Internal – Chapter 12 – Flashcards
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Strategy
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how organization matches it capabilities with opportunities in marketplace to accomplish goals
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Strategy also...
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describes how organization can create value for its customers against its competitors
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5 forces of industry analysis
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1. number and strength of competitors
2. potential constraints to market
3. availability of products (are there similar products)
4. how many customers
5. how many suppliers
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Two business strategies
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1. product differentiation
2. cost leadership
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Balanced scorecard
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translates and organization's mission and strategy into performance measures
-both financial and nonfinancial objectives
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4 perspectives of balanced scorecard
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1. financial - profits
2. customer - success of co. to reach target customer
3. internal business prospective - internal operations
4. learning and growth - people and system capabilties
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Internal business perspective 3 sub processes:
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1. innovation
2.operations
3.post-sale service
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Which of the following statements best define a product differentiation strategy?
A) It describes how an organization can increase customer base by differentiating its' product prices from its competitors.
B) It is an organization's ability to achieve lower costs relative to competitors through productivity and efficiency improvements, elimination of waste, and tight cost control.
C) It describes how an organization can decrease product prices by differentiating its' raw materials from its competitors.
D) It is an organization's ability to offer products or services its customers perceive to be superior and unique relative to the products or services of its competitors.
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D
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Which of the following statements is true of a balanced scorecard?
A) The balanced scorecard reduces managers' emphasis on long-run financial performance.
B) The balanced scorecard reduces managers' emphasis on short-run financial performance.
C) The primary goal of using the balanced scorecard is to sustain short-run financial performance.
D) The primary goal of using the balanced scorecard is to sustain short-run nonfinancial performance.
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B
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Evaluating success of strategy and implementation
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compare target to actual in balanced scorecard
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Managers can reduce capacity-based fixed costs by...
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measuring and managing unused capacity
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Unused capacity
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the amount of productive capacity available over the productive capacity needed to meet consumer demand
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Engineered costs result from
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a cause-and-effect relationship btw cost driver (output) and direct or indirect resources used to produce output
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Discretionary costs have 2 features
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1. come from periodic decisions on max amount to be incurred
2. no measurable cause-and-effect relationship btw output and resources used
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Downsizing
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making processes, people and products match costs of activities
-aka eliminating jobs
