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Definition
The science of strategy
started as a branch of applied math
systematic way to develop strategies |
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Definition
| situation of strategic interdependece |
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If I win you lose
For every winner there is a loser |
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| the principle of looking ahead and reasoning back can (but doesn’t have to) determine the outcome of the process even before it starts (if n = large, 50/50 split) |
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Sequential Games
Rule:
Tool: |
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Definition
Alternating moves
Rule: Look ahead reason back
Tool: Game Tree |
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Simultaneous Games
Rule1:
Rule2:
Rule3:
Tool: |
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Definition
act at the same time
Rule1:if you have a dominant strategy use it
Rule2:Eliminate dominated strategies
Rule3: In absence of dominant or dominated strategies look for equilibrium
Tool: Payoff tables |
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| Car dealer advertising Game |
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Your best response given your rival’s best response, or
Situation in which none of the players has an incentive to change his/her strategy |
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Definition
| Best strategy is to mix your moves randomly |
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Definition
Player
Added Values
Rules
Tactics
Scope of the Game |
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Definition
Customers
Your Company
Complementors
Competitors
Suppliers |
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Definition
| customers value your product more when they have the other player's pruduct |
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| customers value your product lees when they have the other players product |
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Definition
| =(Size of the pie when your are in the game)-(size of the pie when you are out) |
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Definition
Customs
Contractual Arrangements
Goverment |
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Definition
moves used to shape the player's perceptions of the game and hence how they play it
Designed to reduce misperceptions
Designed to create uncertainty |
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| Describers the boundaries of the game |
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Seeing only part of the game
Failing to think methodically about changing the game
Believing that success must come at others' expense
Accepting the game as it is |
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Market Entry
Fastcleaners vs
Newcleaners |
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Definition
new should enter
and
Fast should accomedate |
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| External Environment of the Organization |
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Definition
Macro Encironment
Industry Environment
Strategic Group |
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Definition
Political
Economic
Sociocultural
Technological
Environmental
Legal |
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Definition
Variation-selection-retention
Imprinting
Inertia
Niche-width and density dependence |
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Definition
| Institutions: cultural-cognitive, normative, and regulative elements that provide stability and meaning to social life |
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Definition
Reduced competition
Higher entry barriers
Stronger vertical position |
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Definition
Threat of New Entrants
Supplier Power
Degree of Rivalry
Buyer Power
Threat of Substitutes
Complementors |
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Term
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Definition
-Economies of Scale (+)
- Customer Loyalty (+)
- Capital Requirement (+)
- Switching Costs of Buyers (+)
- Access to Distribution Channels (-)
- Government Policies (+/-) |
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| Bargaining Power of Suppliers decrease as |
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Definition
| Industry firms are a significant customer for the supplier group |
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Term
| rivalry among firms decrease as |
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Definition
few industry firms with uneaqual resources
Rate of industry growth increases
Low fixed costs and low storage costs
High differentiation and high switching cost
Low barriers to exit |
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Definition
product differentiation
Localized competion |
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Term
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Definition
Few Firms
Strategic Interdependence
Profit determined by behavior
Example Automonilies |
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Definition
One/Few large firms
More small firms
Pricing leadership
Example PC operating systems |
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| 4 Industry Life Cycle stages |
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Definition
1.Embryonic
2.Growing
3. Mature
4.In decline |
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| Does Industry Matter? Yes/No |
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Definition
| Usually NO the company strategy is more important |
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| 2 sources of competitive Advantage |
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Definition
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| skill at using its resources to create goods and services, which enables it to perform certain functions better than its rivals |
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Resource-Based View of the firm
(RBV) |
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Definition
| The distincitve, costly-to-copy resources controlled by a firm may give a firm a competitive advantage |
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Definition
1.Resource Heterogeneity
2. Resource immobility |
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Definition
| Firms can be thought of as bundles of productive resources |
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Definition
| Resources are either very costly to copy or inelastic in supply |
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Definition
1.Technology(patents, copyrights,trade secrets)
2.Reputation
3.Culture |
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Definition
1.Skills/know-how
2.Capacity for communication/collaboration
3.Motivation |
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| The VRINE Model for identifing core competencies |
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Definition
is it VALUABLE
is it RARE
is it INIMITABLE
is it EXPLOITABLE |
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Definition
| A firms ability to modify, reconfigure and upgrade resources to respond to or generate environmental changes. |
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| 2 main classes of problems |
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Definition
Coordination problem
Incentive Problem |
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Definition
| challengen of desigining an optimal organization |
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Term
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Definition
| inducing people whose private goals might diverge from the firms's to take actions that are consistent with the firms goals |
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Definition
Architecture
Routines
Culture |
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Definition
| how a firm is divided into subunits |
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| accepted methods for doing things |
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| commonly held values and beliefs within the firm |
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Term
Value Chain Analysis
2 types of activities |
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Definition
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Term
Value Chain Analysis
Support |
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Definition
Firm Infrastructure
Human Resource MGMT
Tech Development
Procurement |
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Term
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Definition
Inbound Logistics
Operations
Outbound Logistics
Marketing & Sales
Service |
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Term
| 4 steps to Activity Analysis |
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Definition
1.Catalogue activites using the value chain
2.Use activites to analyze relative costs
3.Use activites to analyze relative willingness to pay
4.Explore otions make choices |
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Term
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Definition
Reduce
Eliminate
Create/Add
Raise |
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