BCOR 2304 Final Exam Questions and Answers Already Passed

BCOR 2304 Final Exam Questions and Answers Already Passed strategy a set of goal-oriented actions a firm takes to gain and sustain better performance over competitors strategy managment combines analysis, formulation, and implementation in finding competitive advantage mastery= view organization as a whole competitive parity two or more firms perform at the same level strategic positioning position in industry that allows firms to provide value to customers, while controlling costs mission reason for existence, what an organization does vision statement of some desired future state values a statement of key values that an organization is committed to AFI framework Analysis: vision, mission, values Formulation: corporate, business, or functional strategy Implementation: structure, culture, control-- corporate governance and business ethics purpose of AFI -predicts differences in firm performance -create and implement a strategy top-down strategic planning top management attempts to program future success black swan events highly unlikely, but large impact events emergent strategy unplanned strategy from the bottom of the organization. adapting the strategy/original plan to changing market conditions. EX: nyquil realized strategy combination of intended and emergent strategy PESTEL Framework Factors Political, economical, sociocultural, technological, ecological, legal political PESTEL PR, litigation, lobbying economical PESTEL growth rates, interest rates, levels on unemployment, price stability, and exchange rates sociocultural PESTEL demographics, cultural norms ex: rise in electric vehicals technological PESTEL product and process innovations- application of knowledge ecological PESTEL the environment decides the state of usable materials legal PESTEL laws, court decisions, mandates porter's five forces factors risk of entry, competitive rivalry, buyer power, supplier power, substitutes five forces key assumptions -from the point of view of existing firms in the industry -snapshot in time -stronger each force is, the more limits risk of entry - five forces -economies of scale -brand loyalty -absolute cost advantage (relative to new entrants) -if competition is HIGH, barriers to entry are LOW competitive rivalry - five forces companies in the same industry struggle to gain market share buyer power - five forces -purchase in larger quantities -switching costs are low -buy from several supplying companies at once (amazon) -threat of entry can be used to drive prices down supplier power - five forces -products are vital to industry -switching costs for companies are high -suppliers can threaten to enter their customers' industry themselves substitutes - five forces -incumbent firms have in size, cost, quality -the intensity of rivalry among competitors is determined by: competitive industry structure, industry growth, strategic commitments, exit barriers strategic position strategic profile based on the difference between value creation and cost (V-C) <-- economic value network effects the value of a product for a user increases with the number of total users capital requirements "entry ticket" into a new industry resource-based view assumptions -heterogeneity: resources differ across firms -immobility: resources are not transferrable capabilities capacity to deploy tangible resources that have been integrated to achieve desired end state VRIO framework -Valuable (helps firm exploit an external opportunity or offset a threat) -Rare -Inimitable -Organized to capture the value of the resource increase cost of imitation -better expectations of future resource value -path dependence -legally protected (IP) -social complexity -ambiguous cause core rigidity failed core competency walmart cost-leader strategy -low cost leader -invest heavily in operating systems -invest in relationships with suppliers -cost-effective management systems -employees don't have specialized training (no $ spent) -don't invest in marketing/sales, etc obtaining competitive advantage (cost leadership) control cost drivers and emphasize operations and scale risks to cost leadership -competitors imitate -technology changes -blinded by customer preferences differentiation strategy -value by unique features -superior quality -high customer service -prestige or exclusivity -rapid innovation differentiation strategy requirements -develop new systems and processes -shape perceptions through advertising -R&D capabilities -low turnover and high motivation purpose of differentiation strategy -lower subsequent costs (lexus reliability -raise buyer value (mercedes) risks of differentiation strategy -cost of uniqueness is too great -counterfeit products -may no longer be valued by customers focused strategy focusing on one buying group risks of focused strategy -firms may be out -focused by innovative competitors -preferences of niche customers may change` -lack of economies of scale and bargaining power value creation frontier trade offs between low cost and differentiation integrated strategy -substantial process technology superiority ex//: toyota's hybrid engines -focus on specific customer value perceptions while lower costs on other areas -sharing resources, minimizing waste-leveraging brand equity across market segments innovation drives competitive advantage (process) 1) idea 2) invention 3) innovation 4) imitation patent exclusive rights to benefit from using a technology for a specified time period in exchange for public disclosure of the idea trade secret information that a being keeps confidential, no life span. recognized under common laws in each state industry life cycle disruption- new products w/ different tech growth- more entries than exits shakeout- more exits than entries maturity- entry and exits slow and become the same decline-minor or major disruptions first-mover advantages -exploit network effects -establish significant brand loyalty -enable economies of scale and learning effects -creating switching costs for customers -accumulate valuable knowledge and patents -locking up distribution channels and suppliers First mover disadvantages -pioneering costs -quality assurance mistakes -investments in obsolete technology -plunging into the chasm: mass-market may differ from the needs of early adopters patent types utility, design, plant utility patent a patent that protects the functionality of the invention (20 years) design patent a patent that offers protection for the way a product looks (14 years) plant patent new/hybrid product idea patent drawbacks -lengthy and expensive -disclose information than can hurt business trademark distinctive word, name, symbol that identifies a product. 13 months, but lasts indefinitely if renewed copyright legal protection of original works for the life of the author + 70 years blue oceans untapped market space and creation of additional demand red oceans -crowded market space -rivalry is cut-throat -products become commodities and competition is focused on price value innovation leap in differentiation and low cost creates value for both customer and firm Value Innovation - Lower Costs -Eliminate factors -Reduce factors Value Innovation - Increase Perceived Consumer Benefits raise factors create factors path to blue oceans 1- look across alternatives (ex//: NetJet) 2- look across strategic consumer groups (ex Yellowtail) 3- look across chain of buyers 4- look across complementary products/services (ex//: Barnes & Noble) 5-look across functional appeal and emotional appeal to buyers (ex//: Cement for homeless) 6- look across time platform business multi-sided markets; matches producers and consumers and creates value for both platform ecosystem the market environment in which all players participate relative to the platform platform ecosystem benefits 1- platforms scale more efficiently than pipelines by eliminating intermediaries 2- platforms unlock new sources of value creation and supply (ex//: AirBnB) 3- platforms benefit from community feedback (ex//: TripAdvisor) strategies to win platform war -ensure a supply of complements -leverage killer applications -aggressively marketing/price promotions -license the format -cooperate with competitors incremental innovation existing market, existing technology Architectural Innovation new market, existing technology disruptive innovation existing market, new technology radical innovation new market, new technology