BUSI 4940 Exam 1 Study

What are the Five Sections, when trying to Define Strategy?

1. Strategic Management

2. Strategic Planning

3. Strategic Plan

4. Realized Strategy

5. Business Model

In the US, its common for one person to serve all three roles of Chairman, CEO, and President. T/F

True, think small business owners and how sometimes it is only person running their business.

What is General Environment?

Factors in the external environment that can affect the company, but the company can’t really directly affect them back

I can touch you but you can’t touch me back- Decisions made by my suppliers can affect my business but business decisions I make don't necessarily affect my suppliers

What is Industry Environment?

Factors that directly affect the company, but the company can have a significant effect back on them as well

Who was the Father of Strategic Planning?

Referred to as the father of strategic planning bcs he was one of the first people to define an approach to and need for organizational planning

Igor Ansoff

Who is Michael Porter?

Popularized Modern Competitive Strategy Theory and Created 5 Forces Model

Who is Jay Barney?

Father of Resource Based Theory

His framework has become a foundational tool for helping to asses how companies can develop sustainable advantages in the market

Whose the Father of Modern Management Theory?

Henri Fayoi, His 14 principles of management include principles that are sound even in today’s world

Whose Philip Selznick?

He wrote “Foundation’s of the Theory of Organization” so think Organizational Level Theory

What is the Strategic “Planning” Process?

Starts with…

1. Strategic Intent

2. Analysis

3. Formulation

4. Implementation/Launch

5. Measurement Evaluation

6. Control

and then circles back around again

In the Strategic Planning Process, what is Strategic Intent ?

Shows the Mission, Vision, and Planning Objectives

In the Strategic Planning, what is Control?

Governance, Feedback, and Knowledge Sharing

What’s Technology Diffusion?

The speed at which new technologies become available to firmsAND when firms and customers choose to adopt them (e.g., Adoption of telephones – 35years to access 25% of the U.S., versus 7 years to reach 25% for the internet)

What’s Globalization?

Is the increasing economic interdependence among countries and their organizations as reflected in the flow of products, financial capital, and knowledge across country boundaries

What’s the term for…

Describes how rapidly and consistently new, information- intensive technologies replace older ones (Somewhat unique to information-intensive technologies – Moore’s Law for transistors [chips], information storage [disks], connection tech [Wifi,cellular], etc.)

• How quickly and regularly new tech keeps replacing old tech. For example, new types of computer chips, storage devices, and wireless tech are always coming out and making older versions outdated.

Perpetual Innovation

What’s Disruptive Innovation?

New technologies that destroy the value of an existing technology and create new markets

Example: The rise of streaming services like Netflix, which disrupted traditional cable TV providers by offering a cheaper and more convenient way to watch content.

What does PEST stand for?

Political/Legal

Economic

Sociocultural

Technological

In PEST/DEG, what does the S mean and stand for?

Sociocultural, which means The sociocultural segment is concerned with a society’s attitudes and cultural values.

Who primary scholar associated with I/O Economics from a strategy perspective?

Michael Porter

Popularized Modern Competitive Strategy Theory; Created 5 Forces Model

- Who is the primary scholar associated with the Resource Based View?

Jay Barney

What’s competitor analysis?

firms gather and interpret information about their competitors

What’s Political/legal Segment?

political/legal segment is the arena in which organizations and interest groups compete for attention, resources, and a voice in overseeing the body of laws and regulations guiding interactions among nations as well as between firms and various local governmental agencies.

Who is the highest-ranking executive at a typical publicly traded company?

CEO, Chief Executive Officer

What are Positive-Sum games?

Also known as Synergy and “win win” scenario in which both organizations are better off

• Ex: A tech company partners with a hospital— the tech company improves its software using hospital data, and the hospital uses the software to improve patient care. Both win

What does Dysergy mean?

Dysergy is a “lose lose” situation when both of the organizations are worse off

Ex: Two companies, a software firm and a hardware manufacturer, merge to offer new products. However, instead of improving, they have communication issues, conflicting goals, and cultural clashes. As a result:

Both companies perform worse together than they did separately, losing time, money, and market position.

In the 5 concept part of organizational strategy, what is the Realized Strategy?

The course of action that an organization actually pursues, whether planned or reactive.

What is a vision statement?

The largest overachieving goals of the company and timeframe targets

It should answer the questions- What comapany levels do we want to accomplish the future and by when

What’s a Mission Statement, and what characteristics does it have?

Answers the question, “Why does the company exist” by by specifying the business(es) it intends to compete in and the customers it intends to serve, but that’s about all it’s supposed to do.

What is a Black Swan event?

Events that are “oh crap” events because the probability of that event happening is so so small that you don’t generally plan for it.

Ex: Covid pandemic was something no one saw coming and that no one was really prepared for.

When Defining Strategy, what is the Strategic Plan?

The document itself and what houses the research milestone, resources allocations, scenarios, and intended game plan of the executive team and bond

What does Zero Sum mean?

It’s proportional or a win-lose situation in which one organization is better off and one is worse off

What are above average returns?

Returns in excess of what an investor expects to earn from other investments with similar amount of risk

• For example, if two stocks are equally risky but one earns 10% and the other 5%, the 10% stock provides above average returns.

What is Risk?

an investor’s uncertainty about the economic gains or losses that will result from a particular investment.

• The most successful companies learn how to manage risk effectively; doing so reduces investors’ uncertainty about the outcomes of their investments.

What are average returns?

Average returns are returns equal to those an investor expects to earn from other investments possessing a similar amount of risk. Over time, an inability to earn at least average returns results first in decline and, eventually, failure

What are barriers to entry?