MIDTERM REVIEW – MN2600 Topic MC Qs (est.) Comments Definition, Porter "Best vs Unique", competitive convergence, importance of strategic plan, triggering events What is Strategy? 1 - Best is competing, copying features. Only one team can win. - Competitive convergence: over time all offerings begin to look the same. You need to compete by innovation - Not having a business plan is risky because you can fail to prepare for changes. Regulations, competition, economy, customer expectations, employee morale. It can be costly but failing to do so can be deadly for your business. - Triggering events: events that change a firms strategy New CEo – new ideas, adaptation External Invervention – an outside stakeholder may make a demand to change a firms operations Threat of a change of ownership – if a firm has more than 50% of its shares available for sale then it is at threat of being taken over Perofrmance gap – firms performance is not meeting expectations, sales falling, low profits Strategic inflection point – an external event may alter demand/production 4 characteristics SM, describe SM Process (inc. corporate, competitive and functional strategies) Interdisciplinary – encompasses all functional areas of business together, not just marketing, hr, finance, and management. External focus – organizations must look at external environment to consider how factors like the economy, competitors, or market demographics influence decisions Internal focus – accessing organizations internal resources and capabilities Future direction of the organization – focused on making the future a reality, plans can be changed. SM Process Analysis of current situation Formulation of strategy – Corporate Strategies – goal oriented, what businesses to be in and what to do with them Competitive Strategies – goal oriented, how the business competes in a business or industry Functional Strategies – goal directed, the decisions needed to enact the plan. Might identify whys and how much it will cost, and any other supports Implementation of Strategy Topic MC Qs (est.) Comments Evaluation of strategy Different Views of Strategy No questions here Board of directors (BOD), Top Management Team, Relationship between BOD and Management, Other Ees Open exchange info, trust important Leadership & Governance Describe the elements of a strategic plan Current State - what the current state of the company is, using tools and their environment Future State – their broad goals and what they hope to achieve Strategic Plan – the plan on how to realistically reach their goals Executive Summary – short summary lasting at most 2 pages for people who do not have time to read it Describe intended and Emergent Strategy The Strategic Plan Intended strategy is when you have a strategic plan that is supposed to get you to a goal. Emergent strategy is when there are factors that you did not anticipate that will effect whether you reach your goal or not. A firm must be flexible enough to make use of these. what is CA? the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity - Compare and contrast the different views. - Reminder to look at summary table of three views - Familiar with Musk and Buffett's interaction and explain how it illustrates these three different view. What insights can emerge from examining their interaction? Intended and Emergent Strategy Comparative Advantage Three Views: General Three Views: IO Three Views: RBV Three Views: Guerrilla 1 Describe large changes in the environment and CSFs. Drivers of the new business environment -information revolution, technology, globalization New Business Environment Implications of driving forces -continual change, reduced need for physical assets, vanishing distance and compressed time, vulnerability Topic MC Qs (est.) Comments Critical success factors -ability to embrace change, creativity & innovation capabilities, being a world class organization Describe vision/mission/manta Two perspectives of the external environment. General sector – politics economy, steeped stuff Specific sector – customers competitors suppliers etc, porters stuff What does Porter's Five Forces attempt to describe? Describe each force inc. one example of sub-factor, explain an example of how to use FF to make strategic decision. Vision/Mission/Mantra External Environment Analyzes five competitive forces that shape every industry, and helps determine a firms weaknesses. Current Rivalry Potential entrants Bargaining power of buyers Bargaining power of suppliers Substitutes Porters Five Forces Strategic Groups 2 What are strategic groups and strategic group mapping? Describe three ways to use strategic groups in strategic planning. Describe the purpose of STEEPED analysis (PESTEL analysis). Describe at least two of the factors included in this analysis. Used to identify external factors that can influence the firm. STEEPED Analysis Trend Watching Socio-cultural Technological Economic Ecological Political-legal Ethics Demographics What is trend watching? What is one example of a current trend? How can trend watching be used in strategic planning? Topic MC Qs (est.) Comments What are the benefits of conducting an external analysis? What are the challenges? Benefits – identify opportunities and threats Challenges – analysises take a long time to complete. Rapid changes in the external environment can cause the assessment to be less accurate, and fall out of relevance quickly. What is an internal analysis? Benefits Challenges Internal Analysis Looks internally at the businesses capabilities and resources What is the business model canvas (BMC)? Describe each of the nine elements of the BMC. How a business creates, delivers, and captures value. Customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, cost structures Review all the terms under resources and capabilities. Business Model Canvas Resources & Capabilities VRIO Analysis 2 Tangible – financial, physical, technological (patents, trade secrets), organizational (strategic planning, evaluation & control systems) Intangible – human, innovation & creativity, reputation Describe the VIRO framework. Why is a VIRO analysis useful? Valuable, Rare, Difficult to Imitate, Supported by Organization Impact on competition and their current performance Helps see if a business has the resources and capabilities to achieve and sustain a competitive advantage What is the dynamic capabilities view? Explain why some people believe that it is more useful for strategic management than other traditional perspectives? DCV involves a firms ability to renew and recreate its resources and capabilities to meet changing environments. Dynamic Capabilities Sensing – identify threats organize – capture – Topic MC Qs (est.) Comments renew – helps explain changes in the valuation of resources/capabilities over time. Addresses practical need to understand how firms can change effectively, given that competitive environments can change at a rapid rate. What is a value chain? Describe in a general sense but also in detail. Importance of "fit" across value chain. Explain how a value chain analysis may be used in strategic planning and management. The value chain is used to analyze a firms key activites to see how they add value (and cost), or the price a customer is willing to pay, is higher than the cost. This means that you will make a profit Staff functions – infrastructure, research & development, hrm, procurement Line functions – supply chain management, operations, sales and marketing, distribution, service You need to match your activities to your value proposition Value Chain Internal Audit Capabilities Assessment Profile A value chain analysis can be used to help understand your current situation. It will help you understand how all the activities and processes of the firm, especially the critical ones, contribute to and support the value proposition No Qs or MC. No Qs or MC. Describe, in detail. A tool used to identify and summarize external factors. SWOT MC Value (each) Q Value (4 of 5) Strengths Weaknesses Opportunities – external – trends, govt support, low competition, Threats – external – economy, competition, trends 20 items @ 2 marks each 4 of 5 @ 15% each Topic Value Total MC Qs (est.) Comments 100%
