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Business Policy
Chpt 1,2,3,5
71
Business
Undergraduate 4
02/14/2008

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Term
The Strategic management of an organization entails three ongoing processes:
Definition
Analyses, Decisions, and Actions
Term
External Control
Definition
The environment is the key force in determining organization's succes
Term
Romantic Perspective
Definition
The leader is the key force in determining organization's success
Term
Strategic analyses is concerned with what
Definition
Vision, Mission, and Strategic objectives, and internal and external environment
Term
Vision is
Definition
represents a destination that is driven by an evoked passion
Term
Mission is
Definition
How to od it successfully. Effective statements incorporate the concept of stakeholder management,suggestions that organizations must respond to multiple constituenceies if are to survive and prosper. should be able to tell what the business is from mission statement
Term
Core Purpose
Definition
organizations most fundamental reasons to exist
Term
BHAG's are
Definition
Big, Hairy, Audacious, Goals
Term
What two questions must a leader ask themselves during strategic decisions
Definition
1. How should we compete in those industries 2. what industries should we compete in
Term
What happens during strategic action
Definition
strategies are implemented, necessary resources are designed to bring plan to reality
Term
Key Attributes of Strategic Management
Definition
1. Directs the organization toward overall goals and objectives
2.Includes multiple stakeholders in decision making
3.Needs to incorporate short-term and long-term perspectives
4.Recognizes trad-offs b/t efficiency and effectivness
Term
Henry Mintzberg suggests
Definition
The business process is highly unpredictable. Ex: going to see a movie (intended strat) Turns out the line is too long (Unrealized Strat) So, you modify strat (deliberate Strat) so that an Emergent strategy brings you to the realized strategy to go do something else.
Term
The primary participants in corporate Governance are
Definition
1.The Shareholders
2.The Management
3.board of directors
Term
what are 5 prominent stakeholder groups
Definition
1.customers 2.employees/managers 3.suppliers (or goods,services, and capital
4.The community at large
5.Owners
Term
What are two alternative perspectives of stackeholder management
Definition
Zero Sum and Symbiosis
Term
Zero Sum Define
Definition
management is to look upon the various stakeholders as competing for the attention and resources of the organization. Gain of one is a loss for another Ex:employee wants higher wage which drives down price.
Term
Symbiosis means
Definition
recognizes that stakeholders are dependent upon each other for their success and well-being. There is interdependance among employees, suppliers, customers, shareholders, and the community at large.
Term
What is the triple bottom line
Definition
Evaluation of Financial, Social, and environmental performance
Term
What are some key driving forces in the strategic management perspective
Definition
Globalization, technology, and intellectual capital
Term
What are strategic objectives
Definition
used to operationalize the mission statement.provide guidence on how organization can fulfill or move toward "higher goals"
Term
For objectives to be meaningful, they need to satisfy several crieria
Definition
1.Measurable 2.Specific 3.Appropriate 4.Realistic 5.Timely
Term
CHPT2 Managers become environmentally aware by doing three things
Definition
1.scanning 2.monitoring 3.gathering competitive intelligence
Term
what does environmental scanning consist of
Definition
successful scanning alerts organization to critical trends and events before changes have developed. At times consulting outside study groups for globalization, Time to Market, Shifting Roles and Responsibilities
Term
Environmental Monitoring
Definition
tracks the evolutionof environmental trends, sequence of envents, or streams of activities.
Ex:A Montel 6 Executive-number of rooms in the budget segment of the industry in the US and the difference b/t avg daily room rate and the Consumer Prince Index
Term
Competitive Intelligence
Definition
Helps firms define and understand their industry and identify rivals' strengths and weaknesses.
EX: Banks track home loan, auto loan, certificate of deposit, interest rate charged by peers in a given geographic region.(this could lead to unethical behavior like spying) Encyclopaedia Britannica didn't do good competitive intelligence.
Term
Environmental Forecasting
Definition
Scanning, monitoring, and competitve intelligence pulled together to provide accurate forcasts about direction, scope, speed, and intensity.
Ex: Motel 6 not wanting to build to few nor too many rooms in certain area
Term
what is scenario analysis
Definition
draws on range of disciplines and interests, among them economies, psychology, sociology, and demographics.
Term
Scenario Planning
Definition
military first used tech. which provides worst case scenarios vs best case. Shell Oil held out better during hte 70's oil embargo.
Term
SWOT stands for
Definition
strengths, weaknesses, opportunities, and threats.
Term
Six segments of the General Environment
Definition
Demographic, sociocultural, political/legal,technological,economic,and global.
Term
Demographic Segment consists of
Definition
root of many changes in society such as aging population, rising or declining affluence, changes in ethnic composition, geographic distribution of populaiton, and disparities in income level.
Ex: aging US pop has had positive effect on the health care industry but a negative impact on the industry that produces diapers and baby food.
Ex:shift in population in US like 13% growth occured in South and West regions.
Term
Sociocultural environemnt consists of
Definition
Ex: more women in the workplace
-increase in temporary workers
-greater concern for fitness
-greater concern for environment
Term
Political/Legal Environment consists of
Definition
Ex -Americans with Disabilities Act
-Increases in Federal minimum wage
-Sarbanes-Oxley Act
Term
Technological Environment Consists of
Definition
Ex: -Genetic engineering
-Emergence of Internet Technology
-Compute-aided design/computer-aided manufacturing
-wireless communication
Term
Economic Environment consists of
Definition
Ex: -interest rates
-unemployement
-trends in GDP
Term
Global environment consists of
Definition
Ex: -Increasing global trends
-currency exchange rates
-creation of World Trade Organization
Term
Give example of relationship among elements of general environment
Definition
aging pop and pop shift affects (tax policies to provide benefits to increasing number of citizens) political segment (redistribuition of seats in the house, incrases power of some states reduce others)
Term
Maquiladoras are
Definition
originated in Mexico, spanish word that refers to manufacturing and export assembly plants that are owned by US, Japanese, and European Companies
Term
What are Porter's Five-Forces
Definition
1.Threat of new entrants
2.The bargaining power of buyers
3.The bargaining power of suppliers
4.The threat of substitute products and services
5.The intensity of rivalry among competitors in an industry
Term
Threat of New Entrants
Definition
1.Economies of scale,spreading cost of production over the # of units
2.Product Differentiaiton,forces entrants to spend heavily to overcome customer loyalties
3.Captial Requirments
4.Switching Costs
5.Access to Distribution Channels
6.Cost Disadvantages Independent of Scale, derive from gov subsidies,favorable gov policies,proprietary product
Ex: electronic phone book
Term
The Bargaining Power of Buyers Consists of
Definition
buyers threaten industry by forcing down prices,bargaining for higher quality or more services, and playing competitors against each other.Buyer group is powerful if...
1.It is concentrated or purchases large volumes relative to seller sales.
2.The products it purchases from the industry are standard or undifferentiated
3.The buyer faces few switching costs
4.It earns low profits
5.The buyers pose a credible threat of backword integration
Term
The threat of substitute products and services
Definition
other products of service that can perform the same function as the industry's offerings.
Term
The Intensity of Rivalry among Competitors in an Industry..is the result of
Definition
-numerous or equally balanced competitors
-slow industry growth
-high fixed costs
-lack of differentiation or switching costs
-Capacity augmented in large increments
-high exit barriers
Ex: Viagra vs Cialis(with less side effects)
Term
Give example of a threat of obsolescence faced by the core activities of a firm
Definition
information needed ot purchase a vehicle is on the web.
Term
give an example of the threat of obsolescenece faced by an industry's core assets
Definition
Ex: video rental used to be based on location and selection in stores. Now, video downloads make location obsolete
Term
give example when radical change occurs in a company
Definition
overnight delivery industry like FEDEX experiencing problems with fax, e-mails, and internet
Term
Give example when corps assets are threatend, but core activities are not
Definition
film industry,pharmaceuticals, oil and gas b/c relationship with suppliers is constant
Term
progessive change occurs in industries where neither core assets nore core activities face imminent threat of obsolescence.
Definition
Ex: commercial airline industry and discount retail industry
Term
What are strategic groups, give example
Definition
identifying groups within firms that are more similar than others. Ex:Ferrari can not compete against Toyata/ford/gm etc.
Term
#3 In competitive terms what does value mean
Definition
amount that buyers are willing to pay for what a firm proivides them
Term
IN the value chain what are the five primary activities
Definition
Inbound logistics, Operations, Outbound logistics, Marketing and sales, Service
Term
What are the support activities in the value chain
Definition
General administration, human resource management, technology development, and procurement
Term
List examples of Inbound logistics
Definition
associated with receivin, storing, and distributing inputs to product like JIT Ex: all ingredients on counter to make cake
1.location of distribution facilities to minimize shipping times
2.Systems reduce time to send "returns" to suppliers
3.Wharehouse layout and design to increase efficiency
Term
List examples of Operations
Definition
transfering all inputs into the final product form, such as machining, packaging, assembly, testing Ex: mixing all the cake ingrediants.
Term
List examples of Outbound logistics
Definition
collecting, storing,and distributing the product or service to buyers including warehousing, material handling, delivery vehicle operation
Ex: cutting cake and storing
Term
Marketing and Sales
Definition
advertising,promotions, sales force, quoting. Key is to convince your channel partners it is in their best interest to carry your product
Term
List examples of Service
Definition
-quick response to customer needs and emergencies
-ability to furnish replacement parts as required
-Quality of service, personnel, and ongoing training
-Appropriate warranty and guarantee policies
Term
General administration in the value chain consists of
Definition
includes general management, planning, finance, accounting, legal and governmant affairs. Can provide competitive advantage EX: telephone operating company negotiating with regulatory bodies can be valuable.
Term
Human Resource Management consist of
Definition
Recruiting, hiring, training, development, and compensation of all types of personnel. EX: Jet Blue friendly hiring program for talent
Term
Technology development consists of list examples
Definition
Performance materials-development of uniquely shaped fibers with very high absorption capability
Control systems-Honeywell developed software using "Self-Learning" algorithms to predict when something might go wrong.
Term
List examples of procurement
Definition
Ex: like buying materials to bake a cake
-Ability to make proper lease-versus-buy decisions
-Effective procedures to purchase adversing and media services
Term
Resouce based view of the firm consists of what three resources
Definition
Tangible, Intangible, Organizational Capabilities
Term
give an example of tangible resources
Definition
include the physical and financial assets that an organization uses to create value for its customers. Ex: firms cash, receivables, companys plant, machinery
Term
give an example or two of intangible resources
Definition
includes human resource like capabilities of employees, trust, brand name, reputation with suppliers etc.
Term
Give examples of Orgainzational Capabilities
Definition
not specific tangible or intangible assets, but rather the competencies or skills that a firm employes to transform inputs into outputs.
Ex:Gillett's ability to combine several technologies has been key to succes in wet-shaving industry
Term
for a resource to provide a sustainable advantage it must be what four things
Definition
Valuable,Rare,Difficult to imitate,Difficult to substitute
Term
What makes a reource valuable
Definition
when they enable a firm to formulate and implement strategies that improve it efficiency or effectiveness
Term
Having a product that is not easily imitatesd means
Definition
contrains competition
Ex: Monster.com has easily imitated product b/c other dot coms jump on board.
must maintain physical uniqueness,Path Dependency,Causal Ambiguity,Social Complexity
Term
Path Dependency means
Definition
resources are unique and scarce b/c of all that happened along th epath followed in their development and/or accumulation. Ex: Gerber baby food brand name is potentially inimitable
Term
Causal Ambiguity
Definition
Term
social complexity Means
Definition
typically beyond the firms ability to systematically manage or influence.
wide variety can be considered
EX: interpersonal relations with managers within the firm, with suppliers and customers
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