Fluent Essays

Provide an example to explain further of the management skills. there are total 17 questions. Provide an example and explain a little bit for each oneFinal Study guide Chapter 7-12 Winter 21 Chapter 7 - Innovation 1. Understand the stages of innovation process. The 4 I’s… 2. Understand industry life cycles from intro to decline 3. Understand the “crossing the chasm” framework and how that impact strategy with each market and stage in the industry life cycle. 4. Understand the 4 different types of innovations in the markets-and-technology framework. (incremental, radical, architectural, disruptive) Chapter 8- Vertical Integration and Diversification 5. Know the difference between Business Strategy, (how) and Corporate Strategy, (where). Define the three “boundaries” or dimensions of which it is accessed; (1) industry value chain, (2) products and services, and (3) geography (regional, national, or global markets). And understand which of those dimensions is addressed by either Vertical Integration or Diversification 6. Understand the purpose of the Value Chain and how it is used in vertical integration 7. Describe and evaluate different types of corporate diversification, (Single business, dominant, related and unrelated) 8. Understand the BCG matrix and how the tool is used to determine a firm’s SBU’s and portfolio of products. Invest/Build, Harvest/Divest, Hold Chapter 9 – Mergers/Acquisitions 9. Understand the difference between mergers and acquisitions, and explain why firms would use either as a vehicle for corporate strategy. There are 3 main reasons. 10. Understand the Build, Borrow or Buy framework and how it impacts decisions for firms. 11. Understand the difference between the Strategic Alliance options, (Non-equity, Equity, Joint Venture) Chapter 10 - Globalization 12. Explain why companies compete abroad, and evaluate the advantages and disadvantages of a global strategy 13. Understand the 4 strategies MNEs can pursue when competing globally. 14. Understand the 4 components that make up the CAGE framework in determining whether or not a company should expand globally. CAGE helps determine the attractiveness of foreign target. Most of the costs and risks involved in expanding beyond the domestic market are created by distance. Chapter 11-Organizational Design 15. Organizational design is the process of creating, implementing, monitoring, and modifying the structure, processes, and procedures of an organization. Understand and explain the three key components (Structure, Culture and Control) Chapter 12-Ethics and Governance 16. Understand the shared value framework as identified by Michael Porter. 17. Understand how ethics impact a companyChapter 11 Organizational Design: Structure, Culture, and Control © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Because learning changes everything.® 1 The AFI Strategy Framework 2 Because learning changes everything.® Learning Objectives Define organizational design and list its three components. Explain how organizational inertia can lead established firms to failure. Define organizational structure and describe its four elements. Compare and contrast mechanistic versus organic organizations. Describe different organizational structures and match them with appropriate strategies. Evaluate closed and open innovation, and derive implications for organizational structure. Describe the elements of organizational culture, and explain where organizational cultures can come from and how they can be changed. Compare and contrast different strategic control-and-reward systems. © McGraw Hill 3 Case Study 4 © McGraw Hill Zappos 10 Core Values Deliver WOW Through Service Embrace and Drive Change Create Fun and A Little Weirdness Be Adventurous, Creative, and Open-Minded Pursue Growth and Learning Build Open and Honest Relationships With Communication Build a Positive Team and Family Spirit Do More With Less Be Passionate and Determined Be Humble 5 © McGraw Hill How specifically do these values support the strategy? Do they think that these values would be helpful in attracting the type of employee that Zappos needs to gain and sustain a competitive advantage? 5 Zappos Designed to Deliver Happiness Exceptional Customer Service → Core Competency All customer service is done in-house. No scripts or timed calls in the call centers Keep its own stocked products… no drop-shipment Flat Organizational Structure = Flexibility Job rotation = widely trained talent Internal promotion opportunities Reorganized into 10 business units to manage growth 6 © McGraw Hill Founder Tony Hsieh, (shay) created a culture of making customers and employees happy which helps drive success. Acquired by Amazon in 2009 for $1.2B and acts as a separate business unit. To achieve the strategic objective, Zappos developed a set of values and integrated them into the company’s culture. This culture can provide behavior guidelines once the employees internalize the culture. How does Zappos deliver WOW to customers? Zappos has a 365-day no-hassle return policy, free upgrades to express shipping, and courteous and helpful customer representatives, all of which help make customers very happy. Flexibility…Unlike other online retailers, Zappos stocks everything it sells in its own warehouses—this is the only way to get the merchandise as quickly as possible with 100 percent accuracy to the customer. Strategy, therefore, is as much about deciding what to do as it is about deciding what nChapter 9 Corporate Strategy: Strategic Alliances, Mergers and Acquisitions © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Because learning changes everything.® The AFI Strategy Framework 2 Because learning changes everything.® Learning Objectives Apply the build-borrow-or-buy framework to guide corporate strategy. Define strategic alliances, and explain why they are important to implement corporate strategy and why firms enter into them. Describe three alliance governance mechanisms and evaluate their pros and cons. Differentiate between mergers and acquisitions, and explain why firms would use either to execute corporate strategy. Define horizontal integration and evaluate the advantages and disadvantages of this option to execute corporate-level strategy. Explain why firms engage in acquisitions. Evaluate whether mergers and acquisitions lead to competitive advantage. © McGraw Hill How was built 4 © McGraw Hill How was built 5 © McGraw Hill What you had was a combination of Mergers and Acquisitions, as well as Joint Ventures to build this Fortune 50 company. 5 How Firms Achieve Growth A strategist has three options to drive firm growth: Organic growth through internal development External growth through alliances External growth through acquisition The build-borrow-or-buy framework: Aids strategists in deciding whether to pursue internal development (build) Enter a contract arrangement or strategic alliance (borrow) Acquire new resources, capabilities, and competencies (buy) © McGraw Hill When acquiring a firm, you buy an entire “resource bundle,” not just a specific resource. This resource bundle, if obeying VRIO principles and successfully integrated, can then form the basis of competitive advantage. 6 Guiding Corporate Strategy: The Build-Borrow-or-Buy Framework . © McGraw Hill 7 Main Issues in the Build-Borrow-Buy Framework Relevancy: Can the firm’s existing internal resources solve the resource gap? Tradability: How tradable are the targeted resources that may be available externally? Closeness: How close do you need to be to your external resource partner? Integration: How well can you integrate the targeted firm into your firm? © McGraw Hill As shown in Exhibit 9.1, the answers to these questions lead to a recommended action or the next question. 8 Relevance/Tradability Relevance…Are the firm’s internal resources highly relevant? If so, the firm should develop internally. Internal resources are relevant if: They are similar to those the firm needs. They are superior to those of competitors. They pass the VRIO Framework Tradability…The firm creates a contract to: Transfer ownership Allow use of the resource Contracts support borrowing resources Ex. Licensing and franchising © McGrChapter 7 Business Strategy: Innovation, Entrepreneurship, and Platforms © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Because learning changes everything.® Learning Objectives Outline the four-step innovation process from idea to imitation. Apply strategic management concepts to entrepreneurship and innovation. Describe the competitive implications of different stages in the industry life cycle. Derive strategic implications of the crossing-the-chasm framework. Categorize different types of innovations in the markets-and-technology framework. Explain why and how platform businesses can outperform pipeline businesses. © McGraw Hill The AFI Strategy Framework 3 © McGraw Hill Innovation Is a Competitive Weapon Innovation can create and destroy value. Innovation often comes in waves: Many firms dominated an early wave of innovation and are challenged by the next wave. Traditional networks vs. cable providers. Cable providers vs. streaming content. Typewriters to PC’s to mobile devices. “Creative destruction” – Joseph Schumpeter © McGraw Hill Initial innovations are foundational for other rapid innovation. Disruption video: https://hbr.org/video/2688242135001/the-explainer-disruptive-innovation 4 Case Study: Netflix - Disrupter of Cable TV Founded in 1997 by Reed Hastings with online rentals of DVD’s via the mail, (because Blockbuster pissed him off over $40 in late fees). 1999: moved to unlimited DVD rental for one monthly rate 2000 approached BB to become their online partner, BB declined 2002 Netflix turned profitable, went public 2004 4M subscribers, (BB started online, but lost 75\% of market share, Bk by 2010) 2007: Streaming content over the internet,12M subscribers 2010: Not viewed as a threat by TV, “rerun TV”…Hulu 2013: Started streaming online original content: (House of Card, Orange is the New Black, The Crown) 2017: 100M worldwide subscribers, $9B in Revenue, $60B Market Cap, Stock up 4200\% 2020: Market Cap $230B, 73M US subscribers, 167M worldwide, (Covid related?) 5 © McGraw Hill Case Study: Netflix - Disrupter of Cable TV How did they disrupt? Delivery of content streamed online, bypassing networks/cable, less $$$ Access created “binge watching”, create demand and buzz, older movies/TV shows Management via algorithms, no “pilots” needed 6 © McGraw Hill Users build movie queues, which allowed future demand. Personalized recommendation engine allows for “older” content to be requested, lowering demand on new, but providing fresh revenues to other studios, (until everyone else wants into the game). 6 Case Study: vs. Disney enters streaming services with intro price of $6.99/mo, undercutting Netflix, (free for VzW customers). Removes Disney content from Netflix, (Disney movie library, Marvel, Star Wars, etc…) AddChapter 8 Corporate Strategy: Vertical Integration and Diversification © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Because learning changes everything.® 1 The AFI Strategy Framework 2 Because learning changes everything.® Learning Objectives Define corporate strategy and describe the three dimensions along which it is assessed. Describe the two types of vertical integration along the industry value chain: backward and forward vertical integration. Identify and evaluate benefits and risks of vertical integration. Describe and evaluate different types of corporate diversification. Apply the core competence-market matrix to derive different diversification strategies. Explain when a diversification strategy creates a competitive advantage and when it does not. © McGraw Hill 3 Case Study - Amazon 4 © McGraw Hill The Chapter Case discusses Amazon’s diversification over time. Bezos also decided to customize certain country-specific websites despite the instant global reach of ecommerce firms. With this strategic decision, he decided where to compete globally in terms of different geographies beyond the United States. In short, Bezos determined where Amazon competes geographically (question 3). 4 Amazon’s Corporate Strategy Originally was an online book seller: Started in a garage in a Seattle suburb. Then entered strategic alliances to expand products offered. Is now a widely diversified technology company. Amazon has diversified: Prime Air uses drones to drop off packages. Amazon Campus, co-branded University websites. Electronics such as Echo, Alexa. Continues to innovate: In a competitive battle with Apple, Facebook, Alphabet, Walmart, and Alibaba. 2017 acquisition of Whole Foods. Streaming content. Amazon Web Services. © McGraw Hill 5 What’s next? 6 © McGraw Hill 6 Why Firms Need to Grow To increase profits and shareholder returns. To lower costs and achieve economies of scale. To increase market power. To reduce risk through diversification. To motivate management. © McGraw Hill Increase profits – results in shareholder returns. Lower costs – growth enables efficiency. Increase market power – fewer competitors, more bargaining power, higher profitability. Reduce risk – low performance in one SBU can be compensated by another. Motivate management – job security. 7 Corporate Strategy The decisions and goal-directed actions that leaders make to address the quest for competitive advantage while competing in multiple markets and industries simultaneously…whew! It answers the question: where to compete? It addressed the boundaries of the firm: Vertical integration. Diversification. Geographic scope. © McGraw Hill Vertical integration: In what stages of the industry value chain should tChapter 12 Corporate Governance and Business Ethics © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Because learning changes everything.® 1 The AFI Strategy Framework 2 Because learning changes everything.® Learning Objectives Describe the shared value creation framework and its relationship to competitive advantage. Explain the role of corporate governance. Apply agency theory to explain why and how companies use governance mechanisms to align interests of principals and agents. Evaluate the board of directors as the central governance mechanism for public stock companies. Evaluate other governance mechanisms. Explain the relationship between strategy and business ethics. © McGraw Hill Case Study-Uber Travis Kalanick founded the company in 2009 in SF Disrupted taxi service as “ride hailing” Market cap of $70B in 2017 Hertz w/ 500M cars, 150k employees = 1\% of that value Avoids the taxes of other cab companies Gig economy job = freedom, but not benefits Forced to resign in 2017 after fallout from investigation and video of him going off on Uber driver. 4 © McGraw Hill New CEO, Dara Khosrowshahi formerly of Expedia…apology tour. 4 Case Study -Uber Ethically Challenged? Early disregard for laws, rules and regulations Dynamic pricing Punking the competition Punking their own drivers Attacking critics Culture of sexual harassment/gender discrimination Waymo lawsuit 5 © McGraw Hill Flaunting local laws and ignoring injunctions Surge pricing vs. price gouging, (snowstorms, etc)…matching supply with demand. Uber ordered Lyft rides and then cancelled, causing lost business from legitimate customers Lied to their drivers about laws preventing drivers from working for both Lyft and Uber Poached/targeted Lyft drivers Google’s sued Uber for trade secret theft. Waymo alleged one of its former engineers stole confidential trade secrets before leaving to form his own startup, Otto, in 2016. Waymo alleged Uber used that information to help advance Ubers self-driving tech once Otto was acquired in August 2016. 5 Public Stock Company: Four Benefits Limited liability for investors. Transferability of investor ownership through stock. Legal personality, with rights and obligations. Separation of legal ownership and management control. 6 © McGraw Hill Only liable for what you invest Easily transfer of stocks Public domain vs. family run…public firms has rights and obligations Stockholders are owners who delegate authority. For publicly held firms, in particular, it is important for management to keep in mind that it is acting as stewards for other people’s money and has public responsibilities. 6 The Public Stock Company: Hierarchy of Authority Exhibit 12.1 Access the text alternate for slide image. © McGraw Hill 7 Two Viewpoints Chapter 10 Global Strategy: Competing Around the World © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Because learning changes everything.® The AFI Strategy Framework 2 Because learning changes everything.® Learning Objectives Define globalization, multinational enterprise (MNE), foreign direct investment (FDI), and global strategy. Explain why companies compete abroad and evaluate the advantages and disadvantages of going global. Apply the CAGE distance framework to guide MNE decisions on which countries to enter. Compare and contrast the different options MNEs have to enter foreign markets. Apply the integration-responsiveness framework to evaluate the four different strategies MNEs can pursue when competing globally. Apply Porter’s diamond framework to explain why certain industries are more competitive in specific nations than in others. © McGraw Hill Hollywood and Globalization Hollywood movie: The quintessential American product However, non-U.S. sales increased: 50\% in 2000, 70\% in 2012, but slowing in 2016, (accounted for $39B in sales) Altered global strategic focus Movies that fit the global market by adapting foreign scripts, hiring international actors/actresses Two versions of Iron Man 3 in 2013 (one just for China) Treat emerging markets as focal targets Not just filmmaking industries, but also electronics industry (ex: Korea, China), and auto industry (ex: India) 4 © McGraw Hill All Time World Box Office 5 © McGraw Hill 2018 Operation Red Sea $1.5M in US, $579M in China Avenger End Game, Domestic: $858,373,000   30.7\%+ Foreign: $1,937,901,401   69.3\%= Worldwide: $2,796,274,401  5 What is Globalization? A process… …that provides closer integration and exchange… …between countries and peoples worldwide. Made possible by: Falling trade and investment barriers. Advances in telecommunications. Reductions in transportation costs. Importance of MNEs and FDIs © McGraw Hill Combined, these factors reduce the costs of doing business around the world, opening the doors to a much larger market than any one home country. Globalization also allows companies to source supplies at lower costs, to learn new competencies, and to further differentiate products. Consequently, the world’s market economies are becoming more integrated and interdependent. 6 Global Strategy Part of a firm’s corporate strategy to: Gain and sustain a competitive advantage. Compete against foreign and domestic companies. Foreign direct investment: Investments in value chain activities abroad. Multinational enterprise: Deploys resources and capabilities in two countries or more. © McGraw Hill Instructors can ask students where their sneakers (especially Nike) are being made. The answer will highly likely be a place outside the U.S., and mostChapter 11 Organizational Design: Structure, Culture, and Control © 2021 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Because learning changes everything.® 1 The AFI Strategy Framework 2 Because learning changes everything.® Learning Objectives Define organizational design and list its three components. Explain how organizational inertia can lead established firms to failure. Define organizational structure and describe its four elements. Compare and contrast mechanistic versus organic organizations. Describe different organizational structures and match them with appropriate strategies. Evaluate closed and open innovation, and derive implications for organizational structure. Describe the elements of organizational culture, and explain where organizational cultures can come from and how they can be changed. Compare and contrast different strategic control-and-reward systems. © McGraw Hill 3 Case Study 4 © McGraw Hill Zappos 10 Core Values Deliver WOW Through Service Embrace and Drive Change Create Fun and A Little Weirdness Be Adventurous, Creative, and Open-Minded Pursue Growth and Learning Build Open and Honest Relationships With Communication Build a Positive Team and Family Spirit Do More With Less Be Passionate and Determined Be Humble 5 © McGraw Hill How specifically do these values support the strategy? Do they think that these values would be helpful in attracting the type of employee that Zappos needs to gain and sustain a competitive advantage? 5 Zappos Designed to Deliver Happiness Exceptional Customer Service → Core Competency All customer service is done in-house. No scripts or timed calls in the call centers Keep its own stocked products… no drop-shipment Flat Organizational Structure = Flexibility Job rotation = widely trained talent Internal promotion opportunities Reorganized into 10 business units to manage growth 6 © McGraw Hill Founder Tony Hsieh, (shay) created a culture of making customers and employees happy which helps drive success. Acquired by Amazon in 2009 for $1.2B and acts as a separate business unit. To achieve the strategic objective, Zappos developed a set of values and integrated them into the company’s culture. This culture can provide behavior guidelines once the employees internalize the culture. How does Zappos deliver WOW to customers? Zappos has a 365-day no-hassle return policy, free upgrades to express shipping, and courteous and helpful customer representatives, all of which help make customers very happy. Flexibility…Unlike other online retailers, Zappos stocks everything it sells in its own warehouses—this is the only way to get the merchandise as quickly as possible with 100 percent accuracy to the customer. Strategy, therefore, is as much about deciding what to do as it is about deciding what n