Term
|
Definition
| -The process of achieving desired results through the efficient utilization of human and material resources. |
|
|
Term
| 2. What are the 2 key concerns of management? |
|
Definition
| -Effectiveness and Efficiency |
|
|
Term
| 3. What is effectiveness concerned with? efficiency? |
|
Definition
Effectiveness: Doing the right thing at the right time.
-Efficiency: reducing waste or minimizing resource costs. |
|
|
Term
| 4. How are effectiveness and efficiency related? |
|
Definition
| If an Organization is efficient it is effective MOST of the time |
|
|
Term
| 5. What is your important resource as a manager? |
|
Definition
|
|
Term
| 6. Is management art or science? When is it considered a science? an art? |
|
Definition
-Science: develops theories based on studies.
-Art: There are many styles of managing and some are more effective then others. |
|
|
Term
| 7. How did management become important and why is it still significant today? |
|
Definition
| -It came along with the Industrial Revolution and because we still use these processes today. |
|
|
Term
| 8. What was the basic change in the industrial revolution? |
|
Definition
| The transfer of skills from craftsmen to machines. |
|
|
Term
| 9. What happened to productivity (supply), prices, and demand as a result of the industrial revolution? |
|
Definition
-Productivity increased
-Prices decreased
-Demand increased |
|
|
Term
| 10. What was the pivotal event of our time, according to Drucker? |
|
Definition
| The switching from owner-manager to professional manager. |
|
|
Term
| 11. Why do most businesses fail? |
|
Definition
|
|
Term
| 12. What does a first-line manager do? What are the names associated with 1st-line management? |
|
Definition
-Examples: Supervisors and Foremen
-Their primary objective is to ensure that their operating employees fulfill plans developed by top management. |
|
|
Term
| 13. What does a middle level manager do? What are the names associated with middle level manager? |
|
Definition
-Examples: Plant managers and Division heads
-One of their duties is to integrate the activities of different groups so they can operate in harmony with one another and are better able to cope with the demands made upon them. As for the latter, they act as interpreters and transform top management directives into first-line management. They are the communication channel between different levels of management. |
|
|
Term
| 14. What is corporate downsizing? What happens in corporate downsizing? What level of management is most adversely affected? |
|
Definition
| -Corporate downsizing is when a company adopts a “lean and mean” philosophy, an efficiency orientation. Companies who are going through corporate downsizing are trying to cut the fat by eliminating layers of management, asking retained managers and employees to do more; implementing new computer and information technologies, and farming out what had been staff managerial activities, such as legal counsel and training and development of employees to outside consulting firms. The result of this efficiency orientation has been that many middle management jobs have been eliminated altogether or have been replaced by new information technologies or have been farmed out to outside consulting firms. In fact, by one estimate, one million of these jobs have been eliminated in the past few years. Thus, middle management jobs seem to be in jeopardy. |
|
|
Term
| 15. What does a top manager do? What are the names associated with top management? |
|
Definition
-Examples: CEO, Chairman, President, etc…
-They determine the organization’s general goals and the action plans to achieve these goals. They ensure that goals are set and accomplished according to the organization’s purpose and they monitor the environment to identify potential problems and opportunities associated with the organization’s goals or purposes. |
|
|
Term
| 16. What is the difference between a line manager and a staff manager? |
|
Definition
-Line managers: directly responsible for work activities.
-They have the authority over the transformation process.
-Staff managers: use their special expertise to help line managers
-ex: Lawyer |
|
|
Term
| 17. What is the difference between a functional manager and a general manager? |
|
Definition
-Functional manager: responsible for a single area of activity.
-General manager: responsible for more complex organizational subunits. |
|
|
Term
| 18. What is the difference between an administrator and a manager? |
|
Definition
-Administrator: managers who work in public or non-profit organizations
-Manager: Managers who work in private, for-profit organizations. |
|
|
Term
| 19. What are the five functions of management? Be able to identify and describe the five functions of management. |
|
Definition
-Planning: goal-setting and action planning.
-Organizing: designing structure in order to achieve goals (what, who, how, when tasks)
-Staffing: The process of assuring competent employees are selected, developed, and rewarded in order to accomplish goals.
-Leading: keeping employees motivated and willing to work to achieve goals.
-Controlling: (3 aspects) 1.Monitoring performance, 2.comparing actual with projected performance, 3.taking corrective action to achieve goals. |
|
|
Term
| 20. What does "planning has primacy" mean? |
|
Definition
-It is the first thing you must do as a manager
-Without a plan, the other steps will not have a purpose. |
|
|
Term
| 21. What are the three aspects of controlling? |
|
Definition
-Monitoring performance
-Comparing performance
-Taking corrective action |
|
|
Term
| 22. What are the Siamese twins of management? |
|
Definition
|
|
Term
| 23. What is (are) the most important function(s) for a 1st-line manager? Middle manager? Top manager? |
|
Definition
1st line- all 5 and staffing and leading
Middle- all 5 and organizing
Top – all functions and planning most |
|
|
Term
| 24. What are three managerial roles Mintzberg identified? Be able to identify each role. (These roles arise from managers authority and status within the company) |
|
Definition
-Interpersonal Roles
-Informational Roles
-Decisional Roles
(Most important resource-people) |
|
|
Term
| 25. What gives rise to the three managerial roles, according to Mintzberg? |
|
Definition
|
|
Term
| 26. What are three managerial skills identified by Katz? Be able to identify each skill. |
|
Definition
-Technical Skills
-Human Skills
-Conceptual Skills |
|
|
Term
| 27. At what level of management are conceptual skills most important? Technical skills? Human skills? |
|
Definition
-Technical Skills: From top management to first line management they decrease.
-Human Skills: (ability to work well with other people) From top management to first line management they increase.
-Conceptual Skills: They stay the same across levels. |
|
|
Term
| 28. What skill is most difficult to develop? Why? |
|
Definition
-Conceptual
-Manager needs to be smart, have expertise, and takes time to develop this skill.
-Requires minimum level of mental ability and time and expertise to develop. |
|
|
Term
| 29. According to Luthans(1988), are effective managers successful managers in general? |
|
Definition
| No, effective managers were not usually promoted rapidly through the organization; the ones that networked were the people that moved up. |
|
|
Term
| 30. What percent of effective managers are successful? |
|
Definition
-10%
-To be successful, 1/3 on communication and 1/3 on networking. |
|
|
Term
| 31. On what activity do effective managers spend the majority of their time? Successful managers? |
|
Definition
-Effective managers spend most of their time on communication.
-Successful managers spend most of their time on NETWORKING. |
|
|
Term
| 32. What is the primary difference between derailed executives and executives who made it to top management, according to the Center for Creative Leadership? |
|
Definition
| -Derailed executives were insensitive to others. |
|
|
Term
| 33. What are the three basic characteristics of an open system? |
|
Definition
-Input- aquire (buying) your supplier
-Transformation
-Output |
|
|
Term
| 34. What is the cyclical nature of the nature transformation process? Negative entropy? Buffering the technical core? Role differentiation and specialization? Synergy? Equifinality? |
|
Definition
1. Cyclical Nature of the Nature Transformation Process: customers and suppliers are EQUALLY IMPORTANT (feedback loop, easy=good, hard=bad, controlling function).
2. Negative Entropy: trying to prevent the company from dying (in decline = loose market shares, hire a new CEO). Turnaround strategy
3. Buffering the Technical Core: stability in production to increase efficiency (first line responsible from transformation), (change only when necessary).
4. Role Differentiation and Specialization: AS organizations grow larger in size, the roles become more differentiated and specified.
5. Synergy: “Teamwork”; whole is greater than the sum of all its parts: 2+2=5
6. Equfinality: many roads to success (competing in different ways)
o Overall cost leadership – good quality, low price
o Differentiation – quality, design, image
o Focus – specific segment |
|
|
Term
| 35. What are the five subsystems of an organization? What functions do each subsystem perform? |
|
Definition
-Production: transform raw materials to goods and services (input/output)
-Internally oriented
-Buffers the technical core
-Boundary Spanning: buying from suppliers; selling (marketing) to customers (DEAL WITH TWO MAJOR DEPENDENCIES)
-Input: externally orients suppliers.
-Output: internally and externally orients customers. (sell)
-Adaptive: Research and development (change and adapt)
-Externally oriented – effective.
-Internally oriented – efficient.
-Maintenance: Smooth operation and upkeep of organization. Efficient
-Management: Top and Middle management (FIRST LINE ISN’T INCLUDED IN MANAGERIAL SUBSYSTEM)
-Top: plans (external) and legitimizes
-Middle: organizes into subsystems and makes sure they run properly together (internal). |
|
|
Term
| 36. What are the two major dependencies in the external environment? What is the threat to these 2 major dependencies? |
|
Definition
-Customers and Suppliers.
-Direct action components; Their biggest threat in competition.
*The watchword is quality
3 ways of superior customer service:
1. Make it easy to complain
2. Make a timely, personal response to the complaint-sundown response(resolve/respond by sundown)
3. Make sure your response is effective (actually solves the problem)
Buckingham and Coffman’s 4 levels of customer service:
1. Accuracy- expect order to be correct and price charged was the one agreed on. Lowest level(prevent dissatisfaction)
2. Availability- expect the business to be open when they can use it and or have problems(prevent dissatisfaction)
3. Partnership- want business to reach out to them, be responsive to their needs and understand their perspective(create satisfaction)
4. Advice- feel closest bond to organizations that help them learn. This is the highest level of customer service. (create satisfaction)
*Total quality management experts- estimate it cost 5 times as much to find a new customer than to keep an old one. |
|
|
Term
| 37. How do customers influence organizations and how do organizations influence customers? |
|
Definition
Organizations are driven by customer wants and needs.
-Low prices on advertising. |
|
|
Term
| 38. How much more does it cost to find a new customer than to keep an old one, according to Total Quality Management estimates? |
|
Definition
|
|
Term
| 39. How do suppliers influence organizations and how do organizations influence suppliers (i.e., 3 ways to establish and maintain a positive relationship with suppliers)? |
|
Definition
-Vertical Integration: Buy your supplier organizations (cooperation increases).
-Backwards Integration: buying up your customer organizations.
-Long-term Contracts: Lock in the supplier at a lower price.
-Reducing the Number of Suppliers: The larger volume makes a cost reduction.
-(2-3, 1 is too powerful) |
|
|
Term
| 40. What is the law of the marketplace? |
|
Definition
| -The law of the marketplace dictates that companies that cannot compete will be faced with either changing their product line or being eliminated. |
|
|
Term
-Vertical Integration: Buy your supplier organizations (cooperation increases).
-Backwards Integration: buying up your customer organizations.
-Long-term Contracts: Lock in the supplier at a lower price.
-Reducing the Number of Suppliers: The larger volume makes a cost reduction.
-(2-3, 1 is too powerful)
40. What is the law of the marketplace?
-The law of the marketplace dictates that companies that cannot compete will be faced with either changing their product line or being eliminated.
41. What are the five forces of competition and how does each influence the level of competition within an industry? |
|
Definition
-Rivalry Among Organizations: greatest at mature, low growth
-Threat of New Entrants: New entrants steal market share and drive prices down; increase resource cost, hire the market threat, hire the competition.(does not decrease power of the customer) customer has more power.
-Threat of Substitutes: Can affect what price you can charge and due to technological innovation, can make older products obsolete.
-Power of Customers: Powerful customers can cut into profitability; customers who make large purchases can drive down prices, demand higher quality and customer service.
-Power of Suppliers: Can raise prices or reduce quality of good, or stop serving you (2-3) |
|
|
Term
| 42. What are the barriers to entry into an industry? |
|
Definition
-Government Policy: Patents which keep competition out.
-Capital Requirements: High start-up costs.
-Brand Loyalty: to established companies.
-Cost Advantages: to existing customers who buy in large quantities.
-Distribution Channels: Tied up and hard to break in. |
|
|
Term
| 43. What happens when a new entrant comes into the market/industry? |
|
Definition
-Increase Competition
-Increase Product Supply
-Prices Lower
-They seek Market Share
-Make others improve quality and service |
|
|
Term
| 44. What determines if a supplier is powerful? Customer? |
|
Definition
-Suppliers: Few places to buy or if he/she has many customers
-Customers: Make large purchases or if they can easily find alternative places to buy. |
|
|
Term
| 45. How do powerful suppliers and customers influence organizations? |
|
Definition
-Powerful suppliers reduce and organization’s profits
-Powerful customers can drive prices down, and force and increase in quality and service. |
|
|
Term
| 46. How do substitutes affect an industry? |
|
Definition
-A substitute limits an industry’s growth.
-Increase competition
-Increase the power of the customer
-Make products obsolete (Technological Innovations). |
|
|
Term
| 47. What are process and product innovations? What is the focus of each? |
|
Definition
-Process: Advancement made in transformation process; more efficient (assembly line).
-Product: An innovation dealing with the product, good, or service; more effective (light beer)
-Good increases competition and creates obsolescence (GORILLA GLASS) |
|
|
Term
| 48. What are the general effects of technology on an industry? |
|
Definition
-Increases Competition
-Promotes Product Obsolescence
-You have to change your product line to meet new changes in technology, or risk dying out. (Companies like moderate, steady growth). |
|
|
Term
| 49. How does the economy influence an organization? |
|
Definition
-Indirectly by expanding economy, which raises demand and vice versa.
-Facilitates the establishment of new enterprises
-Almost always unpredictable
-Managers prefer stable economic conditions with moderate, steady growth because violent change in economic conditions can restrict business investment and growth. |
|
|
Term
| 50. What are the four ways that government influences organizations? |
|
Definition
-Regulations: Protect quality of life.
-Taxation/Subsidies: Encourage/discourage businesses (respectively).
-Direct Competition: Private vs. Government run (USPS vs. UPS)
-Economic Policy: Affect ability to thrive and prosper. |
|
|
Term
| 51. What is the shadow bureaucracy? |
|
Definition
| -For every department in an organization, there is a Federal agency governing it. Making sure you are following regulations (HR-Department of Labor, etc…) |
|
|
Term
| 52. What are the three ways organizations influence government? |
|
Definition
-Lobbying
-Direct Political Action: voting
-Illegal Activity: bribes and kickbacks.
-Vote for who holds favorable views for your organization (campaigns, form PAC’s) |
|
|
Term
| 53. What is a PAC? What are the limits regarding PAC contributions to campaigns? |
|
Definition
-Political Action Committee: formed by employees and stockholders to lobby government
-Limited to direct contributions of $5,000, but they can independently spend any amount of the campaign, known as giving “soft money.” |
|
|
Term
| 54. How does society influence business? Business influence society? |
|
Definition
-Society is made up of customers.
-Appear legitimate in society’s eyes or you do not succeed. |
|
|
Term
| 55. How does the international component of the environment influence organizations? |
|
Definition
-It is both a threat and an opportunity.
-i.e. More products competing is a threat, but outsourcing and more people buying is an opportunity.
-Be aware of the company’s culture and how they do business. |
|
|
Term
| 56. What is environmental scanning? How is it related to planning and organizational performance? |
|
Definition
-Monitor and evaluate changes and trends in the environment.
-Gather information about the environment
-The less you scan, the worse you plan and the less effective your results.
-Foundation in which planning is built. |
|
|
Term
| 57. What are the three purposes of planning? |
|
Definition
-Establish and help achieve organizational objectives (FUNDEMENTAL).
-Offset future uncertainties by reducing the risk surrounding organizational operations (DEFENSIVE).
-Affirmative (OFFENSIVE) seeking out and taking advantage of opportunities in increase organizational success. |
|
|
Term
| 58. Why is planning important? |
|
Definition
-Helps organizations succeed
-Provides and sense of unity and direction
-Helps cope with change
-Provides performance standards
-Develop managerial talent |
|
|
Term
| 59. Why do managers resist planning? |
|
Definition
-It is HARD WORK
-It can be used to measure results (underperforming managers)
-Takes time and in expensive
-Fear of failure
-Lack of immediate feedback
-Involves change
-Not rewarded by organization |
|
|
Term
| 60. What is Gresham's law of planning? |
|
Definition
| -Even when managers have the best intentions of planning, the day-to-day problems tend to overshadow planning problems (have wrong priorities). |
|
|
Term
| 61. What does the non-planner typically blame for his/her poor performance? |
|
Definition
| BAD LUCK: external Locus of control. |
|
|
Term
| 62. What are the five phases of the planning process and what happens at each phase? |
|
Definition
-Establishing Objectives: What do you want to do? Begin with the end in mind.
-Developing Premises: What factors are going to affect goal achievement? “Forecasting”
-Decision-Making: Select the best course of action to accomplish objectives set in Phase 1.
-Implementing a Course of Action: Assign and direct personnel to carryout the plan.
-The best plans are unlikely to succeed if they are poorly implemented.
-Evaluating Results: Compare actual results with “hoped for” results; get FEEDBACK. |
|
|
Term
| 63. What provides the basis for Phase 1: Establishing Objectives? |
|
Definition
-Environment scans –> avoid threats and exploit opportunities.
-If your scanning is faulty, then your planning will be faulty. |
|
|
Term
| 64. What are SMART goals? (substitute: SMAIT goals) |
|
Definition
-Specific: what’s desired and when?
-Measurable: for feedback
-Achievable: yet challenging
-Relevant: (alternative is Important)
-Trackable: (like controlling)
-M and T are most directly related. |
|
|
Term
| 65. What is contingency planning? What are the benefits and drawbacks? |
|
Definition
-When one (company) develops multiple future scenarios and the plans to accomplish each scenario. This is known as contingency planning or “what-if” planning. They allow you to act on any given situation but require time to build.
-Three aspects of decision-making…
-Identify alternatives
-Evaluate alternatives
-Select course of action |
|
|
Term
| 66. What are the keys to effective implementation of a plan? |
|
Definition
-Tied to a Budgetary System: make sure you have the resources to carryout a clearly communicative plan, make sure people understand the plan (What, Why, How they will help).
-Motivate employees with WIFM (What’s In it For Me?) |
|
|
Term
| 67. What function of management is Phase 5: Evaluating Results? |
|
Definition
|
|
Term
| 68. What is the basic dilemma in planning? |
|
Definition
-As commitment increases, willingness to change decreases
-Commitment can make you less flexible. |
|
|
Term
| 69. What are the different failures to avoid in planning? Be able to identify. |
|
Definition
-Top-Down Delegation: Take advantage of threats and avoid the opportunities.
-Key-Line Managers Left Out: They have to implement the plan, so include them.
-Lack of Supportive Environment: Time, training, money, resources, rewards, why do it?
-Plans are Too Rigid and Complex: KISMIF- keep it simple, make it fun!
-Failure to Manage Your Plan: failure to implement and evaluate it
-A bad plan admits no modification
-Getting Bogged Down in the Details of Planning: Get caught up in the thrill of predicting the future.
-Unrealistic Expectations: expectations are unachievable. |
|
|
Term
| What is the crystal ball syndrome? Cure-all syndrome? Persian messenger syndrome? |
|
Definition
-Crystal Ball Syndrome: believing that planning is solely about predicting the future; neglects implementation and evaluation (same as failure to manage your plan).
-Cure-all Syndrome: planning should cure all (panacea) problems => WRONG!
-Persian Messenger Syndrome: kill the messenger; neglects evaluating results because there is no feedback; when you punish the person who brings the bad news, they are less likely to come see you next time. Instead, you should reward this person for their fair evaluation because it helps keep the plan in line. (When someone comes to you with a problem, ask him or her for a solution so you don’t end up doing their work for them) (Failure to evaluate results). |
|
|
Term
| 71. What is the focus of strategic planning? |
|
Definition
| -Establish and maintain a positive long-term relationship with the organization’s external environment. |
|
|
Term
| 72. What are the four components of a well-thought out strategy? Be able to identify. |
|
Definition
-Scope: Where the organization in going to compete; which range of markets do you want to to business in? (Mars vs. Hershey’s)
-Resource Deployment: How to allocate your resources to achieve the goals
-{Cash cows for new ventures}
-Use profits from its “bread and butter” areas to finance new ventures.
-Distinctive Competence: Competitive advantage; strength sets you off from competition. What is the company good at? (Wal-Mart: cost, limited-speed).
-Synergy: Different aspects of the company complement each other, (Disney: parks, TV, movies) |
|
|
Term
| 73. What is corporate strategy and business level strategy? |
|
Definition
-Corporate: What businesses you want to own (increase market share and profitability) 1 strategy
-Focus on scope and resource development
-Business: How you plan on competing with each business; multiple strategies.
-Focus on competitive advantage and synergy (distinctive competence). |
|
|
Term
| 74. What are the four elements of strategy formulation and what does each element consist of? |
|
Definition
-Analysis of the Organization’s Missions and Objectives: What is its purpose?
-Analysis of the Environment: What are the threats and opportunities?
-Analysis of the Organization: What are its strengths and weaknesses?
-Analysis of Managerial Values: What’s the corporate culture? |
|
|
Term
| 75. What are benefits of a mission statement? |
|
Definition
|
|
Term
| 76. What is a SWOT analysis? |
|
Definition
| -Strengths, Weaknesses, Opportunities, and Threats |
|
|
Term
| 77. What is the goal of the Business Portfolio Matrix Approach? |
|
Definition
| -Own that mix of businesses that will maximize market share and profitability. |
|
|
Term
| 78. What levels of strategy does the Business Portfolio Matrix Approach deal with? |
|
Definition
| -Both corporate and business level |
|
|
Term
| 79. How are SBUs classified in the Business Portfolio Matrix Approach? (Strategic Business Unit) |
|
Definition
-Based on market share (x-axis) and market growth (y-axis) and therefore, will determine how we deal with them.
- Strategic Business Units: businesses that we own. |
|
|
Term
| 80. What business strategy is used for a cash cow? Star? Dog? New Venture? |
|
Definition
-Star: High market share and high growth; invest all your money to grow market share before it matures.
-Market share is our number one strategy.
-Cash Hog
-Cash Cow: High market share and low growth; makes huge profits; invest minimum amount needed to keep market share at stable growth.
-Dog: Low market share and low growth; keep them if they are profitable (retrenchment), but as soon as they start to loose money, get rid of them (divest) to make more profit.
-Retrenchment= cutting off, by reduction of expenses.
-New Venture: Low market share and high growth; if you think it could become a Star, invest heavily…if not, get rid of it (cash hog) – give you forecast. |
|
|
Term
| 81. What is the basic idea behind Generic Strategies? |
|
Definition
| -The term generic strategies are used because these strategies can be applied to a wide variety of industries. Porter believes that top managers should develop a feel for their industries and then define a competitive niche by adopting one of these three strategies. |
|
|
Term
| 82. What are the three Generic Strategies identified by Porter? Be able to identify. |
|
Definition
-Differentiation: Make an image that your product is different from all others (in terms of quality, design, and future services) so you can demand a high price (i.e. Rolex, Mercedes-Benz)
-Cost Leadership: Maximize sales by minimizing the cost per unit and your prices (Wal-Mart).
-Focus: Concentrate your efforts on a specific group, product, or geographical location.
-Turn attention to a specific segment of the overall market. |
|
|
Term
| 83. What is the basic idea behind the Adaptation model of strategy? |
|
Definition
| -Organization’s strategy must be aligned with its external environment for the organization to be effective (business level strategy). |
|
|
Term
| 84. What is a defender? Prospector? Analyzer? Reactor? When is a defender strategy the best? Prospector? Analyzer? Reactor? |
|
Definition
-Defender: Demand for their products is not growing; stable environment; effective production; many rules and regulations (fast-food restaurants) – worst in dynamic.
-CASH COWS
-Prospector: Demand is growing, expansion; develop and innovate; few rules and regulations; creativity, dynamic. – Worst in stable
-NEW VENTURES or STARS
-Analyzer: Environment moderately changing, combination strategy in name only.
-ALL STRATEGIES EXCEPT DOG.
-Reactor: Worst strategy!!! Reacts to the environment; no set strategy; no set production process or organization design…inefficient (K-Mart). |
|
|
Term
| 85. How does each strategy type in the Adaptation Model answer the entrepreneurial (ENT), engineering (ENG), and administrative questions (ADM)? |
|
Definition
-Defender:
-ENT: Seal off market share (defend market share) through overall cost leadership (lower prices). Stable growth strategy.
-ENG: Efficient production (to lower cost per unit/price)
-ADM: Tight control (stay within the budget, a lot of cost controls, etc.) Centralized decision-making.
-Analyzer:
-ENT: To defend market share with some products and innovate with other products. Scan for new opportunities while protecting current position.
-ENG: Efficient production for some products and flexibility for new lines.
-ADM: Tight control over old lines and loose control over new lines. Centralized decision-making for old lines and decentralized for new lines.
- Prospector:
-ENT: Find and exploit new markets (prospect). Scan the environment constantly for new opportunities.
-ENG: Flexible production. Don’t get tied to one technology or invest heavily into a certain production system.
-ADM: Loose control to encourage innovation, coordination, and creativity. Decentralized decision-making.
-Reactor: Worst strategy, reacts to environment. No set strategy. Therefore, no set production process or organizational design. Answers to ENT, ENG, and ADM are always changing, INEFFICIENT. |
|
|
Term
| 86. How are the strategies in the Business Portfolio Matrix Approach and the Adaptation Model of Strategy related to one another? |
|
Definition
-Defender: Cash Cow
-Prospector: New Venture and Star
-Analyzer: Cash Cow, New Venture, and Star
-Reactor: Dog, but not ALL Dogs are reactors. |
|
|
Term
| 87. What does the article, “When competitive advantage is neither,” say about competitive benchmarking as a strategy? |
|
Definition
-It could actually cost you market share and profitability, you beat the competition, but you forget about the customer.
-Value innovation: innovating on what the customer wants.
-Companies are so caught up with competing between themselves, sometimes the customers’ wants and needs fall through the cracks, and end up just imitating their competitor’s products. |
|
|
Term
| 88. What does the article, “Avoid pricing yourself short”; say about competing on price as a strategy for attracting customers? |
|
Definition
-If you price your products at too low have a price, then your customers might associate this with inferior quality, or bad customer service.
-If you claim to have excellent prices, great customer service, and high quality, then customers might distrust you, because they know, consciously or subconsciously, that you are most likely lying.
-$65 saddle for Arabian horses (high-end breed, with wealthy owners) weren’t selling well. Owner raised the price to $250, and he/she not only made more revenue, but actually sold more units of the product, because of a perceived higher quality to coincide with the higher price.
-Quality, price, service (you can only have two, not all three) |
|
|
