Term
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Definition
| Plans to achieve organizational goals |
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Term
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Definition
([Revenues-Exp)/revenues] * revenues/investments = ROI
Simply: profit/investment |
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Term
| Satisfactory profit rather than maximizing profit. why? (2) |
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Definition
1. maximizing implies there is a way of finding the max amt a company can ear. management rarely identifies ALL possible strategies.
2. Maximizing profit is not the only goal, must also behave ethically. |
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Term
| Multiple Stakeholder Approach (3) |
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Definition
1. Capital market: where a firm raises funds, public stockholders are important.
2. Product market: where a firm sells its goods and services. Customers are important.
3. Factor market: where a frm competes for resources such as human capital and raw materials. Employees, stakeholders and communities. |
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Term
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Definition
| shareholders, customers, employees, suppliers and communities. |
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Term
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Definition
| Describes the general direction in which an organization plans to move to attain its goals. |
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Term
| How do you develop strategies? |
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Definition
| match core competencies with industry opportunities. Environmental: identify opportunities and threats. Internal: CC. |
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Term
| 2 levels of strategy development |
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Definition
1. Strategies for the whole org.
2. Strategies for business units within the organization. |
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Term
| 1. Strategies for the whole organization (2 questions) |
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Definition
1. Are we in the right mix of industries?
2. What industries of sub-industries should we be in? |
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Term
| 2. Strategies for business units within the organization. (2 questions) |
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Definition
1. What should be the mission of the business unit?
2. How should the business unit compete to realize its mission? |
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Term
| Corporate level strategies (3) |
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Definition
1. Single industry
2. Related diversified
3. Unrelated diversified |
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Term
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Definition
| one line of business. grow by using CC within. Ex. McDonalds/Exxon Mobil |
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Term
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Definition
| operate in several industries and the business units benefit from sharing CC. Take one CC and use it in another area. Ex. P&G, Kimberly Clark. |
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Term
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Definition
| operates in businesses that are not related to one another. Purely financial connection. Grow through acquisitions. Conglomerates. Ex: textron |
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Term
| Rank the 3 on performance (best to worst) |
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Definition
1. Related diversified
2. Single industry
3. Unrelated diversified |
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Term
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Definition
| Mission and competitive advantage. Mission - low cost and differentiation. |
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Term
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Definition
| objective of increased market share. BCG-question mark. |
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Term
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Definition
| protection of market share and competitive position. BCG-Star. Already have high market share, self sufficient. |
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Term
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Definition
| maximizing s/t earnings and c/f, at the expense of market share. BCG-Cash cow - operate in low-growth or declining markets |
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Term
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Definition
| a decision to withdraw. BCG-Dog |
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Term
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Definition
| cost per unit decreases predictably with the number of units produced over time. |
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Term
| Limitations of the experience curve (5) |
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Definition
1. undifferentiated products
2. technological improvements may have a greater impact
3. can lead to loss of flexibility in the market
4. can hurt if new technologies emerge
5. experience is not the only cost driver |
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Term
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Definition
| average industry profitability is the most significant predictor of firm performance. |
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Term
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Definition
1. Intensity of rivalry among existing competitors
2. Bargaining power of customers
3. Bargaining power of suppliers
4. Threat of substitutes
5. Threat of new entry |
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Term
| 2 ways of responding to opportunities and developing a sustainable advantage |
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Definition
1. Low cost - economies of scale
2. Differentiation - creating something that is perceived as being unique. |
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Term
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Definition
| providing better customer value for an equivalent cost or equivalent customer value for a lower cost |
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