SI 422SI422MidtermStudyGuide. SI422 Midterm Study Guide Module #1: Introduction

Cases  Z o Culture and customer service make them different o Hard to imitate their culture and success o Shows impact of strategy on the FIRM level within a difficult competitive environment  Within a particular competitive environment or industry, strategy can affect a firm’s performance relative to its rivals  An effective strategy requires tradeoffs  Such as kinds Freiburg made  Is zappos doing enough to make itself truly different?  German Soccer o Formed a team rather than having stars o Shows the impact of strategy at the firm level o TRADEOFFS are key to strategy  Taxis o Shows how difficult it is for taxi drivers to make high profits in the industry  This is not because taxi drivers are unintelligent and/or lazy  But no matter how smart or hard working they are, they will find it tough to make profits because their industry is extremely competitive o Medallion owners make the profit in this industry o Costs drivers $45000 /yr. before they make money o Firms do not compete on price Concepts o Principal aims of course  Understand determinants of organizational performance  Make recommendations to organizations that can help them improve their long run performance o Performance = economic profits (focus is mainly on firms) oo What is Strategy? Porter  Operational effectiveness  Refers to the extent to which perform similar activities better than rivals (or “at least as good”)  Strategy  Refers to performing different activities from rivals or performing them in a different way  Choose the right configuration of activities, incentives, systems  Make the right tradeoffs  Strategy rests on unique activities