests step 2 stakeholder impact analysis identify opportunities and threats step 3 stakeholder impact analysis identify social responsibilities step 4 stakeholder impact analysis corporate social responsibility framework that helps firms recognize and address the economic, legal, social, and philanthropic expectations that society has of the business enterprise at a given point in time address stakeholder concerns step 5 stakeholder impact analysis AFI Strategy Framework model that links three interdependent strategic management tasks - analyze, formulate, and implement - that together, help managers plan and implement a strategy that can improve performance and result in competitive advantage analysis diagnosis of the competitive advantage formulation guiding policy to address the competitive challenge implementation set of actions included in the firm's guiding policy strategic management process method put in place by strategic leaders to conceive and implement strategy, which can lay the foundation for a sustainable competitive advantage strategic leadership executives' use of power and influence to direct the activities of others when pursuing an organization's goals differentiation, cost leadership two ways to create value differentiation increase intrinsic value through creating a quality brand and good quality products cost leadership lower relative price best cost integration of differentiation and cost leadership strategies vision statement about what an organization ultimately wants to accomplish; captures the company's aspirations mission description of what an organization actually does - products and services it plans to provide, and the marketing in which it will compete strategic commitments actions that are costly, long-term-oriented, and difficult to reverse product oriented vision defines a business in terms of a good or service provided; force managers to take a more myopic view of the competitive landscape customer-oriented vision defines a business in terms of providing solutions to customer needs organizational values ethical standards and norms that govern the behavior of individuals within a firm or organization strategic leadership behaviors and styles of executives that influence others to achieve the organization's vision and mission goals incremental objectives to fulfilling the strategy and achieving a competitive advantage Specific, Measurable, Aggressive, Realistic, Time-Bound SMART Goals Specific goals should be explicit and direct people's energy effectively Measurable goals should be quantifiable, will help measure success Aggressive goals should be challenging Realistic goals should be achievable, lofty but reasonable Time-Bound goals should be finite, based on a delineated timeline 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, who interpret situations through the lens of their unique perspectives Level-5 leadership pyramid conceptual framework of leadership progression with five distinct sequential levels level-1 manager is a highly capable individual who makes productive contributions through motivation, talent, knowledge, and skills level 2 manager masters the skills required at Level 1, but is also a contributing team member who works effectively with others to achieve synergies and team objectives level 3 managers is a well-rounded and highly capable manager, who "does things right"; is an effective team player and organizes resources effectively to achieve predetermined goals level 4 leader who determines what the right decisions are; effectively communicates a compelling vision and mission to guide the firm toward superior performance; "does the right things" level 5 manager reaches a leadership pinnacle, turning into a strategic leader; an executive that builds enduring greatness into the organizations he or she leads strategy formulation the choice of strategy in terms of where and how to compete corporate strategy concerns questions relating to where to compete (industry, market, geography) business strategy concerns the question of how to compete (cost leadership, differentiation, or integration) functional strategy concerns the question of how to implement business strategy (logistics, operations) corporate level strategy objective to increase overall corporate value so that it is higher than the sum of the individual business units strategic business units (SBU) standalone division of a larger conglomerate with its own profit-and-loss responsibility top-down strategic planning rational, top-down process through which management can program future success; typically concentrates strategic intelligence and decision-making responsibilities in the office of the CEO scenario planning strategy-planning activity in which managers envision different what-if scenarios to anticipate plausible futures dominant strategic plan strategic option that top managers decide most closely matches the current reality and which is then executed illusion of control the hard numbers in a strategic plan can convey a false sense of security intended strategy outcome of a rational and structured, top-down strategic plan realized strategy combination of intended and emergent strategy emergent strategy any unplanned strategic initiative undertaken by mid-level employees of their own volition strategic initiative any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures planned emergence strategy process in which organizational structure and systems allow bottom-up strategic initiatives to emerge and be evaluated and coordinated by top management macro-, industry-, strategic group firm's external environment 3 levels industry environment the competitive forces in the industry in which a firm operates macro-environment national and global events and trends PESTEL model a framework that categorizes and analyzes an important set of external forces (political, economic, sociocultural, technological, ecological, and legal) that might impinge upon a firm. These forces are embedded in the global environment and can create both opportunities and threats for the firm political environment the processes and actions of government bodies that can influence the decisions and behavior of firms legal environment the official outcomes of political processes as manifested in laws, mandates, regulations, and court decisions; tend to affect entire industries at once economic factors largely macroeconomic: growth rates, interest rates, levels of employment, price stability (inflation and deflation), currency exchange rates growth rate measure of the change in amount of goods and services produced by an nation's economy interest rates amount that savers are paoid for use of their money and the amount that borrowers pay for that use level of employment boom times = low unemployment & skilled human capital is scarce and more expensive economic downturns = rise in unemployment, abundant skilled human capital, wages fall price stability lack of change in price levels of goods and services inflation too much money in an economy, rising prices, higher interest rates, lower economic growth deflation decrease in overall price level, caused by sudden drop in demand currency exchange rate how many dollars one must pay for a unit of foreign currency sociocultural factors a society's cultures, norms, and values demographic trends population characteristics related to age, gender, family size, ethnicity, sexual orientation, religion, and socioeconomic class technological factors application of knowledge to create new processes and products ecological factors broad environmental issues such as the natural environment, global warming, and sustainable economic growth industry group of (incumbent) companies that face more or less the same set of suppliers and buyers; those firms tend to offer similar products or services to meet specific customer needs industry analysis method to identify and industry's profit potential and derive implications for a firm's strategic position within an industry strategic position firm's straategic profile based on value creation and cost; goal is to generate as large a gap as possible between the value the firm's product or service creates and the cost required to produce it five forces model framework developed by Michael Porter that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy, helps managers assess the attractiveness of an industry the lower the industry's profit potential (making the industry less attractive) the stronger the five forces, the greater the industry's profit potential (making the industry more attractive) the weaker the five forces, threat of entry, power of suppliers, power of buyers, threat of substitutes, rivalry among existing competitors 5 competitive forces of Porter's model threat of entry risk that potential competitors will enter an industry entry barriers obstacles that determine how easily a firm can enter an industry; often one of the most significant predictors of industry profit potential economies of scale, network effects, customer switching costs, capital requirements, advantages independent of size, government policy, credible threat of retaliation important sources of entry barriers (7) economies of scale cost advantages that accrue for firms with larger output because they can spread fixed costs over more units, can employ technology more efficiently, can benefit from more specialized division of labor, and can demand better terms for their suppliers (drive down cost per unit allowing for a cost advantage over new entrants) network effects positive effect that one user of a product or service has on the value of that product or service for other users switching costs incurred by moving from one supplier to another; one-time sunk costs which can be quite significant and a formidable barrier to entry brand loyalty, proprietary technology, preferential access to raw materials and/or distribution channels, favorable geographic locations, cumulative learning and experience effects advantages independent of size (5) bargaining power of suppliers pressures that industry suppliers can exert on an industry's profit potential, reduce a firm's ability to obtain superior perforamnce power of buyers pressure an industry's customers can put on the producer's margins in the industry by demanding a lower price or higher product quality backward integration occurs when a buyer moves upstream in the industry value chain, into the seller's business threat of substitutes idea that products or services available from outside the given industry will come close to meeting the needs of current customers competitive industry structure elements and features common to all industries, including the number and size of competitors in an industry, whether the firms possess some degree of pricing power, and the type of product or service the indusry offers perfect competition, monopolistic competition, oligopoly, monopoly four main competitive industry structures perfectly competitive industry characterized as 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; consumers make purchasing decisions solely on price monopolistic competition industry characterized by many firms, a differentiated product, some obstacles to entry, and the ability to raise prices for a relatively unique product while retaining customers; firms offer products or services with unique features oligopolistic industry with few (large) firms, differentiated products, high barriers to entry, and some degree of pricing power; competing firms are interdependent monopoly only one (large) firm supplying the market; challenges to moving into the industry tend to be high; high profitability exit barriers obstacles that determine how easily a firm can leave an industry the stronger the forces, the lower the industry's ability to earn above-average profits and the lower the firm's ability to gain and sustain a competitive advantage key take-away from the five forces model complement product, service, or competency that adds value to the original product offering when the two are used in tandem complementor company that provides a good or service that leads customers to value your firm's offering more when the two are combined co-opetition cooperation by competitors to achieve a strategic objective industry convergence process whereby formerly unrelated industries begin to satisfy the same customer need strategic group set of companies that pursue a similar strategy within a specific industry strategic group model framework that explains differences in the firm performance within the same industry by clustering different firms into groups based on a few key strategic dimensions expenditures on R&D, technology, product differentiation, product and service offerings, pricing, market segments, distribution channels, customer service strategic dimensions (8) mobility barriers industry-specific factors that separate one strategic group form another core competencies unique strengths that are embedded deep within a firm, that allow a firm to differentiate its products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost resources any assets that a firm can draw on when formulating and implementing a strategy capabilities organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically activities distinct and fine-grained business processes that enable firms to add incremental value by transforming input into goods and services resource-based view model that sees certain types of resources as key to superior firm performance, if a resource exhibits VRIO attributes, the resource enable the firm to gain and sustain a competitive advantage tangible resource resources that have physical attributes and thus are visible intangible resources resources that do not have physical attributes and thus are invisible resource heterogeneity assumption in the resource-based view that a firm is a bundle of resources and capabilities that differ across firms resource immobility assumption in the resource-based view that a firm has resources that tend to be "sticky" and that do not move easily from firm to firm VRIO framework theoretical framework that explains and predicts firm-level competitive advantage; firm can gain a competitive advantage if it has resources that are valuable(V), rare(R), and costly to imitate(I); must also organize(O) to capture the value of the resources valuable resource one of the four key criteria in the VRIO framework; resource helps a firm increase the perceived value of its product or service, either by adding attractive features or lowering costs rare resource one of the four key criteria in the VRIO framework; if the number of firms that possess it is less than the number of firms it would require to reach a state of perfect competition costly-to-imitate resource one of the four key criteria in the VRIO framework; do not possess the resource are unable to develop or buy the resource at a comparable cost organized to capture value one of the four key criteria in the VRIO framework; characteristic of having in place an effective organizational structure, processes, and systems to fully exploit the competitive potential of the firm's resources, capabilities, and competencies isolating mechanisms barriers to imitation that prevent rivals from competing away the advantage a firm may enjoy path dependence situation in which the options one faces in the current situation are limited by decisions made in the past causal ambiguity situation in which the cause and effect of a phenomenon are not readily apparent social complexity situation in which different social and business systems interact with one another dynamic capabilities firm's ability to create, deploy, modify, reconfigure, upgrade, and leverage its resources in its quest for competitive advantage dynamic capabilities perspective model that emphasizes a firm's ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment resource stocks firm's current level of intangible resources resource flows firm's level of investments to maintain or build a resource value chain internal activities a firm engages in when transforming inputs into outputs; each activity adds incremental value; primary activities directly add value; support activities add value directly activities distinct action s that enable firms to add incremental value at each step of transforming input into goods and services primary activities firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain support activities firm activities that add value indirectly, but are necessary to sustain primary activities SWOT analysis framework that allows managers to synthesize insights obtained from an internal analysis of the company's strengths and weaknesses with those from an analysis of external opportunities and threats