WPC 480- Final Exam 2023 with correct questions and answers

What is Strategy? What you will and will not do Strategy Definition Integrated and coordinated set of actions that exploit core competencies Competitive Advantage Something you do better than anyone else Sustainable Competitive Advantage Components (GOING TO BE A SHORT ANSWER, THINK OF UBER) Cost to imitate, valuable, rare, and non-substitutable Costly to Imitate a unique, historical event Casually Ambigous Competitors don't know how you do what you do Social Complexity Personal and interpersonal relationships give advantage Valuable What is the firm really good at? Rare Not easy to imitate Does a sustainable competitive advantage last forever? No. Liability of Foreigness Risk of participating outside a firm's domestic market that's new to them (culture, laws & regulations, and currency) I/O Model (Industrial Organization) External Model: demographics, economic, political, legal, sociocultural, tech, global, and physical environment Resource Based Model Internal Model: process improvement, analyze activities along supply chain, finance HR, IT (how can we do more with less) Five Force Model Threats of new entry, bargaining power of customers, bargaining power of suppliers, threat of substitutes, and rivalry among competitors Economies of Scale Spread your cost among many different divisions Switching Costs Costs incurred by the customer when they decide to switch to another product (describe in one sentence) Why did the 1st snapple acquisition failed? Trying to only use them for their warm/cold dist. network went from healthy to nonhealthy lost its uniqueness fired famous spokespeople lost credibility when people discovered it was water and sugar people didn't buy in bulk only sold top 15 best selling flavors Merger Two companies combine/integrate Acquisition One company gets controlling interest of another Down-Scoping (Cost Saving Method) closing or spinning off a division or product line that is underperforming Down-Sizing (Cost Saving Method) Reduce the size of your operations (headcount, people) Re-structure (Cost Saving Method) Changing one's business or financial operations (completely change such as closing U.S. manufacturing and outsourcing it all overseas) Why do many mergers, acquisitions, and takeovers fail? (GOING TO BE A SHORT ANSWER, FOCUS ON SNAPPLE) cultures do not align, interests do not align, too much diversification, systems don't align, winner's curse, due diligence failed, and merged entities become too large Competitive Blindspot Firm being surprised by a competitor's actions resulting in a negative consequence (Blockbuster and Netflix) Resource Similarity If two company's resources are very similar, it becomes challenging to differ Resource Similarity Solutions Either innovate a better product or process or drive your prices down Drivers of competitive behavior awareness, motivation, ability Awareness Do I know what my competitor is doing? Motivation Do I care? Ability Can I do anything about it? Strategic (Resource Related Question) significant resources, commitment, hard to reverse Tactical (Resource Related Question) easy to replicate, few resources, short term, quick response First Mover's Advantage You are the innovator which means you get the bigger market share and define product category Innovator's Dilemma Somebody can watch you and then come in and do it better, cheaper, and with less mistakes How are strategy maps filled? Top-down Strategy Maps: Financial Perspective Revenue, shareholder value, and productivity (innovation, improved supply chain, corporate citizenship, etc) Strategy Maps: Customer Perspective Value proposition, customer relationships, and image (brand) Value proposition How the organization will differ from competitors to attract, retain, and deepen relationships with target customers Strategy Maps: Internal Process Perspective manage operations, customers, innovation, and processes Strategy Maps: Learning and Growth Perspective human capital, information capital, and organization capital (Aligning people with outcomes) Scott Leadership Value (Intuit) Integrity without compromise do right by all customers seek the best continuously improve process speak, listen, and define in that order customers define quality (PICK WHICH ONE RESONATES WITH YOU THE MOST) Trader Joe's Customers college educated, single without kids, health conscious, curious Trader Joe's Products Off-brand, unique Trader Joe's Stores Small stores in old strip malls with narrow aisles Trader Joe's Employee college educated with degrees that provided little money, high wages compared to competitors, and excellent customer service Trader Joe's Pricing no sales, no coupons, no advertising Org Structure: Simple one head guy that takes care of everything in the company Org Structure: Multi-Divisional They have a board and under that board they have divisions Org Structure: Functional An executive team with divisions underneath that has function divisions underneath it Organization Control measured and benchmarked against a prior year's performance (quality, sales, etc) Financial Debt to equity ratio Strategic Controls hard to measure, no data, establishing benchmarks along the way of establishing strategy (such as deadlines) Cost Leadership Increasing profits by reducing costs, while charging industry-average prices Differentiation Differentiation involves making your products or services different from and more attractive than those of your competitors Informal Networks Advice, trust, and communication Advice Who do you go to to solve a problem? Trust Who do you share with? Who has your back? Communication Who do you talk to all the time? (IT) Balanced Scorecard A way for an organization to have non-financial and financial ways of telling how the company's doing (same categories as strategy map) Coach Knight coaches have to be tyrants, begging benefactors, and parents Coach Knight's Philosophy If a player messes up, they will be benched. The bench then talks to the ass and the ass talks to the brain. Coack K's Philosophy Don't do anything detrimental to yourself because if it's detrimental to you, it's detrimental to the program and Duke University. Coack K on Rules Rules get in the way of leadership