CBM121 3rd Exam
Study online at https://quizlet.com/_emoifa
Strategy-making
Corporate-Level Strategy
Business-Level Strategy
Competitive Strategy
Functional Strategy
Operational Strategy
Business Challenge
Relevance of the Past
Leadership Matters
Wild cards or black swan events
Theory of supply and demand
Scarcity
Competition: The Beating Heart of Capitalism
Globalization's Biggest Effect
Globalization
Environment
1/4
involved with the identification of the ways that an organization can
undertake to achieve the performance targets, weaken the com-
petitors, achieve competitive advantage and ensure the long-term
survival of the organization.
defines the markets and businesses in which a company will
operate; the set of strategic alternatives from which an organiza-
tion chooses as it manages its operations simultaneously across
several industries and several markets; Where to compete?
defines the basis on which firm will compete; the set of strategic
alternatives from which an organization chooses as it conducts
business in a particular industry or market;
How to compete?
objective is to win the customers' heart through satisfying their
needs, and finally to outcompete the competitors (or rival compa-
nies) and attain competitive advantages
the departmental/division strategy designed for each organiza-
tional function; refers to a strategy that emphasizes a particular
functional area of an organization;
How to implement business strategy?
formulated at the operating units of an organization.; develop to
achieve immediate objectives; managers develop this for each set
of annual objectives in the departments or divisions;
How to put strategy into action?
The context in which strategy is developed and implemented will
determine its success; This simple point is often overlooked, yet it
is an important and recurring theme.
there is a dangerous tendency to overemphasize the significance
of broad trends without understanding their details, which can be
crucial; it is helpful to look at some of the perennial issues that will
continue to shape the success of any
business strategy.
The challenge is to combine management skills and leadership
ability in the right way at the right time; it shows the range of
management skills and roles that every leader needs to master.
high-impact, low-profitability events that are potentially dislocating
and will shape the future.
shows that in a competitive market, price will affect the quantity
demanded by consumers and the quantity supplied by producers,
resulting in equilibrium.
The more abundant a product or service, the lower its price will be,
event to the extent that it may not be profitable to produce and sell.
Having the insight and ability to deliver what the customer wants is
crucial, but anticipating change puts you ahead of the competition;
first understand why and where scarcity will occur, and then use
people's skills and abilities to deliver new products and services
that are difficult to replicate.
brings both opportunities and challenges, creating an ever-bigger
overall market but also with the possibility, because of industry
consolidation, of reducing the number of players in the market.
means there are many opportunities beyond traditional geograph-
ic spheres of operations.
They include perennial challenges as well as concerns and op-
portunities that are significant temporarily before fading. The most
severe combine a medium to high level of severity and likelihood
with a medium to low level of preparedness.
 CBM121 3rd Exam
Study online at https://quizlet.com/_emoifa
Essence of Successful Strategies
Thinking strategically
Developing a business's strategy
Organic Growth
Mergers and Acquisitions
Mergers
Acquisitions
Test of the success of a merger or acquisition
Challenge to merge or acquire
Decide your strategy
Planning and Preparation
Bottom-up approach
Target specification
Due Diligence
Post-Acquisition Planning and Integration
Post-acquisition planning
Key to success with post-acquisition planning
Integration Activities
Alliances
Vertical integration
Horizontal integration
Diversification
Concentric diversification
2/4
It helps the company grow so that it can meet the needs of its
customers more successfully than its competitors.
a thought process that focuses on potential factors affecting an
action's results. It involves setting a clear goal, planning, and
considering possible outcomes; enables managers to map the
route to success as well as developing their skills of analysis and
leadership
It helps managers see where and how change is needed to make
the business successful. It shows where it makes the most profits
and how this can be continued and developed.
This occurs when a business grows by using its existing resources;
a company is doing increasingly better than its competitors or is
entering new markets; requires launching new products or product
extensions.
One of the fastest routes to growth also one of the hardest and
riskiest.
the combination of two companies to form one
one company buys another.
the extent to which it provides a platform for future development
and growth.
the difficulty of constructing the best deal and then seeing it
through.
This vision determines how the business approaches what is to be
gained, likely targets or partners, and the rationale for it.
Decide your strategy , Identify and select targets, Decide specific
objectives and understand how issues affect them and assess the
current and potential value of the target business.
which lower-level managers or are involved in the strategic
process as they can highlight potential pitfalls as well as more
positive developments that may be overlooked.
attributes that are either essential or desirable in a target company
This is the process of investigating a target company in detail;
make sure that the business is fully understood and the acquisition
proceeds successfully and to provide a financial and legal audit.
Whatever precedes this stage can be rendered worthless if suc-
cessful integration of the target is not achieved.
needs to start before the deal is finalized.
to realize the benefits of the deal as quickly as possible, generating
momentum and support for the deal.
Strategic Alliances, Partnering and Joint Ventures
are agreements between two or more companies to collaborate
on specific projects or ventures.
involving organizations in the same industry but at different stages
of the value chain; provide businesses with greater control over
the process of creating goods or services and getting them to the
customer.
involves collaboration between organizations in the same industry.
involves a business moving into an additional area of activity;
can provide new opportunities for existing skills as well as spare
capacity.
based on existing skills, customers and sales channels but the
applications broaden in concentric rings.
CBM121 3rd Exam
Study online at https://quizlet.com/_emoifa
opposite of diversification; involves dropping noncore activities,
or even redefining and focusing on core operations.; requires
Specialization
doing what you do sufficiently better than your competitors and
successfully anticipating and adapting to market changes.
are the unique skills that differentiate an organization from its
Core activities competitors and persuade customers of its superiority; known as
business idea factors
are the processes needed to meet the industry standard without
Context activities
surpassing it; activities refer to "hygiene" factors
Hygiene factors those essential to the success of any business
Core where real value of the business lies
typically seen as a positive thing in business, but it can also bring
Growth
hidden dangers and challenges known as
Losing control Systems and staff struggle to keep up, quality suffers.
Cash crunch Costs rise faster than income, leading to financial strain
Identity crisis Expanding too fast can dilute your brand and vision.
Team troubles Morale drops as employees feel overwhelmed or left behind.
concerns the organization, coordination, and integration of how
Strategy implementation work gets done; transforms theory into strategic actions and busi-
ness models, it often requires changes within the organization.
the process of creating, implementing, monitoring, and modifying
the structure, processes, and procedures of an organization; al-
Organizational design
lows managers to effectively translate their chosen strategy into a
realized one; structure, culture, and control.
defines how jobs and tasks are divided and integrated, delineates
the reporting relationship up and down the hierarchy, defines
Organizational structure
formal communication channels, and prescribes how individuals
and teams coordinate their work efforts.
Describes the degree to which a task is divided into separate jobs;
Specialization
requires a trade-off between breadth versus depth of knowledge:
Division of labor degree to which a task is divided into separate jobs
Larger firms tend to have a high degree of specialization;
Smaller entrepreneurial ventures tend to have a low degree of specialization
Captures the extent to which employee behavior is controlled by
Formalization
explicit and codified rules and procedures.
are characterized by detailed written rules and policies of what to
Formalized structures
do in specific conditions.
Refers to the degree to which decision making is concentrated at
Centralization
the top of the organization.
Top-down strategic planning takes place in highly centralized degrees of organizations
Planned emergence found in more decentralized organizations,
Determines the formal, position-based reporting lines and thus
Hierarchy
stipulates who reports to whom.
Tall organizational structures the span of control is narrow.
the span of control is wide, meaning one manager supervises
Flat organizational structures
many employees.
are characterized by a high degree of specialization and formal-
ization, and a tall hierarchy that relies on centralized decision
Mechanistic Organization
making; used when the firm pursues a cost-leadership strategy at
the business level.

3/4
CBM121 3rd Exam
Study online at https://quizlet.com/_emoifa
Organic Organization
Simple Structure
Functional Structure
Higher specialization
Multidivisional Structure or matrix structure.
Implementation
Cost-leadership strategy
Differentiation strategy
Integration strategy
Integration strategy
Business strategy is dynamic
International Strategy
Multi-domestic strategy
Global Strategy
Transnational Strategy
4/4
an organizational form characterized by a low degree specializa-
tion and formalization, a flat organizational structure and decen-
tralized decision making.
generally is used by small firms with low organizational complexity;
the founders tend to make all the important strategic decisions
and run the day-to-day operations; They exhibit a low degree of
formalization and specialization.
adopt when sales increase; groups employees into distinct func-
tional areas based on domain expertise; allows for a higher degree
of specialization and thus deeper domain expertise than a simple
structure; centrally coordinate by a CEO.
allows for a greater division of labor, which is linked to higher
productivity.
adopt when a firm diversifies into different product lines and
geographies; consists of several distinct strategic business units
(SBUs), each with its own profit-and-loss (P&L) responsibility; a
widely adopted organizational structure
a critical step in putting a planned action into effect. It often intro-
duces change into the organization and can be met with strong
resistance.
create a competitive advantage by reducing the firm's cost below
that of competitors while offering acceptable value; managers
must create a functional structure that contains the organizational
element of a mechanistic hierarchy.
create a competitive advantage by offering products or services at
a higher perceived value, while controlling costs; sells a non-stan-
dardized product or service to specific market segments in which
customers are willing to pay a higher ; managers rely on a func-
tional structure that resembles an organic organization.
requires reconciliation of the trade-offs between differentiation and
low cost; the firm must be both efficient and flexible.
Managers must, therefore, attempt to combine the advantages
of the functional-structure variations used for cost leadership and
differentiation while mitigating their disadvantages.
it involves choices, change and an ability to move the business
(its employees and customers) from where they are now to where
they need to be in the future.
This firms involve in exporting and importing to expand business
in an international setting; has low market responsiveness and low
cost advantage.
this firms are highly decentralized, this is highly sensitive to the
culture and styles of the country where it operates e.g Mcdonalds;
The strategy has high market responsiveness with low cost ad-
vantage.
Opposite to Multi-domestic; operation is centralized no matter
what country you are in; This has significant cost reduction but
little local responsiveness; e.g BPOs
the best strategy yet the most costly one, this is a combination
of global and multi-domestic strategy where standardization of
process is maintained but local responsiveness was also focused
on; This strategy has significant cost reduction and significant local
responsiveness. e.g AIRCRAFT (Boeing 787 dreamliner)