BU 481 Test Review
List and describe 5 factors that influence buyer power – question example
Technical understanding of the frameworks and models
Class 2
What is the role of general managers
 Assessing performance
 Setting direction
 Creating strategy
 Implementing change
3 main ways to asses performance
 Balanced scorecard
 Organizational matrix: Organizational health/performance
 Financial measures
Organizational health/organizational performance framework
Operating performance
 Quantitative measures of financial and market performance
Organizational health
 Qualitiative and quantitative measures of operating performance
Questions to ask to asses performance
1. Where was your business 3 years ago
2. Where is your business today
3. Which way is it currently moving
Balanced scorecard
Start with asking 4 basic questions
1. Innovation and learning – can we continue to improve and create value?
2. Internal process – what must we excel at?
3. Customer – how do customers see us?
4. Financial – how do we look to shareholders
For each area, create 2-3 goals with measures
 Leading measures – prior to, looking forward (ex. R&D spending) – preferred as
they can be changed
 Lagging measures – something already done, cannot be changed (ex. Financial
performance)
Qualitative and quantitative assessment
Qualitative assessment – is the strategy well conceived?
 Cover all the bases?
 Internally consistent
 Makes sense
 Timely
Quantitative assessment – what are the results?
 Is company achieving its financial and strategic goals
 Is the company an above average performer in the industry
Vision, mission, values
 Collins and porras framework: guiding philosophy and tangible image
o guiding philosophy
 values – basic beliefs that guide behaviour
 core beliefs – reason for being, long term
o tangible image
 mission –clear, compelling, activating
strategic vision vs mission
Vision concerns a firms business path – “where we are going”
 markets to be pursued
 future product, market, technology, customer focus
 kind of company the management is trying to create
mission focusses on its present business purpose – “who we are and what we do”
 current product and service offerings
 customer needs and customer groups being served
 geographic coverage
importance of vision – acid test on vision usefulness
payoffs of vision
 crystalizes long term direction
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reduces decision making risk
creates a committed enterprise
provides a beacon to keep strategy related actions
helps org prepare for the future
Vision acid test:
 desirable and feasible destination
 flexibility for management to get there
 stretch for organization to achieve
Financial ratios
*come back to it
Class 3
Defining the industry
 two dimensions
o products/services offered
o geographic scope – global, local, regional
Are the forces the same? (buyers, suppliers, rivals)
 if not then they might be in separate industries
key questions about industries
 what are the industries dominant economic traits?
 How strong are competitive forces?
 What forces are driving change in the industry?
 What positions do rivals occupy?
 What are the key factors for competitive success?
 How attractive is the industry from a profit standpoint?
Industry analysis objectives
 Understand where value is being derived from
 Understand drivers of profitability
 Understand why some industries are more attractive than others
 Understand macroeconomic influences/trends
 Understand KSF (key success factors)
Industry analysis tools
 Porters 5 forces
 Industry value chain /value system
 PEST(EL)
 Key success factors
Industry value system (external)
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A system of steps that links raw materials through to the final product being
delivered