Last Final Ever :)

Invention

Discovery of new ideas/products

Innovation

The commercialization of invention

The Innovation Process

Idea, Invention, Innovation, Imitation

Strategic Entrepreneurship

The pursuit of innovation using tools & concepts from strategic management

5 Phases of an Industry Lifecycle

Introduction, Growth, Shakeout, Maturity, Decline

Product Innovation

Represents a new way of solving a problem a high number of consumers have

4 Strategic options when in decline

Exit, Harvest, Maintain, Consolidate

Incremental Innovation

Steady improvement of a product or service

Radical Innovation

Novel methods or materials serving new markets

Organizational Intertia

A firms resistance to change the status quo

Architectual Innovation

Leverages existing technology into new markets

Disruptive Innovation

Leverages new technologies in esiting markets

_________ refers to the decisions & actions taken to gain & sustain competitive advantage in several industries and markets simultaneously

Corporate level strategy

3 Dimensions of where to compete

Industry value chain, Products and services, Geogrpahy

If cost in hous < cost market, then ________

Vertically integrate

Vertical Value Chain

The transformation of raw materials into finished goods and services along distinct vertical stages

Backward Vertical Integration

Moving ownership of activities upstream to the originating inputs of the value chain

Forward Vertical Integration

Moving ownership of activities closer to the end customer

Taper Integration

Involves either Backward integrtion and relying of others for supplies or Forward integration and relying on others for distribution

Strategic Outsourcing

Moving one or more internal value chain activities outside the firm’s boundaries to other firms in the industry value chain

4 Main types of Business Diversification

Single business (>95%), Dominant business (70 - 90%), Related diversification (<70%), and Unrelated diversification (<70%)

Does corporate diversification indeed lead to superior performance?

Yes

Question Mark

High growth rate, Low market share

Dog

Low market growth, Low market share

Stars

High market share, Low market growth

Cash Cow

High market growth, High market share

Merger

Combining two companies

Acquisition

Purchase or takeover a company

Hostile takeover defense

Poison Pill (Sharholder rights plan)

Horizontal Integration

Merging with competitiors

_____ of M and A deals did not boost sharholder returns

83%

Managerial Hubris

A form of self-delusion

Non-equity Alliances

Partnership based on contracts

Equity Alliances

One partner takes partical ownership in the other

Joint ventures

A standalone organization created and jointly owner by two or more parent companies

Explicit knowledge

Data, information, documents

Tacit Knowledge

Experience, thinking, competence

Alliance Management Capability Steps

1. Partner selection and Alliance formation

2. Alliance Design and Governance

3. Post-Formation Alliance Management

Organizational Design

Structure, Culture, Control

Strategy implementation is often referred to as the _______ strategy

Graveyard

Pattern of a firm

1. Mastery of current environment

2. Success

3. Structure, metrics, and systmes to accomodate and manage size

4. Organizational intertia

4 Building Blocks to Org. Structure

Specialization, Formalization, Centralization, Hierarchy

Mechanistic

High degree of specilization and formalization

Organic

Low degree of specilaization and formalization

Types of Organizational Structure

Simple, Functional, Multidivisional (M-form), Matrix

Organizational Culture

The collectively, shared values and norms of an organization’s members

Values

Define what is considered important

Norms

Define appropriate employee attitudes and behaviors

Where do organizational cultures come from?

Founder imprinting

Input controls

Seek to define & direct employee behavior through explicity, codified rules

Output controls

Seek to guide employee behavior by defining expected results but leaving the mean to those results open to individual employees of SBUs

Extrinsic motivation

Motivated to perform an activity to earn a reward or avoided punishment

Intrinsic motivation

Motivation to perform an activity for its own sake and personal rewards

The demnad for video recorder has drastically reduced, and there are only a few consumer electronics companies selling them at extremely low prices. Also, the current buyer of video recorders are mainly categoriezed as laggard. Which of the following stages of the industry life cycle is the video recorder industry in currently?

Decline stage

________ is a theory that refers to a concept, product, or service that creates a new value network either by entering an existing market or by creating a completely new market.

Disruptive innovation

An innovation that squarely builds on the firm’s established knowledge base, steadily improves the product or service it offers and targets existing markets by using existing technology is known as _______

Incremental Innovation

When Citizen, an older electronics firm, developed one of the world’s earliest had held televisions, they reconfigured existing technology in a novel way to attack a new market. This is an example of:

Architectural Innovation

Although Grandpa Electronics Inc. still sells its VCR players, a product in its decline stage, the investments made by the company on improving or marketing the product are very low. The company has allocated the least amount of human and financial capital to this department. Which of the following strategies has Grandpa Electronics Inc. adopted in this scenario

Harvest Strategy

________ are best described as a voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services to lead to competitive advantage.

Strategic Alliances

Bada LLC and Bing LLC have together invested and created a new organization, Bada Bing LLC., to focus on developing medical diagnostics devices. Through this new firm, both companies are attempting to combine their core competencies to innovate and reduce their risks associated with transaction-specific investments. However, the new organization operates independnent of Bada LLC and Bing LLC. Which of thw following alternatives to integration does thie scenario best illustrate?

A Joint Venture

Transaction cost economics helps managers decide what activities to do in-house versus what services and product to obtain from the external market. Having been trained at ASI, you immediately recognize that this corporate level stragey statement as:

the “make vs. buy” decision

ASI Electronics Inc. sources tough screens required for its tablet computers, cell phones, and televisions from a manufacturer in China. But the demand for such components was high globally. Thus, ASI Electronics decided to set up its own unit to develop and manufacture the required tough screens. What does this sceario best illustrate?

Backward Vertical Integration

TwoWheels Inc., a large conglomerate, procedures a few component bicycle parts from external suppliers and also manufactures some of the key raw materials in its own subsidiaries. TwoWheels Inc. does not soley depend on outside distributors to reach its customers. In fact, it has its own retail stores to distribute its products. In this scenario, which of the following alternatives to vertial integration is Two Wheels Inc. applying?

Taper Integration

You’ve just been hired to review Susan’s corporate level strategy. She’s interested int he concept of forward vertical integration but can’t seem to remember what that entails - she asks you to provide her an example that she can drawn upon. You think for a moment and then respond with:

A firm that manufactures and sells car engines to major automobile companies launches its own line of cars

Horizontal Integration