Business Strategies 4-6 – Flashcards
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Firms that enjoy a long-lasting advantage are said to have a
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sustainable competitive advantage
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Organizational assets that are difficult to quantify, such as knowledge, are called
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intangible resources
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Those resources that are most likely to lead to a competitive advantage are
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intangible resources
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A measure of a firm's ability to pay short-term obligations is
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liquidity
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A measure of a firm's total debt relative to its equity is
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leverage
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Dividing organizational processes into distinct activities that create value for the customer is
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the value chain
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In a budget hotel, activities associated with chain-level support are
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legal
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In a budget hotel, activities associated with property-level support are
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local purchasing
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Hotel activities associated with the chain-level core activities are
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reservations
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Activities associated with the property-level core in a hotel are
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check-out
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Core activities with the property-level are
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in-room services
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Support activities with the property-level are
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property maintenance
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What is the first stage of visionary leadership?
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Envisioning the organization in the future.
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Underlying philosophies that guide the decisions and behavior of a firm are
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core values
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Working with other managers to create an environment that would foster fulfillment of a vision is
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cultural-style leadership
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Where the CEO formulates strategy and then directs top managers to implement it, this is a use of
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commander-style leadership
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When the CEO formulates strategy and then plans the changes required to implement it, this is a use of
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change-style leadership
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The style of leadership where the CEO works with other managers to create a strategy uses
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Collaborative-style leadership
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The style of leadership where the CEO formulates a vision and strategy for the company and then works to create a culture that works to fulfill that vision uses
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cultural-style leadership
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The style of leadership where the CEO encourages lower-level managers to formulate and implement their own strategic plans while filtering out inappropriate programs uses
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crescive-style leadership
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When major changes to a firm's direction are needed, the resulting activities are referred to as
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radical restructuring
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A board of directors that ensures that managerial behavior is consistent with shareholder interests is an example of
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organizational governance
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Which type of problem exists when top managers attempt to maximize their own self-interests at the expense of shareholders?
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An agency problem
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Which type of problem best describes managers who gain so much power that they are able to use the firm to further their own interests rather than those of shareholders?
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Entrenchment
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One way to align CEO interests with the long-term interests in the organization is to
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link compensation to annual corporate performance
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An executive from two companies sitting on each other's boards is referred to as an
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interlocking directorate
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Quality is the primary goal of an organization with which type of orientation?
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Craftsman-type culture
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Growth is the primary goal of an organization with which type of culture?
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Builder-type culture
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New products and new technology development are the primary goals of an organization with which type of culture?
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Pioneer-type culture
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Pursuing aggressive advertising and innovative packaging are the primary goals of an organization with which type of culture?
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Salesman-type culture
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The importance of intangible people skills and intellectual assets is referred to as
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knowledge economy
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Scientific or technological knowledge that is associated with the actual creation of a product or service is
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core knowledge
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Knowledge that helps integrate various activities, capabilities and products is
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integrative knowledge
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Knowledge that can be communicated by written means is
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codified knowlege
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Knowledge that is difficult to articulate in a way that is meaningful and complete is
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tacit knowledge
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A real estate investment trust (REIT) is an example of
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a special financial arrangement that can provide competitive advantage.
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An organization's approach to competing in its chosen markets is
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business level strategy
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The moves and countermoves of firms and their competitors are
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competitive dynamics
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The classification system for business-level strategies based on common strategic characteristics is
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generic business strategy
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The strategy used when a firm pursues competitive advantage through efficient cost production is
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low-cost leadership strategy
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What is the strategy used when a firm pursues competitive advantage by distinguishing its products or services on the basis of an attribute?
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Differentiation
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The strategy used when a firm pursues competitive advantage by pursuing both cost leadership and differentiation strategies is
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best-value strategy
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The extent to which the assets of an organization are associated with plants, equipment and other fixed assets is
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capital intensity
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In some industries production costs per unit are less in a large facility than in a small facility. This concept is called
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economies of scale
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If technological improvements result in lower total unit costs then firms have achieved a cost advantage due to
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economies of technology
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The term used to describe when one firm contracts with another firm to provide goods or services that were previously supplied from within the company is
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outsourcing
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The concept that the time required to complete a task will decrease as a predictable function of the number of times the task is repeated demonstrates
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the learning curve
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When pursuing differentiation strategies which are more likely to lead to a sustainable advantage?
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Intangible resources
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A differentiation strategy could have sustainable differentiation based on
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brand or reputation
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The essence of a best-value strategy is
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finding a uniqueness that will bring a premium price at a reasonable cost
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The key to a best-value strategy is
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product differentiation
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A cost leader does
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need to cut costs in every aspect of the firm at all times
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The strategy used when a firm targets a particular market segment is called
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Focus strategy
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What portrays how sales volume for a product category changes over time?
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product life cycle
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Which term best describes the inevitable decline of leading firms due to competitive moves and countermoves?
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Creative destruction
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The strategy used when firms use every available resource in an effort to overwhelm rivals and reduce the change that countermoves will be successful is
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aggressive strategy
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Firms that stay at the forefront of technological advances in their industries are said to have a
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first mover advantage
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Domino's pizza has done well using which approach to gain the market share in the pizza industry?
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First mover advantage
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What is used when firms combine resources in an effort to gain a stronger resource position?
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Collaboration strategy
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The strategy used to prevent competitors from imitating sources of cost savings or differentiation, is called
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barriers to imitation
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What is used when a firm moves its resources out of declining markets into more prosperous ones in a short amount of time?
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Strategic flexibility
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What occurs when a firm focuses completely on a particular market niche in which other firms have little interest?
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Avoidance strategy
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A strategic group map categorizes
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competitors into groups that follow similar strategies
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Corporate level strategy is developed by the
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CEO and other top managers
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The corporate strategy formulation activities typically include all of the following EXCEPT
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establishing a marketing budget
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Concentration refers to
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virtually all of a firm's resource investments in a single business area
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The benefits of the concentration corporate level strategy include all of the following EXCEPT
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helping the firm overcome any instability in industry
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The potential problems that can impact a concentration corporate strategy include all of the following EXCEPT
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focusing on a single industry which results in too much knowledge about that single industry
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Successful firms in a given industry
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may pursue a wide variety of strategies
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The advantages of vertical integration include all of the following EXCEPT
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avoiding excess capacity at different levels of integration
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If Wal-Mart were to purchase a fleet of trucks, this would be an example of
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backward integration
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All of the following are potential sources of synergy from related diversification except
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financial portfolio model
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The benefits associated with synergy are greatest when
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the cost related to corporate level administration is greatest
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Large unrelated firms are called
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conglomerates
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Forces that undermine synergies include all of the following EXCEPT
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shared R programs
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For corporations the best performance results are produces by
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related diversification
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The benefits of an acquisition include all of the following EXCEPT
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preventing industry consolidation
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Corporate raiders participate in
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hostile acquisitions
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The greatest benefits of acquisition typically go to
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the shareholders of the acquiring firm
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The problems that can impact a merger or acquisition negatively include all of the following except
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cultural similarities
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Activities that corporations can pursue to develop core capabilities and competencies include all of the following except
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diversification
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Retrenchment in a decline situation involves all of the following except
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increased advertising to increase sales
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Downscoping involves
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reducing the diversification of the firm by selling of units
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The term Chapter XI refers to
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a legal filing that allows a firm to reorganize while it solves its financial problems
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A successful bankruptcy filing requires all of the following characteristics except
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the ability to move quickly so that court approval is not necessary
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LBO stands for
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leveraged buyout
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A breakup restructuring strategy refers to
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spinning off units into new public corporations
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The Boston Consulting Group matrix is based on which two factors?
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Business growth rate and relative market share
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Stars in a BCG grid represent
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high business growth rates and high relative market share
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A fish and seafood restaurant buying a catfish farm is an example of
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backward integration
