BUAD 453 Strategy in 3D Exam Flashcards

95 practice flashcards covering vocabulary, frameworks, and key concepts from Professor Jennifer Monroe's BUAD 453 Strategy in 3D course.

Three Ds of Strategy in 3D

Diagnose, Decide, Deliver.

Diagnose (Strategy in 3D)

Analyze the internal and external strategic situation.

Decide (Strategy in 3D)

Choose where and how the firm will compete.

Deliver (Strategy in 3D)

Execute the strategy and put choices into action.

Corporate Core Competencies

Key strengths and capabilities (e.g., brand, tech, operations) that create competitive advantage.

Levels of Strategy

Corporate, business, and functional.

Corporate-Level Strategy

Decides what businesses or industries to compete in.

Business-Level Strategy

Decides how to compete within a specific industry.

Functional-Level Strategy

Decides how departments (marketing, HR, finance) support the business strategy.

Four Conditions for Organizational Success

Course-specific success conditions (check Monroe's exact lecture wording).

Strategic Positioning

How a firm sets itself apart to compete in the market.

Cost Leadership

Competing by maintaining the lowest cost structure and prices.

Differentiation

Competing by offering unique, high-value product or service features.

Cost Leader Identification

Look for low operating costs, high efficiency, and scale.

Differentiator Identification

Look for premium quality, strong branding, and unique customer experiences.

STEEP Analysis

Macro-environment framework: Social, Technological, Economic, Environmental, Political.

Social Dimension (STEEP)

Examines cultural trends, demographics, and consumer habits.

Technological Dimension (STEEP)

Examines tech advances like AI, automation, and digital trends.

Economic Dimension (STEEP)

Examines economic conditions like inflation, interest rates, and growth.

Environmental Dimension (STEEP)

Examines climate, sustainability, and natural resource pressures.

Political Dimension (STEEP)

Examines government regulations, laws, and trade policies.

STEEP Primary Purpose

Identify macro-environment trends and see how they impact the firm.

Porter's Five Forces

New entrants, supplier power, buyer power, substitutes, and competitive rivalry.

Factors Increasing Threat of New Entrants

Low startup costs, weak customer loyalty, and easy access to distribution.

Factors Decreasing Threat of New Entrants

High startup costs, strong brand loyalty, patents, and regulations.

Factors Increasing Supplier Power

Few supplier options, high switching costs, and unique inputs.

Factors Increasing Buyer Power

Large order sizes, many options, and low switching costs.

Factors Increasing Threat of Substitutes

Cheaper or better alternative products that are easy to switch to.

Factors Increasing Industry Rivalry

Many equal competitors, slow market growth, and low switching costs.

Primary Purpose of Five Forces

Evaluate industry profit potential and overall attractiveness.

Limitations of Five Forces

Oversimplifies complex industries and ignores internal resources.

Income Statement

Shows financial performance (revenue, expenses, profit/loss) over time.

Current Ratio Formula

$$\text{Current Assets} \div \text{Current Liabilities}$$

High Current Ratio Interpretation

Indicates greater short-term liquidity to pay off debts.

Activity Ratios

Measure how efficiently a firm uses its assets and resources.

Inventory Turnover Formula

$$\text{COGS} \div \text{Average Inventory}$$

Receivables Turnover Formula

$$\text{Net Credit Sales} \div \text{Average Accounts Receivable}$$

Total Asset Turnover Formula

$$\text{Sales} \div \text{Average Total Assets}$$

Leverage Ratios

Measure how much debt a firm uses and its financial risk.

Debt-to-Assets Ratio Formula

$$\text{Total Debt} \div \text{Total Assets}$$

Debt-to-Equity Ratio Formula

$$\text{Total Debt} \div \text{Total Equity}$$

Profitability Ratios

Measure how effectively a firm generates profit from sales or assets.

Gross Profit Margin Formula

$$\text{Gross Profit} \div \text{Sales}$$

Purpose of VRIO

Evaluate internal resources to find sustainable competitive advantage.

"V" in VRIO

Valuable: Does the resource exploit opportunities or neutralize threats?

Not Valuable (VRIO Outcome)

Competitive Disadvantage.

"R" in VRIO

Rare: Is the resource unique among competitors?

Valuable but Not Rare (VRIO Outcome)

Competitive Parity.

"I" in VRIO

Inimitable: Is the resource hard or costly for rivals to copy?

Valuable + Rare but Not Inimitable (VRIO Outcome)

Temporary Competitive Advantage.

"O" in VRIO

Organization: Is the firm structured to capture the resource's value?

V + R + I but Not Organized (VRIO Outcome)

Limited (Unused) Competitive Advantage.

V + R + I + O (VRIO Outcome)

Sustainable Competitive Advantage.

Value Chain vs. Supply Chain

Supply chain is product movement; Value chain is internal value-creating activities.

Purpose of Value Chain Analysis

Map internal activities to find where value and costs are created.

Value Chain Activity Categories

Primary activities and support activities.

Primary Value-Chain Activities

Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales, Service.

Support Value-Chain Activities

Firm Infrastructure, HR Management, Tech Development, Procurement.

Primary Activity Example

Operations (manufacturing) or Outbound Logistics (shipping).

Value Chain Analysis Limitations

Can be complex, activities overlap, and does not create strategy on its own.

SWOT Analysis

Evaluates Strengths, Weaknesses, Opportunities, and Threats.

Internal SWOT Elements

Strengths and Weaknesses.

External SWOT Elements

Opportunities and Threats.

Purpose of SWOT

Organize internal and external factors to assess the strategic situation.

Traditional SWOT

Categorizing strengths, weaknesses, opportunities, and threats in a basic list.

Integrative SWOT

Connecting internal factors with external trends to create strategic choices.

Integrative SWOT Execution

Match S/W with O/T to build actionable strategic options.

Limitations of SWOT

Can be subjective, static, oversimplified, and lack prioritization.

Primary Purpose of Competitor Analysis

Understand competitor behavior to make better strategic decisions.

Focus of Competitor Analysis

Competitors' strengths, weaknesses, strategies, and likely moves.

Competitor Analysis Practice Example

Snapchat analyzing marketing trends of rival social platforms.

Competitor Analysis Components (Monroe)

Course-specific questions required by Monroe (check lecture notes).

Introduction Stage (Industry Lifecycle)

New product, high uncertainty, heavy investment, early adoption.

Growth Stage (Industry Lifecycle)

Rapid customer adoption, market growth, and rising competition.

Maturity Stage (Industry Lifecycle)

Slow market growth, intense rivalry, focus on cost efficiency.

Decline Stage (Industry Lifecycle)

Falling demand, shrinking market, pressure to harvest or exit.

Jumping to a New S-Curve

Moving to a new technology or product line to restart growth.

Performance Variance in Strategic Groups

Driven by differences in positioning, cost structures, and resources.

Repositioning Strategic Groups

Changing price, quality, target customers, or distribution.

Benefits of Moving Strategic Groups

Access to new customers, higher growth, and better margins.

Risks of Moving Strategic Groups

High costs, capability gaps, brand confusion, and rival retaliation.

Related Diversification

Expanding into a new business connected to your existing business.

Unrelated Diversification

Expanding into a new business with no connection to your existing business.

Key Idea Behind Related Diversification

Synergy—sharing customers, technology, brand, or distribution.

Exporting (Market Entry)

Selling products abroad: Low risk and cost, but less control.

Licensing (Market Entry)

Selling rights to use IP: Low investment, but risk to IP control.

Industry Profit Potential Tool

Porter's Five Forces.

Broad External/Macro-Environment Tool

STEEP framework.

Strategic Group Analysis

Visual map used to plot competitors and find market white space.

Competitive Benchmarking

Studying and copying a competitor's best practices.

Starbucks Premium Strategy

Differentiation through a premium, high-priced coffee experience.

YETI Entering Luggage

Corporate-level strategy via brand diversification.

Greenfield Entry

Building a new business operation from scratch in a foreign market.

Target Service-Quality Problem Perspective

Analyzed under the Customer perspective of the Balanced Scorecard.

Growth-Stage vs. Maturity-Stage S-Curve Priorities

Growth focuses on acquiring customers; Maturity focuses on cost efficiency.