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WorksheetsStrategic Management SeAMK 2019
Total questions: 41
Worksheet time: 41mins
According to course book strategy is about
Competing
Pattern of resources
Winning
Pattern of behavior
Strategy is to gain competitive advantage over its competitors - who is author of this statement?
Sun Tzu
Kenichi Ohmae
Henry Minzberg
Michael Porter
Strategy is pattern of behavior that emerges over time - who is the author?
Sun Tzu
Henry Minzberg
Michael Porter
Igor Ansoff
Winning a war is to make the enemy believe the opposite of what he thinks you are about to do. Who wrote this?
Sun Tzu
Kenichi Ohmae
W. Chan Kim and Renée Mauborgne
Michael Porter
Vision articulates
way of moving towards mission
resources used
view of what the organization wants to achieve or future what it is aiming for
how to create uncontested market space and make the competition irrelevant
Mission articulates
way of moving towards vision
view of what the organization wants to achieve
big picture of future of organization
measurable outcomes of strategy: sales, profits, share price, consumer satisfaction scores and so on
Strategic objectives are
beliefs or principles
precise measurable outcomes of strategy: sales, profits, share price, customer satisfaction scores and so on
way to move towards vision
generic, undefined and impossible
Organization core values
should change every month, if needed
define short-term future and objectives of organization
should be enduring, even if company external situation changes
define scope of organization activities
Strategy starts with purpose and this purpose will reflect opinions of stakeholders of which the most influential in generally the CEO (Chief Excecutive Officer)
Yes, CEO may listen to some stakeholders than others, like customers, owners, top management or employees
No, strategy starts with action plans and implementing initiatives
What is the most widely used strategic tool?
Five forces analysis
PESTEL analysis
SWOT analysis
VRIO analysis
SWOT-TOWS
The weakness of SWOT analysis is
It is difficult to use
It is new tool
It is only used in public sector
It is not aimed at anything
Strategic purpose consists of
Macro-Shocks and industry forces
Crossing borders and new ventures
Growth, profitability, operational effectiveness, long term investments
Vision, mission, core values, objectives, strategy statements
In strategic management it is important to exclude issues and when needed, end certain initiatives, projects or actions.
Yes, strategy is about excluding and saying, "we will stop this"
No, strategy is about adding new initiatives, methods and projects into current plans workload
When developing strategy for organization, which questions should we ask first?
How we will get there on a daily to weekly basis?
How are our departmental operational plans?
What are our short-term goals and operational objectives? How do we break down a larger strategic goal into workable tasks?
Where do we compete? What unique value do we bring to market? Which resources do we have or need? How do we sustain our value?
Organizational culture
is long term plan how to win, visible and changes fast
consist of values, beliefs, behaviors, paradigm (=stories, rituals, power structures, symbols, control systems)
is theory of competitive advantage
fairly easy to copy and defines, what you do, when everyone sees
Strategic management tools (20 altogether) are
divided into four different categories, according to their purpose of use: creating new, developing resources, improving efficiency and positioning organization (in market)
all used for same purpose: improving efficiency
all used for creating something new
not needed in strategic management
Organizations and their strategy operate in vacuum. They are closed systems that take resources and information from inside organization.
Yes, nowadays firms operate in closed circumstances and they do not need to focus on mega-trends and external environment
No, open system perspective emphasizes disconnectedness of firm and multiple levels of environment
World oil reserves are running out rapidly and will end to be major energy source to this century. This will be huge shock to how firms operate and will require fundamental shifts in organizations' strategy
True, this in one example of macro-shock. For example Honda, Toyota and Tesla are investing huge resources into R&D (=research and development) because of this
False, this is not happening. Not any large firms are taking this into consideration in their strategic planning.
Digital camera inventor Kodak, continued to promote photo film to world, even though there was strong customer trend towards consumers buying digital cameras. This led to collapse or their core organization.
Yes, they failed to promote new technology. Kodak moved too slowly and failed to keep pace with changing environment.
No, digitalization of cameras and film did not affect Kodak. They made fast strategic decisions and let go of historical influences.
The complexity of interaction of organization with its external environment may be decomposed into macro-environmental shocks, industry forces (consumers, suppliers, threat of new entrants, substitutes) and competitive forces (direct competitors).
No, there is only competitive forces that need to be considered
Yes, these are levels of environment
Analysis of strategy and organizational culture changes (Nissan, BIDMC, IBM, Siemens). There is no evidence of companies and organizations that are able distinctly to change their organizational culture and strategy.
True
False
Analysis of strategy and organizational culture changes (Nissan, BIDMC, IBM, Siemens). During the process, based on the cases presented, leaders should delegate decisions and crucial responsibilities. Creation of a communication channel between the president and employees in needed. Through this channel developers could make compliments, complaints and suggest improvements
True
False
What is dolphin tail (or curve) effect in Apple industries?
Conducting diagnosis of previous restructuring plans in order to highlight their shortcomings and interpretations of what went wrong.
Due to the need of decision making and execution of competitive strategy with a lower error rate, managers increasingly seek accurate, complete and relevant information.
Companies in the telecommunications sector are heavily dependent on information technology.
Organisations’ sensitivity to flagging industry sales during the maturity phase may prompt innovation in order to rejuvenate the sector. Apple has constantly rejuvenated
industries with its new innovations.
Industry rivalry benefits customers and consumers but harms industry profitability as marketing/development/etc. costs go up, and/or selling prices come down.
False
True
An organisation with a competitive advantage can create and deliver better benefits to consumers than their competitors and simultaneously earn higher profits than the average of other organisations competing in the same market.
True
False
Michael Porter argues that cost advantage means an organisation offers something of value that is unique or sufficiently better than rivals to be seen as unique. These organisations create a form of monopoly in that nobody else can deliver the same product/service-based value to the
target market.
True
False
Success of Fc Barcelona football team culture cohesiveness and strength can be analyzed with McKinsey & Co. seven Ss. (Strategy, Style, Skills, Staff, Systems, Structure, Shared values). This is an example of resource based advantage and creating competitive advantage through organizational culture.
True
False
What are unicorns in strategic management?
An organisation can do the same things as its rivals but do so at a
lower delivered cost
It is a name that has been adopted by the US venture capital industry to denote a start-up company whose valuation exceeds $1 billion dollars. These organisations have new business models that have led to extremely rapid growth and promise very significant financial returns in the future, reflected in their market valuations of $350bn (Facebook), $30bn (Airbnb) $66bn (Uber).
A metaphor for the transition in organizational value creation from physical assets to the capabilities of employees. Knowledge, skills, and relationships, for example. Closely related to terms such as intellectual capital and intangible assets.
Forward-looking in nature, leading indicators are the drivers of future performance. Improved performance in a leading indicator is assumed to drive better performance in a lagging indicator. For example, spending more time with valued customers
What does mean cutting out the middleman in business models?
Instead of building and operating its own stores to sell its burgers,
McDonald’s, the “franchisor”, licensed other businesses, for an upfront fee, the right to use its brand name, processes and systems. This allowed McDonald’s to cut out a significant expense and so gain advantage over other competitors.
In this business model, a business is able to integrate its stores (bricks) with an online presence (clicks). For instance, bookshops, in response to the incursions of Amazon into the book retail market, now offer customers the opportunity to buy a book online and then pick it up at a local bookshop.
Made famous by the Toyota car company, the just-in-time business model was a radically new approach to the manufacturing process when it was introduced during the 1970s. The system focused upon cutting buffer stocks in each stage of the production process so that parts were only ordered when the process required them. The old system became known as “just-in case”.
This business model focuses on removing a segment of
the value chain, such as wholesalers, distributors, agents. A famous example is Amazon targeting the book retail market, where a large part of the costs in the book value chain was in running bookshops. Amazon therefore cut out bookshops by selling direct to consumers via its website.
Aribnd business model is an example of multi-sided business model. The platform is only valuable to one customer if it is valuable to another. Airbnb’s business model connects travellers looking for low-cost accommodation with people who have accommodation that they want to rent.
True
False
What is balanced scorecard (BSC)?
Obstacles to organisational change that may take psychological, cognitive, social and cultural forms.
A key concept in Porter’s Five Forces of Industry model (see Industry forces).
The ability of an organisation to respond to external changes
Technique for using multiple criteria to assess performance: Financial, Customer, Internal Process, and Employee Learning and Growth
What is blue ocean strategy?
Rare events which are completely unexpected.
A strategy that seeks to move an organisation away from arenas
where competition is fierce (i.e. the red ocean) by doing something that other companies have not considered or cannot compete in.
A colloquial name for the first portfolio analytic matrix, developed
by the Boston Consulting Group (BCG), that led to the popular use of the terms “cash cow”, “star”, “dog” and “question mark”.
A situation where buyers can take advantage of intense competitive rivalry and/or low switching costs and/or their size to seek discounts/better service etc.from a company. Often used in conjunction with the Five Forces of Industry framework.
What is strategic drift?
A term used to describe an organisation that is losing its ability to change sufficiently to remain in fit with its context. This may be due to structural rigidities and boundedness. The implication is loss of performance.
A framework that identifies different strategic directions an organisation might take in order to improve its competitive advantage.
This describes an organisation that is well tuned to its context and able to adjust in the face of changing external pressures.
Distinctive sets of competitors adopting similar strategies aimed at
similar customer segments where intergroup entry barriers (mobility barriers) prevent easy switching from one group to another.
What are strategic stories?
A formalised step-by-step set of procedures for coordinating the
strategy process.
A situation where suppliers can use their competitive advantage to
secure good contracts and/or premium prices from industry competitors (e.g. Intel in computer hardware). Often used in conjunction with the Five Forces of Industry framework.
These may seem to be about small things (e.g. an act of kindness toward a customer) that are seen to encapsulate the core values or spirit that underpin an organisation’s strategy or desired strategy.
A competitive advantage that can be protected and
maintained (or grown) over time because it is difficult for competitors to copy or compete with.
What is hypercompetition?
Based upon the Greek fable of the boy who flew too close to the sun with wings made of wax and subsequently plunged to his death, the paradox is that the greater one’s success the more likely one’s failure.
A method for assigning values to expected pressures from the macro environment in order for an organisation to assess the future nature of its context for which it must design an effective strategy.
When an organisation begins to expand across borders and is
effectively matching its internal strengths with opportunities and challenges in geographically dispersed regions.
Competition characterised by intense and rapid competitive moves
which rapidly erode company advantages and lead to less stable industry structures than before and in which superior profitability is more transitory. The only route to superior performance is through continually recreating and renewing competitive advantage.
As the name suggests, this business model focuses on removing a segment of the value chain, such as wholesalers, distributors, agents. A famous example is Amazon targeting the book retail market, where a large part of the costs in the book value chain was in running bookshops.
Franchising
Bricks and clicks
Just-in-time
Cutting out the middleman
In this business model, a business is able to integrate its stores with an online presence. For instance, bookshops, in response to the incursions of Amazon into the book retail market, now offer customers the opportunity to buy
a book online and then pick it up at a local bookshop.
Franchising
Bricks and clicks
Razor-blade
Freemium
This is where organisations will sponsor a high visibility activity in order that large viewing audiences will then see who has supported the event. For instance, Formula 1 is one of the most highly viewed activities in the world, with viewing figures in excess of 500 million per year.
Freemium
Razor-blade
Sponsorship
Pay what you want/can
The important point about network effects is that for every additional user of a product or service, the more valuable that product or service becomes. For instance, the more people who own mobile phones in a network, the greater the benefit to other users. Uber has used a network effect with great success as with every additional car available for hire, the greater is the demand for travellers and vice versa.
Just-in-time
Razor-blade
Network effect
Pay what you want/can
Strategy that seeks to move an organisation away from arenas where competition is fierce and aggressive by doing something that other companies have not considered or cannot compete in.
Boston Box (Boston Consulting Group matrix)
VRIO analysis
Scenario thinking
Blue ocean
A structured process of thinking about and anticipating the unknowable future, without pretence of being able to predict the future or being able to influence the environment in a major way. “It is a discipline for rediscovering the original entrepreneurial power of creative foresight” (Pierre Wack).
Scenario thinking
VRIO Stands for Valuable, Rare, Inimitable and supported Organisationally.
TOWS
Balanced Scorecard (BSC)
