Bus189 - Midterm Crib Sheet

Bus189 - Midterm Crib Sheet - Chapter 1 Strategic...

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Chapter 1 Strategic Management - art and science formulating, implementing, and evaluating strategies that will enable an organization a competitive advantage CASE ANAYSIS Business Model -> Strategy -> Organizational Design -> Performance - > Competitive Advantage Business Model : A conception of how a set of strategies a company pursues should mash together into a congruent whole enabling the company to gain a competitor advantage o How a company makes its money? (1) Competitors (2) Customer Needs (3) What resources (to serve customers) (4) Product (5) Growth Strategies (6) Organization Strategy [Formulation]: A set of related and consistent actions that manager’s take to increase their company’s performance relative to rivals (competitors) Wal-Mart (Low Cost Strategy) Nordstroms (Differentiation Strategy) - Low Price Custo m ers - High Quality Service/Products - Efficient supply chain (Inventory Down) – High Customer Service - Venders keep track of products - Return Policy - Buy in large quantities - Unique store structure - Location inexpensive - Location (affluent are as) - Low wag es / High Turnover - Products cater to richer e nd - Low Custo m er Service - Products are high end - Online Service - Less sales - Product Quality Low - Exclusive brands
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- Product are commodize - Profit margins - Minimal management - Employee training  - Warehouse (similar) - Regional organization - Volume / Inventory Turnover - Functional organization Strategy  MATCH  Organizational design Organizational Design [Implementation]:   (1) Structure - usually follow strategy (2) Control Systems – measurement systems. Monitor activities that you’re on track. (3) Culture – customer treatment, company values Performance: (1) R eturn  O I nvested  C apital    (2) = N et  O perating  P rofit  L ess  A dded  T axes  P rofitability  [income statement]    (3)                         Invested Capital (Equity + Debt)  [balance sheet] (1) Profit Growth (2) (NOPLAT) t+1 – (NOPLAT) t EX: 110-100/100x100% =  10% (3)                (NOPLAT) t x 100% Competitive Advantage: Profitability (ROIC) is greater than the average  profitability for the industry (above average ROIC) Dell Case Michael Dell – risk taker but still a follower, small-scale start-up, highly  ambitious, innovator, technical background  Industry – personal computers  Customers – low-cost/customized [1985-1888] Competitors – Gateway/HP/Apple Business Model 
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(1) Cutting out the middle-man (2) Supply chain management – Just In Time inventory (3) Turnover (5 days vs. 41 days) (4) Customized computers (5) Outsource customer service to India (6) Real-time info to suppliers (7) On-line sales [store that is 24/7] Timing (time it right) Chapter 2 External Analysis - Examine the forces [external] that shape competition in the
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This note was uploaded on 09/08/2010 for the course BUS 189 at San Jose State.

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Bus189 - Midterm Crib Sheet - Chapter 1 Strategic...

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