Advanced Strategic Management Quiz
45 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is one consequence of operating in an ecosystem according to the content?

  • Reduction in competition
  • Higher barriers to entry
  • Elimination of third-party developers
  • Increased specialization among actors (correct)

What does 'envelopment' refer to in the context of multi-sided platforms?

  • An aggressive pricing strategy to attract users
  • Combining functionality with another platform to form a bundle (correct)
  • The creation of a completely new platform
  • Limiting access to third-party developers

Which of the following is a strategy to attract one side of a multi-sided platform?

  • Implementing strict regulations
  • Increasing production costs
  • Aggressive contract terms
  • Subsidizing one side (correct)

In evaluating Ryanair's performance, which metric would likely be significant?

<p>Revenue per passenger (A)</p> Signup and view all the answers

What aspect of Ryanair's business model should be considered in evaluating its structure prior to the AGB transformation?

<p>Cost structure and revenue streams (D)</p> Signup and view all the answers

What is the primary goal of differentiation strategies with a price premium?

<p>To increase profit margins (D)</p> Signup and view all the answers

Which strategy seeks to offer higher benefits while also having lower prices compared to competitors?

<p>Hybrid strategies (C)</p> Signup and view all the answers

What characterizes non competitive strategies?

<p>Increased prices with low perceived product benefits (B)</p> Signup and view all the answers

What is a key indicator of limited brand loyalty among consumers?

<p>Consumers switching brands easily (D)</p> Signup and view all the answers

What can hybrid strategies help achieve aside from cost efficiency?

<p>Quick market entry and position building (C)</p> Signup and view all the answers

Which of the following is a strategy employed to attract customers willing to pay a premium for top quality?

<p>Focused differentiation (D)</p> Signup and view all the answers

Which strategy is likely the least effective in a highly competitive market?

<p>Non competitive strategies (C)</p> Signup and view all the answers

What is the impact of low consumer price sensitivity on pricing strategies?

<p>Higher prices may be tolerated without loss of sales (B)</p> Signup and view all the answers

Which situation could allow two strategic business units (SBUs) of the same company to pursue different generic strategies?

<p>Introduction of technological innovations benefiting both SBUs (D)</p> Signup and view all the answers

What is a necessary condition for a standard low-cost strategy to be sustainable?

<p>Establishing economies of scale (B)</p> Signup and view all the answers

What does the strategy clock concept emphasize in competitive strategies?

<p>Temporal dynamism in competitive strategies (D)</p> Signup and view all the answers

Which statement best describes hybrid strategies in the strategy clock model?

<p>They combine elements of low cost and differentiation strategies (C)</p> Signup and view all the answers

How does a low-cost strategy typically target consumers?

<p>By addressing price-sensitive market segments (C)</p> Signup and view all the answers

In what scenario might a company choose to reposition its strategy?

<p>After achieving desired results in the market (D)</p> Signup and view all the answers

What is a characteristic of the low-cost strategy under the strategy clock?

<p>It often requires a no-frills approach (C)</p> Signup and view all the answers

What is a limitation of basic competitive strategies according to the discussed concepts?

<p>They are static and do not evolve over time (C)</p> Signup and view all the answers

What advantage does a cost-leader achieve by maintaining parity with competitors in product features?

<p>Ability to charge the same prices as competitors (D)</p> Signup and view all the answers

What is a key factor to consider when implementing a differentiation strategy?

<p>The strategic customer whose needs are being targeted (A)</p> Signup and view all the answers

Which of the following is NOT one of the key drivers of differentiation?

<p>Economic scale (A)</p> Signup and view all the answers

What is the approach of a cost focuser in a focus strategy?

<p>To identify areas where broad strategies are inefficient due to costs (C)</p> Signup and view all the answers

What risk does Porter associate with being 'stuck in the middle' in business strategy?

<p>Lack of competitive advantage (B)</p> Signup and view all the answers

Which aspect is essential to consider when establishing unique product features for differentiation?

<p>Building complements with other products (C)</p> Signup and view all the answers

What defines a differentiation focuser in a focus strategy?

<p>They aim for a niche market with specific needs. (D)</p> Signup and view all the answers

What is the primary caution when implementing a differentiation strategy?

<p>Ensuring production costs do not exceed WTP (A)</p> Signup and view all the answers

What is the primary focus of a strategic business unit (SBU)?

<p>Supplying goods or services for a distinct domain of activity (C)</p> Signup and view all the answers

Which of the following best defines competitive advantage?

<p>Creating more value for customers than the cost to create that value (D)</p> Signup and view all the answers

Which of the following is NOT a driver of cost leadership?

<p>Superior marketing techniques (B)</p> Signup and view all the answers

What must a cost leader ensure while pursuing a low-cost strategy?

<p>That they can meet market standards for quality (B)</p> Signup and view all the answers

What does the concept of 'economies of scope' refer to?

<p>Lowering average costs by producing multiple products together (A)</p> Signup and view all the answers

Which of the following best describes a 'cost-leadership strategy'?

<p>Offering the lowest cost to a broad target market (D)</p> Signup and view all the answers

Which of the following factors is considered a 'time-based advantage'?

<p>Achieving unit cost reductions through production experience (D)</p> Signup and view all the answers

What market-based criteria can identify a strategic business unit (SBU)?

<p>Competitors and market share (A)</p> Signup and view all the answers

What leads to the decline in sustainability of advantage in hypercompetitive environments?

<p>Rapid movement and counter-movement (A)</p> Signup and view all the answers

Which firm is characterized by relatively poor perceived quality and lower prices?

<p>Cost leading firm (L) (B)</p> Signup and view all the answers

What is a potential consequence for consumers if a mid-point firm (M) reacts to a cost leading firm (L)?

<p>Changes in price paid for acceptable quality (C)</p> Signup and view all the answers

What is a key feature of hypercompetitive environments?

<p>Continuous disequilibrium and change (A)</p> Signup and view all the answers

In a scenario transformed from 'lose–lose' to 'win–win' in competitive dynamics, what aspect does the game theory address?

<p>Collaboration and cooperation (C)</p> Signup and view all the answers

Which option best describes the trade-offs in pricing strategies according to perceived quality?

<p>Acceptable combinations exist along a blue line of trade-offs (C)</p> Signup and view all the answers

What can cause a competitive strategy to fail in competitive markets?

<p>Absence of strategic lock-in (B)</p> Signup and view all the answers

What is a fundamental assumption about cooperation in competitive dynamics?

<p>Cooperation can yield better outcomes than competition (A)</p> Signup and view all the answers

Flashcards

Multi-sided Platforms

Platforms that serve two or more distinct groups of users, each group offering value to the other.

Complementors

Businesses or products that enhance the value of a core platform by providing additional features, services, or content.

Envelopment

A strategy where a company expands its operations to encompass the market of a rival platform, offering a combined service.

Specialization

The process of focusing on a specific area of expertise or service within a platform.

Signup and view all the flashcards

Attracting One Side

A strategy of subsidizing one side of a multi-sided platform to attract the other, like free games to attract more players.

Signup and view all the flashcards

Strategic Business Unit (SBU)

A division or profit center within a corporation that operates independently and focuses on a specific market or product area.

Signup and view all the flashcards

Competitive Advantage

A situation where a firm creates more value for its customers than its cost to produce it, exceeding competitors in the market.

Signup and view all the flashcards

Cost Leadership Strategy

Becoming the lowest-cost producer in a specific market by focusing on efficiency and minimizing expenses.

Signup and view all the flashcards

Economies of Scale

The cost per unit of production decreases as the quantity produced increases.

Signup and view all the flashcards

Economies of Scope

Producing a wider variety of products or services at a lower cost by sharing resources and infrastructure.

Signup and view all the flashcards

Learning Economies

Cost reductions achieved over time as workers become more efficient and skilled in production processes.

Signup and view all the flashcards

Product Design for Cost Leadership

Designing products that use cheaper materials and simplify manufacturing processes.

Signup and view all the flashcards

Organization for Cost Leadership

Optimizing the production process using techniques like lean manufacturing and automation to reduce costs.

Signup and view all the flashcards

Differentiation Strategies

These strategies aim to offer products or services with unique features or benefits that set them apart from competitors, allowing for higher prices or increased market share.

Signup and view all the flashcards

Differentiation Without Price Premium

This strategy focuses on enhancing product features and benefits to increase market share without raising prices, attracting price-sensitive customers.

Signup and view all the flashcards

Differentiation With Price Premium

This strategy prioritizes superior product features and benefits, justifying a higher price point and maximizing profit margins.

Signup and view all the flashcards

Focused Differentiation

This strategy targets specific customer segments with specialized products or services that meet their unique demands and are willing to pay a high premium.

Signup and view all the flashcards

Parity in Features

Matching competitors in product features valued by customers, allowing the cost-leader to charge similar prices.

Signup and view all the flashcards

Hybrid Strategies

Combines aspects of both differentiation and cost leadership, seeking to offer higher benefits at lower prices compared to competitors.

Signup and view all the flashcards

Entering New Markets

Hybrid strategies can be used to quickly gain a foothold in new markets by offering compelling value propositions.

Signup and view all the flashcards

Proximity to Competitors in Features

Offering slightly fewer features than competitors, but still appealing to customers by offering lower prices.

Signup and view all the flashcards

Building Market Share

Hybrid strategies can be effectively employed to aggressively capture market share by offering superior value at competitive prices.

Signup and view all the flashcards

Strategic Customer

The target customer group whose needs and preferences drive the differentiation strategy.

Signup and view all the flashcards

Non-Competitive Strategies

These strategies adopt a high-price approach despite offering low perceived product or service benefits, often relying on brand power or market dominance.

Signup and view all the flashcards

Key Competitors in Differentiation

The companies offering similar products or services that compete for the same strategic customer group.

Signup and view all the flashcards

Cost Focus Strategy

Targeting a narrow segment of customers with a cost-leadership approach, offering products at the lowest price within that segment.

Signup and view all the flashcards

Differentiation Focus Strategy

Targeting a specific customer segment with unique products or services that meet their specific needs better than broader differentiators.

Signup and view all the flashcards

Strategic Lock-In

A situation where a company or product has a dominant market position making it difficult for competitors to enter or challenge.

Signup and view all the flashcards

Price-Quality Trade-Off

The balance between the price of a product and its perceived quality, which customers consider when making purchasing decisions.

Signup and view all the flashcards

Hypercompetitive Environment

A market characterized by rapid and unpredictable changes, leading to short-lived competitive advantages.

Signup and view all the flashcards

Sustainable Advantage

A competitive advantage that can be maintained over a longer period, allowing a company to consistently outperform its rivals.

Signup and view all the flashcards

Game Theory

The study of strategic decision-making in situations involving multiple participants, considering their potential interactions and outcomes.

Signup and view all the flashcards

Lose-Lose Competition

A competitive scenario where all participants are negatively impacted by the competition, resulting in no clear winner.

Signup and view all the flashcards

Win-Win Cooperation

A collaborative approach where all participants benefit from the cooperation, achieving a positive outcome for everyone.

Signup and view all the flashcards

When can a company pursue different generic strategies for different SBUs?

A company can pursue different generic strategies for different Strategic Business Units (SBUs) when circumstances allow, such as when the SBUs operate in separate markets or cater to different customer segments.

Signup and view all the flashcards

What happens when both cost efficiency and quality are improved?

Technological or managerial innovations can lead to improvements in both cost efficiency and quality simultaneously. This creates a competitive advantage by offering both low prices and high quality products or services.

Signup and view all the flashcards

What's the competitive landscape like when pursuing hybrid strategies?

When the competitive landscape is not overly competitive, companies can explore hybrid strategies that combine elements of both cost leadership and differentiation. This is possible when there's less pressure to compete on price alone.

Signup and view all the flashcards

What's a pathway to achieve results and then reposition?

Companies can initially use a hybrid strategy as a pathway to achieving results, then reposition themselves towards one of the basic strategies (cost leadership or differentiation) once they have established a strong foothold.

Signup and view all the flashcards

Strategy Clock

The Strategy Clock is a model that helps visualize different competitive strategies based on price and perceived value to customers.

Signup and view all the flashcards

Low Cost Strategies

Low-Cost Strategies focus on offering products or services at the lowest possible price, often with minimal features or differentiation.

Signup and view all the flashcards

Standard Low-Price Strategy

A standard low-price strategy aims to increase market share by offering products at competitive prices while maintaining similar quality to competitors.

Signup and view all the flashcards

No-Frills Strategy

The ‘no-frills’ strategy targets price-sensitive market segments by offering stripped-down products with fewer features, focusing purely on cost efficiency.

Signup and view all the flashcards

Study Notes

Advanced Strategic Management

  • Course content for the next three weeks includes strategic choices, two cases, and a guest speaker.
  • Subtopics include business strategy (how companies compete in markets), corporate strategy (determining business directions), and strategy methods (how to pursue strategies).

Business Strategy

  • Level of analysis: strategic business units (SBUs) within corporations or standalone companies.
  • SBU: units providing goods or services in a specific domain (e.g., divisions, profit centers).
  • Identifying SBUs: market-based criteria (similar customers, channels, competitors) and capabilities criteria (online business activities).

Competitive Advantage

  • Classic definition: creating value for customers that exceeds the firm's cost to create it (Porter, 1987).
  • To be competitive, an SBU must ensure users perceive sufficient value to pay more than supply costs.
  • To gain an advantage, an SBU should create greater value than competitors.

Basic Competitive Strategies

  • Competitive advantage categories: lower cost and differentiation.
  • Competitive scope categories: broad target and narrow target.
  • Strategies include: cost leadership, differentiation, cost focus, and differentiation focus.

Cost Leadership Strategy

  • Aims to become the lowest-cost organization within a given industry.
  • Drivers of cost leadership: lower input costs, economies of scale, economies of scope, learning economies, product design, organization of production.
  • Important caveats: low cost should not come at the expense of quality, and maintaining parity with competitors on features valued by customers is crucial.

Differentiation Strategy

  • Involves creating a unique value that consumers sufficiently value to pay a price premium.
  • Key to differentiate: identifying the strategic customer and competitors.
  • Drivers of differentiation: product/service attributes, customer relationships, complements.
  • Importantly, producing differentiation does not negate the need for an efficient production.

Focus Strategy

  • Targets a narrow market segment.
  • Types: cost focus and differentiation focus.

Cost Focusers

  • Identify areas where broader cost-based strategies fail due to added costs.

Differentiation Focusers

  • Identify specific needs not well-served by broad differentiators.

Hybrid Strategies

  • Strategies that aim for both higher benefits and lower prices (mix of cost leadership and differentiation).
  • Useful when entering a market or building a position quickly.

Non-Competitive Strategies

  • Increased prices with low perceived product/service benefits.
  • Primarily useful in markets with high barriers to entry (e.g., strategic ‘lock-in’ or monopoly)

Interactive Dynamics

  • Different trade-offs in terms of price and perceived quality acceptable to customers.
  • Cost-leading firms prioritize lower prices, while differentiators emphasize higher quality/price combination.
  • Mid-point firms aim for a balance between price and quality.
  • Factors like hypercompetitive environments make competitive advantages temporary, requiring continuous adaptation.
  • Actions like cannibalizing successes, remaining unpredictable, misleading the competition, and leveraging insights from game theory can support staying competitively ahead.

Business Models

  • Explain value propositions, operations, cost structures, and revenue streams.
  • Value creation: offering to customers, targeting customers, and valuing other participants.
  • Value capture: understanding revenue streams, cost structures, and apportioning value across stakeholders.

Multi-sided Platforms

  • Business models bringing together two or more interdependent groups on a platform (e.g., Uber, video games, Google search).
  • Characteristics: increasing returns to adoption, difficult competition even with superior solutions, and winner-take-all effects, standardization and reliance on modular production.
  • Key factors about Platform interaction: specializing one side to attract the other side (e.g. game developers), aggressive pricing, knowledge dissemination for better complements.

Case Study: Ryanair

  • Evaluating the European airline industry's attractiveness and profitability drivers.
  • Assessing Ryanair's performance between 2013-2018.
  • Detailing Ryanair's business model prior to AGB transformation (value proposition, customer service, revenue stream, key resources, and cost structure).

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

Advanced Strategic Management PDF

Description

Test your knowledge on advanced strategic management concepts including strategic choices, competitive advantage, and the role of strategic business units (SBUs). This quiz will challenge you on key subtopics such as business and corporate strategy over the coming weeks. Prepare to engage with real-world cases and insights from industry experts.

More Like This

Strategic Management Overview Quiz
32 questions

Strategic Management Overview Quiz

RefinedQuartz avatar
RefinedQuartz
Strategic Management and Competitive Advantage Quiz
12 questions

Strategic Management and Competitive Advantage Quiz

ReformedToad avatar
ReformedToad
Strategic Management Quiz
12 questions

Strategic Management Quiz

StylishActionPainting avatar
StylishActionPainting
Use Quizgecko on...
Browser
Open
Browser
Browser