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Quiz 1 Capstone
| Question | Answer |
|---|---|
| key principles behind strategic positioning | 1. Strategy is the Creation of a unique and valuable position 2. strategy requires trade offs in competing 3. strategy involves creating a "fit" among activities |
| Strategy is the creation of a unique and valuable position: | few needs, many customers; broad needs, few customers; broad needs, many customers |
| Strategy Requires Trade-offs in competing: | Company chooses not only what strategy to follow, but which one not to follow. Example: neutrogena |
| Strategy involves creating a "fit" among activities | The ways a companies activities interact and reinforce each other |
| 3 grand strategies a company can implement: | growth strategy stability defensive |
| growth strategy | involves expansion, as in sales revenues, market share, number of employees, or number of customers. example: Pepsi - designer salt - reduce sodium - increase company base |
| stability strategy | involves little or no significant change ex: bust buy - following same strategy as last year (2009) - keeping prices low and revamping selling space to better showcase its products |
| defensive strategy | involves the reduction in the organizations efforts - retrenchment strategy example: Carnival Corp. Reduced prices during 2009 depression to increase sales. only saw a 10% reduction in revenue |
| Competitive Intelligence | means gaining information about one's competitors so that you can anticipate their moves and react appropriately Can be obtained by: dumpster divind, trade shows, interviewing staff, public print and advertising, annual reports, industry gossip, etc. |
| Contingency Planning | creation of alternative hypothetical but equally likely future conditions. helps prepare for emergencies or uncertainty and get managers thinking strategically |
| Porter's Four Competitive Strategies: | Cost Leadership Strategy Differentiation Strategy Cost-focus strategy focused-differentiation |
| Cost-Leadership Strategy | keep the costs/prices of a product or service below those of competitors and to target a wide market. Example: Dell, Timex |
| Differentiation Strategy | Offer products that are unique and superior value compared to those of competitors but to target a wide market. Example: Ritz Carlton and Lexus |
| Cost-Focus Strategy | keep the costs of a product below those of competitors and target a narrow market. Example: Dirt Cheap liquor and beer store |
| Focused-Differentiation | Offer products that are of unique and superior value compared to those of competitors and to target a narrow market. Example: Rolls-Royce, Ferrari, Lamborghini |
| Porters Five Competitive Forces | 1. Threat of new entrants 2. Bargaining power of suppliers 3. bargaining power of buyers 4. threat of substitute products or services 5. rivalry among competitors |
| Threat of New Entrants | Kraft Macaroni and Cheese is threaded on the low end by Wal-Marts/Schnucks brand and on the high end with Annie's Creamy Macaroni and Cheese |
| Bargaining Power of Suppliers | example: Clark Foam of Laguna Niguel, California - supplied foam to 90% of US Surf Boards. When closed shop in 2005, many independent shops could not afford to get foam outside of the US. |
| Bargaining Power of Buyers | customers who buy a lot of products from a company have more buying power than those who do not. Customers who use the internet to shop around are also better able to negotiate a price - buying a car |
| Threat of substitute products or services | other products available to consumers. |
| Rivalry Among Competitors | cell phone companies |
| Rational Decision Making | refers to how managers should make decisions. IT assumes managers will make logical decisions to optimize the organizations best interest. |
| Stages of Rational Decision Making | 1. Identify the problem or opportunity and analyze it. 2. Come up with alternative solutions 3. Evaluate the alternatives and select one that be ethical, feasible, effective, and in orgs best interest 4. Implement and Evaluate |
| What makes the rational model work? | 1. Complete information - no uncertainty 2. Logical, unemotional analysis 3. best decision for the organization |
| Non-rational Decision Making | describes how managers actaually make decisions, not how they should. Includes bounded rationality, which suggests that the ability of decision makers to be rational is limited by numerous constraints: complexity, time and money, cognitive capacity |
| Satisficing Model of Non-rational | managers seek alternatives until htye find on that is satisfactory, not optimal |
| Incremental Model | managers take small, short-term steps to alleviate a problem |
| Intuition Model | making a choice without the use of conscious thought or logical inference. Sources are expertise and feelings, play devils advocate with intuitive thoughts. |
| Evidence Based Decision Making | Using the best evidence to help navigate the competitive environment. |
| Evidence Based Decision Making - 7 principles | 1. treat your org as unfinished prototype 2. no brag, just facts 3. see yourself as outsiders do 4. not just for senior executives 5. like everything else, you still need to sell it. 6. if all else fails, slow spread of badnews 7. what if we |
| What makes it difficult to be evidence based? | 1. too much evidence 2. not enough good evidence 3. evidence doesn't quite applyu 4. pople are trying to mislead you 5. you are trying to mislead you (can't be unbiased) 6. the side effects outweigh the cure 7. stories are more persuasive any |
| Group Decision Making - Advantages | 1. greater pool of knowledge 2. different perspectives 3. intellectual perspectives 4. better understanding of decision rationale 5. deeper commitment to the decision |
| Group Decision Making - Disadvantages | 1. a few people dominate or intimidate 2. groupthink 3. satsificing 4. goal displacement 5. the group size affects decision quality 6. the group may be too confident 7. knowledge counts even if there are more ideas |
| Four Styles of Decision Making | 1. Directive 2. Analytical 3. Conceptual 4. Behavioral |
| Directive | people are efficient, logical, practical, and systematic in their approach to problem solving. Action oriented, decisive, and likes to focus on facts |
| Analytical | considers more information and alternatives |
| Conceptual | takes a broad perspective to problem solving. Likes to consider many options and future possibilities. |
| Behavioral | supportive, receptive to suggestions, show warmth. prefer verbal to written information |
| Ineffective Responses to Decision Situation | 1. relaxed avoidance - no action because no belief that the situation is urgent 2. relaxed change - take the easiest way out 3. defensive avoidance - "pass the buck" procrastinate and deny 4. Panic - frantic and cannot deal with the situation. |
| Clan | a culture that encourages cohesiveness, participation, communication, and empowerment. The cultures end results include high morale, people development, and employee commitment |
| Adhocracy | A culture that encourages adaptability, creativity, and agility. This cultures end results include innovation, growth, cutting edge output. |
| Market | a culture that emphasizes customer focus, productivity, enhancing competitiveness in order to obtain competitive advantage. this culture results in an increase in market share, profitability, and goal achievement |
| Hierarchy | a culture that emphasizes control over flexibility, has an internal focus and values stability. results in efficiency, timeliness, smooth functioning |
| Espoused Values vs Enacted Values | Espoused: explicitly stated values and norms preferred by an organization Enacted Values: values and norms actually exhibited in the organization |
| How do cultures become embedded into an organization: | 1. formal statements, 2. slogans and sayings, 3. stories, legends and myths, 4. leader reaction to crisis, 5. role modeling, training, and coaching, 6. physican design, 7. rewards, titles, promotions, and bonuses, 8. org goals and performance criteria |
| Purpose of Org Chart | illustrates lines of authority and the organizations official positions or work specializations. |
| 6 Elements of Organization | 1. Common Purpose: unifies employees or members and gives everyone an understanding of hte org reason for being. 2. Coordinated Effort: the coordination of individual effort into group wide effort |
| 6 Elements of Organization | 3. Division of Labor: arrangement of having discrete parts of a task done by different people 4. hierarchy of authority: control mechanism for making sure the right people do the right things at the right time. |
| 6 Elements of Organization | 5. Span of Control: refers to the number of people reporting directly to a given manager 6. Authority: responsibility and delegation. |
| Vertical Structure | 1. mechanistic 2. centralized hierarchy of authority 3. many rules and procedures 4. specialized tasks 5. formalized communiccation 6. few teams or task forces 7. narrow span of control, taller structure. |
| Horizontal Structure | 1. Organic 2. Decentralized hierarchy of authority 3. few rules and procedures 4. shared tasks 5. informal communication 6. many teams or task forces 7. wider span of control, flatter structure. |
| Ways to deal with change and innovation | allow room for innovation give one consistent explanation for the change look for opportunities in unconventional ways have the courage to follow your ideas allow grieving and move on\ |
| Reactive vs proactive change | reactive: making changes in response to problems or opportunities as they arise proactive change: involves making carefully thought-out changes in anticipation of possible or expected problems or opportunities, also called planned change |
| Areas in which change is often needed | 1. People - attitudes, perceptions, performance, skills 2. technology 3. structure: eliminating layers and becomng less vertical 4. strategy: changing marketplace means ppossible new markets to serve causing a need for new strategies. |
| 4 types of innovation | product process incremental radical |
| product innovation | change in the appearance or performance of a product or the creation of a new one |
| process innovation | change in the way a prodcutt is conceived, manufactures, or disseminated |
| incremental innovation | creation of products, services, or technologies that modify exisiting ones |
| radical innovation | creation of products, services, or technologies that replace existing ones. |
| causes of resistance to change | - individuals predisposition toward change - supise and fear of hte unknown - climate of mistrust - fear of failure - loss of status or job security - peer pressure |
| causes of resistance to change | - disruption of cultural traditions or group relationships - personality conflicts - lack of tact or poor timing - non-reinforcing reward system |
| Lewin's Change Model | unfreezing - creating the motivation to change changing - learning new ways of doing things refreezing - making new ways normal |
| Why is control needed 6 reasons | 1. to adapt to change and uncertaintly - can help managers anticipate, monitor, and react to changes their company's environment 2. To discover irregularities and errors: helps to identify small problems before they become major issuess |
| why is control needed 6 reasons | - to reduce costs, increase productivity,or to add value - to detect opportunties: can help realize opportunites that may have been missed. |
| why is control needed 6 reasons | - to deal with complexity: helps coordinate activities - to decentralize decision making and facilitate teamwork - encourages empowerment |
| 6 areas of control | 1. physican area - building, equipment, tangible products 2. human resources areas - monitoring employee performance, job satisfaction, and helath hazards 3. informational area - scheduled, revenue forecases, analysis of competitors |
| 6 areas of control | 4. financial area: incolves cash flow, debt payment, and collections 5. structural area: bureaucratic or decentralized control 6. cultural area: refers to corporate culture. |
| Balanced Scorecard and its components | Gives top managers a fast but comprehensive view of the organization via four indicators: 1. customer satsifaction 2. internal processes the organizations innovation and improvement activities 4. financial measures |
| What is Deming Management | W. Edward Deming proposed several ideas for making organizations more responsive, more democratic, and less wasteful. They include the following |
| Deming Management includes | 1. quality aimed at customer needs 2. companies aim at improving the system, not blaming the workers 3. improved quality leads to increased market share, increased company prospects, and increased employment |
| Deming Management includes cont. | 4. quality can be improved on the basis of hard data |
| TQM | total quality mangement: a comprehensive approach, led by top management and supported throughout the organization, dedicated to continuous wuality improvement, training, and customer satisfaction |
| TQM Techniques | benchmarking outsourcing reduced cycle time ISO 9000 and 14000 series Statistical process control - run rnadom samples from production runs Six Sigma and Lean Sic Sigma |
| Barriers to control success | 1. too much control: ex. regulating employee behavior 2. too little employee participation: 3. overemphasis on means instead of ends 4. overemphasis on paperwork 5. overemphasis on one instead of multiple |
Created by:
btrflysue33