GMS 200 Final Exam Notes

competitive advantage

what you do that gives you an edge: cost of production, access to resources, even gov. policy (provides license to monopolize)

sustainable competitive advantage

an approach that is different for competitors to replicate

strategy

something that will provide a competitive advantage

what are characterisitcs of an oligopolu

• few players directly competing against each other

• long term competitive advantage in defined market segment

what are characteristics of hypercompetition

• several players directly competing

• competitive advantage is temporary

strategy formulation

the process of creating a strategy; assessing existing strategies, organization, and environment to develop new strategies and strategic plans capable of delivering future competitive advantage.

strategic questions for strategy formulation

• what is the business mission?

• who are our customers?

• what do customers consider value?

• what have been our results?

• what is our plan?

what is a mission statement

• identifies customers, products/services, location and underlying philosophy

• explains why the business exists

who are the 2 players when it comes to electric vehicle charging

• flo

• sun country highway

who will battery makers replace?

oil giants

how have lithium batteries grown in popularity?

R&D has resulted in a decrease in the cost of battery production

what does one need to take into account to assess their macro environment?

• technology

• government

• social/demographic structures

• global economy

• natural environment

what does one need to take into account to assess their industry environment?

• resource suppliers

• competitors

• customers

what are web based business models

• brokerage models

• advertising model

• merchant model

• subscription model

• infomediary model

• community model

characteristics of a competitive advantage

• cost + quality

• knowledge and speed

• barriers to entry

• financial resources

what are porter’s generic strategies

focuses on scope and competitive advantages depending on cost and differentiation; differentiations strategy, cost leadership, focused cost leadership, and focused differentiation

portfolio planning approach

a way to evaluate and manage different products or investments to make the best use of resources and align with the company's goals.

BCG Matrix

A strategic framework used to evaluate business units or product lines based on their market growth and market share, categorizing them into four quadrants: Stars, Cash Cows, Question Marks, and Dogs.

types of adaptive strategies

• prospector strategy

• defender strategy

• analyzer strategy

• reactor strategy

prospector strategy

pursuing innovation in face of risk for growth

defender strategy

protecting market share by emphasizing products without seeking growth

analyzer strategy

maintaining existing operations and keeping efficiency, adopt successful innovations from competitors

reactor strategy

merely responding to competition to keep afloat

failure of substance

inadequate attention to major strategic planning elements

failure of process

lack of participation, goal displacement error

critical tasks of strategic leadership

• guardian of trade-offs

• create a sense of urgency

• everyone understands strategy

• teacher / be inspiring

• be a great communicator

corporate strategy

what busiinesses are we in

business strategy

how do we compete in each of our major businesses

functional strategy

how do we best support each of our business strategies; finance, hr, marketing

types of growth strategies

concentration strategy, diversification strategies

what is vertical integration

owning the supply chain

retrenchment

the reduction of costs or spending in response to economic difficulty

what are key activities in retrenchment

• correcting weaknesses of operations

• liquidation

• restructure

• downsizing/rightsizing

• divesting - moving resources from businesses

multidomestic strategy

polycentrism (adapting product), for instance, nestle

transnational strategy

standardized but try to incorporate some local values, mcdonalds, balance efficiencies in global operations and responsiveness to local markets

what are the 2 sources of managerial power

• position power - power based on authority and hierarchy

• personal power - based on other’s perception

what are the 3 position powers?

• reward power - reward of x if y

• coercive power - if no x i will punish you

• legitimate power - bcs i am boss

what are the 2 personal powers?

• expert power - a source of special knowledge

• referent power - others likely to identify with this

blake and moutons leadership

a grid representing an x axis of concern for production and y axis for concern for people, with numbers on each axis indicating appropriate concerns. helps leaders understand their own leadership style and improve.

what are the 3 classic leadership styles

• autocratic - tasks over pppl, authority, control, keeps information, acts in a uniletal command-and-control fashion

• laissez-faire - little concern, lets group make decisions, do the best you can, don’t bother me

• democratic - sharing information, encouraging, helping

what does fidler’s contingency model demonstrate?

good leadership depends on match between leadership and situational demand, there's an understanding that good leadership is dependent on personality

what does the hershey-blanchard situational leadership model show

a leadership theory that suggests there is no single "best" style of leadership. Instead, effective leadership depends on the readiness or maturity level of the team being led.

what are the 4 types of leadership styles the hershey blanchard model proposes

• telling - high task focus, low relationship focus; specific instructions + supervision, for low competence and committed

• selling - high task focus, high relationship focus; direction, supportive, engaged behaviour. low commitment and competence

• participating - low task focus, high relationship focus; share decision-making, relationship building, for high competence low commitment

• delegating - low task focus, low relationship focus; minimal guidance, for high competence high commitment

what is house’s path goal leadership theory?

effective leadership deals with the paths through which followers can achieve goals, leaders adapt their style to needs of employees. leadership influences employee satisfaction, motivation, and performance

what is the vroom-jago leader-participation theory?

decision-making tool that helps leaders select the best approach to making decisions in a given situation; depends on nature of problem/situation to decide how to lead

what are characteristics of transformational leaders?

• vision

• charisma

• symbolism

• empowerment

• intellectual stimulation

• integrity

what are characteristics of entrepreneurship?

• internal locus of control; contingence, whatever you do is beyond you

• high energy level

• need for achievement

• self-confidence

• tolerance for ambiguity

• passion and action-oriented

• self-reliance

• flexible

what is personal agency belief?

it is entrepreneurship! which consists of self efficacy * locus of control

what is the typical background of entrepreneurs?

• parents were entrepreneurship or self-employed

• families encouraged responsibility, initiative, and independence

• have tried more than one business venture

• relevant career/personal experience

• strong interests in creative production and enterprise control

• seek independence and sense of mastery

kirner’s theory of entrepreneurship

no such thing as equilibrium, BUT we have equilibrium tendencies, when you discover opportunities > arbitrage (selling stuff cheap for high), you don’t need money to be an entrepreneurship you need to have an idea, entrepreneurship is error correction

schumpeter theory of entrepreneurship

entrepreneurship process is about creating and destructing,

harper’s cornerstone hypothesis

the value of focusing on critical, interconnected components rather than viewing a system’s parts as equally influential

baumd’s theories on entrepreneurship

there is such thing as productive and unproductive entrepreneurship, societies can make ppl unproductive bcs that is how they make money > need some ppl with the low paying jobs not innovating

facts about entrepreneurs

• entrepreneurs are made not born

• entrepreneurs take calculated risks they are not gamblers

• ideas > money

• you don’t need to be young

• you don’t need a degree

characteristics of a small business

• <100 employees

• independently owned + operated

• 50% of labour force works in small businesses

• entrepreneurship + the internet

• intl. business entrepreneurship

• family business

reasons for failure of small bsuinesses

• no leadership

• poor planning

• unexpected accelerated growth

• bad strategy

• ethical failure > quantity over quality

• insufficient commitment

• no experience

life cycle of a venture

• birth - establishment, getting customers, finding money; fighting for survival

• breakthrough - working on finances, becoming profitable, growth; coping with growth

• maturity - refining strategy, continuing growth, managing success; investing and staying flexible

forms of legal ownership

• sole proprietorship

• partnership

• corporation

• LLC

• PLC

general partnership

equal liability and rights to decision process

limited partnership

different roles in management, proportionate to investment, different limits of liability

limited liability partnership

provides limited liability to all partners; protection

financing ventures

debt financing, equity financing, venture capitalists, initial public offerings, angel investors

debt financing

borrowing money, loans, pay back regardless of financial performance

equity financing

typical investment, take equity of business and receive dividends which can be diluted, no obligation to pay dividends

venture capitalist

big private equity investment focusing on start-ups/small companies with long term

initial public offerings

organization enters stock exchange

angel investors

well-off individuals who invest in small companies

promoting entrepreneurship in large corporations

• intrapreneurship

• skunkworks - a group within an organization given a high degree of autonomy and unhampered by bureaucracy, with the task of working on advanced or secret projects

promoting entrepreneurship

business incubators, small business development centers

functional structures

• similar skills + tasks grouped together

• ppl work in areas of expertise

• not limited to business

• works well from smaller organizations

divisional structures

• groups of ppl who have the same tasks, customers, location

• common in complex organizations

• avoids problems encountered with functional structures

matrix structure

combines functional and divisional

horizontal structures

• organization focus on processes not functions

• ppl in charge of core processes

• more teams less hierarchy

• empowerment to increase performance

• use IT

• multiskilling and multi competencies

• openness, collaboration, performance commitment

boundaryless organizational structure

• a combination of team and network structures with addition of temporariness

• absence of hierarchy

• empowerment of members

• use of technology

• acceptance of impermanence

network structures

• a central core linked through networks with outside contractors and suppliers of essential services

• own only core components and use strategic alliances/outsourcing for other resources

problems with outsourcing

• outsourcing activities part of core

• outsourcing to untrustworthy vendors

• no contracts

• overlooking impact on existing employees

• losing control to vendors

• overlooking costs

• failing to anticipate the need to change vendors

organizing trends

• shorter chains of command

• less unity of command

• more delegation

• more empowerment

• centralization mixed with decentralization

• reduced use of staff