Strategy Flashcards

What is the definition of strategy accroding to the Book?

Long-term direction of an organisation

What is chandler’s definition of strategy?

Setting long-term goalsm deciding how to achieve them and allocating resources accordingly.

What is porter’s definition of strategy?

Doing things differently to offer a unique value to customers.

What is the Three Horizons Framework?

A framework that structures strategic planning across three time horizons.

Three Horizons Framework — what is Horizon 1 (short-term)?

Defend and grow the current core business.

Three Horizons Framework — what is Horizon 2 (medium-term)?

Develop emerging areas of business.

Three Horizons Framework — what is Horizon 3 (long-term)?

Create new, future-oriented opportunities.

What does "strategy as planning" involve?

Structured, long-term planning that balances short-term operations with long-term innovation.

What are the Three different views of strategy?

Strategy as planning, Strategy as competition, Strategy as differentiation.

What is the focus of "strategy as competition"?

Beating rivals and gaining market share.

Why is strategy as competition often described as zero-sum?

Because one company's gain is treated as another company's loss.

What's the danger of over-focusing on competitors?

You may ignore customer value or shrink the total market rather than grow it.

What is the blue ocean strategy

A business concept that focuses on creating entirely new market spaces (Blue Oceans) rather than fighting aggressively in crowded, existing markets (Red Oceans).

According to "strategy as differentiation," what does long-term success require?

Uniqueness, not imitation.

Why does differentiation require trade-offs?

A firm can't do everything, so it must focus on what makes it distinct (choosing what not to do).

What are the three levels of strategy in an organization?

Corporate-level, Business-level, Operational-level

Corporate-level strategy answers what core question?

What industries/markets should we be in?

Business-level strategy answers what core question?

How can a business compete effectively in its market?

Operational-level strategy answers what core question?

How do functional areas (e.g. marketing) implement strategies?

List the five elements a clear strategy statement answers (Collis & Rukstad).

Mission, Vision, Objectives, Scope, Advantage.

Collis & Rukstad — what does Mission capture?

What business are we in.

Collis & Rukstad — what does Vision capture?

What we want to achieve in the future.

Collis & Rukstad — what does Objectives capture?

Short-term measurable goals.

Collis & Rukstad — what does Scope define?

Customers, geography, and internal activities (where the firm competes).

Collis & Rukstad — what does Advantage capture?

Our competitive edge (why customers choose us over rivals).

Exploring Strategy model — what does the Strategic position branch cover, and which dimension is it?

Context. How the external environment, internal capabilities, goals, and culture shape strategy.

Exploring Strategy model — what does the Strategic choices branch cover, and which dimension is it?

Content. What directions and methods the organization can pursue.

Exploring Strategy model — what does the Strategy in action branch cover, and which dimension is it?

Process. How strategy is formed and implemented.

Name the three branches of the Exploring Strategy model with their dimensions.

Strategic position (context), Strategic choices (content), Strategy in action (process).

Name the four strategic lenses.

Design, Experience, Variety, Discourse.

Strategic lenses — what is the Discourse lens?

Strategy as language, power, and communication.

Strategic lenses — what is the Variety lens?

Strategy emerging through bottom-up innovation.

Strategic lenses — what is the Experience lens?

Strategy shaped by past experiences and routines.

Strategic lenses — what is the Design lens?

Strategy as rational planning — systematic and top-down.

Strategy in conxtexts- What is the key focus of a small business

External environment, clear purpose

Strategy in contexts - What is the key focus of multinationals

Global positioning and complexity

Strategy in contexts - What is the key focus of public/non profit

Purpose and ligitimacy, not just competition.

What is a Market segment?

A group of customers with similar needs.

What are strategic groups?

Firms in the same industry with similar strategies

Where does PESTEL stand for.

Political, economic, stocial, technological, ecological, legal.

What is PESTEL used for?

It is a checklist tool used to analyze and organization’s broad macro-environment. It acts as a checklist to identify key drivers of change, covering both market and non-market forces, and typically feeds into a SWOT analysis.

What are Megatrends?

Large scale changes in the PESTEL.

What are inflection points?

Major turning points in trends.

What are Weak signals.

Early indicators of possible future trends.

What is Poter’s five forces used for?

Used to assess industry attractiveness and competition.

What are the Five forces?

Threat of new entrants, Power of suppliers, Power of buyers, Threat of substitutes, Rivalry among competitors.

How can the power of suppliers increase?

Fewer suppliers, High switching costs, No substitutes, Suppliers who can integrate forward

How can the power of buyers increase?

Few large buyers, easy to switch, large cost for buyer, little quality impact.

When is the Threat of substitues high?

Better price-performance ratio, Easy and cheap to switch

When is the rivalry among competitors high?

If there are many equally sized rivals, slow industry growth, high exit barriers, firms can’t predict each other, price competition.

What is a value chain?

Internal activities creating value. (operations, marketing, support)

What is a value system?

Inter organisational links (suppliers, distributors) forming end-to-end value creation.

What is the industry life cycle?

Industries progress through five stages development, growth, shake-out, maturity, decline.

What are business ecosystmes?

Interconnected networks of organisations in a sector that co-create value.

What are complementors?

Companies that add value to others. (software for hardware)

What are the four type of industries talked about in the book?

Monopoly, Oligopoly, Perfect competition, hypercompetition.

What is a monopoly?

An type of industry with one dominant player.

What is a oligopoly?

An type of industry with few large firms. (Airline industry)

What is a industry with perfect competition?

An type of industry with many equal players.

What is hypercompetition?

An type of industry with constant, rapid change.

What is the value network model?

Firms, suppliers, and buyers create value together in a network, then compete over value capture based on each player's bargaining power from having alternative partners.

What are the four strategic positioning approaches?

Cost leadership, Differentiation, Hybrid strategy, Focus strategy.

What does it mean to have a cost leadership strategic positioning approach and what are key features?

Be the lowest-cost producer. Lower imput cost, Vertical integration, economies of scale.

What does it mean to have a differentiation strategic positioning approach and what are key features?

Offer unique value to customers. Focussing on the strategic customer, identify a niche and stand out, provide features customers value highly.

What does it mean to have a hybrid strategic positioning approach and what are key features?

Combine cost efficiency and benefits. Lower prices than typical differentiation strategies, higher benefits that standard low-cost strategies, aiming to deliver high customer value.

What does it mean to have a focus strategic positioning approach and what are key features?

Targeting a specific market segment. Server a group with distinct needs, build a specialised value chain, ensure the segment is economically viable.

What is a VRIO framework?

Evaluates if resources/capabilities drive sustained competitive advantage across four criteria: Valuable (customer value/opportunity), Rare (unique/few possess), Inimitable (costly to copy), Organisationally Supported (systems & stakeholders to exploit them).

What is benchmarking?

Comparing an organisation's performance/capabilities against competitors (industry benchmarking) or best performers across industries (best-in-class); helps identify performance gaps but only achieves competitive parity, not advantage.

What are the different types of capabilities?

Threshold, Distinctive, Dynamic, Core competences

What is a Threshold capability?

A basic requirment for business.

What is a distinctive capability?

A unique and hard to copy capability.

What is a the steps for dynamic capabilities?

Sensing → Seizing → Reconfiguring,

What is a SWOT analysis?

It is a analysis that looks at Strengths, Weaknesses (internal), Opportunities, Threaths (external)

What is a TOWS analysis?

TOWS analysis is a matrix that transforms SWOT findings into strategic options by matching strengths/weaknesses against opportunities/threats to identify concrete actions.

What is a Organisational purpose?

The core goal an organisation wants to achieve, based on the values and interests of stakeholders.

What is agency theory? (Eisenhardt, 1989)

How to align the interests of the principal (owner) and agent (manager).

What is corporate governance?

Making sure managment works in the interest of the company and its stakeholders.

What is Corporate Social Responsibility? (CSR)

A self regulating business model where companies act responsibly towards people, planet and profit.

What is Lassez-faire?

Laissez-faire is a business stance that organisations should operate freely with only the responsibility to make profit for shareholders, with no social duties beyond legal requirements.

What is Enlightend self interest?

Enlightened self-interest justifies corporate social responsibility as making good long-term business sense—inspiring employees, building stakeholder coalitions, and rewarding shareholders—without requiring sacrifice of profit.

What is Forum approach

Is a CSR approach that balances, people, planet, profit.

What is Shapers of Society approach.

Social mission is primary.

Who are part of the board of directors?

Executive directors, non-executive directors, chair, committees.

What are executive directors?

They are directors that are also part of managment.

What are non-executive directors?

Directors that are not part of managment they only monitor.

What is a chair?

They are the leader of the board.

What is the C-suite?

CEO, COO, CFO

What does the CEO do?

Overall leader, strategy

What does the COO do?

They are responsible for the Daily operations.

What does the CFO do?

Finances and reporting.

What is Upper echelon theory.

Managers backgrounds and personal characteristics influence the decisions they make for a company.

What is the goal of a firm according to Friedman? (Shareholder model)

Maximize profits for shareholders.

What is the goal of a firm according to Freedman? (Stakeholder model)

Any group or individual who can affect or is affected by the achievement of the organisation’s objectives (employees, customer, community, suppliers,

shareholders).

What is Stakeholder mapping? Define the four type of stakeholders?

Defining interest & influence of stakeholders on a Chart.

Key players - high interest & influence (Top right)

Sleeping giants - high interest, low influence (Top left)

Gadflies - low interest, high influence (Bottom right)

Crowd - low interest, influence (Bottom left)

What is Greenwashing?

Pretending to be eco-friendly without real action.

What are the three Growth strategies?

Organic growth, Mergers & acquisition, Strategic alliences.

What is the Organic growth strategy.

A growth strategy where you control everything, slow growth.

What is a Meger & Acquisition growth strategy?

A growth strategy where you buy assets, markets, competitors. Fast growth, high risk, cultural clashes.

What is a Strategic alliances growth strategy?

Partnering with outher firms without merging, share resources or knowledge.

What are the different styles of integration?

Absorption, Preservation, symbiosis, intensive