Zero-sum relationship among stakeholders
Emphasizing financial returns
Using surveys to get supplier input.
Using multiple sources for a firm's raw material inputs.
Tapping the latent talent of the online crowd.
Addressing strategic issues directly with managers and employees.
Quarterly and annual filings of financial information
Stock trading by insiders
Details of new products under development
Details of executive compensation packages
Remained the same
No correlation when
Incumbent firms are constantly seeking opportunities to specialize in market niches.
Differentiation strategies are often too expensive to enact.
It may be difficult for a young firm to establish a strong brand identity.
Implementing superior new technologies may be challenging for entrepreneurial firms.
Higher prices in their domestic markets.
Economies of scale.
Optimizing the location for many activities in their value chain.
Reducing their exposure to currency risks.
Macroeconomic, sociocultural, political/legal
Macroeconomic, political/legal, macroeconomic
Macroeconomic, technological, macroeconomic
Macroeconomic, global, macroeconomic
Strategic alliances; joint ventures, internal development
Internal development; mergers; acquisitions
Strategic alliances; mergers; joint ventures
Mergers; internal development; strategic alliances
They represent a poor means of influencing an organization’s culture
They focus efforts on high-priority tasks
They motivate high levels of individual and collective task performance
They represent an effective control mechanism
Developing human capital
Developing social networks
Decreasing labor intensive training
Leveraging organizational structure
It produces relatively large, positive cash flows.
Strong brand recognition seldom serves as an important switching cost.
Market share gains by pioneers are usually easily sustained for many years
Products or services offered by pioneers may be perceived as differentiated simply because they are new.
By employing JIT inventory systems, Hewlett Packard has been able to cut lead time from five days to one
Motorola has revised its compensation system to reward employees who learn a variety of skills
National Steel improved its efficiency by consolidating, reducing the number of job classifications, and broadening worker responsibilities.
Walmart implemented a sophisticated information system that resulted in reduced inventory carrying costs and shortened customer response times.
“In a highly competitive marketplace, firms must be paranoid about the multitude of potential rivals.”
“You can afford to ignore rivals in small markets, but you can never ignore rivals in large markets, such as online video companies like YouTube.”
“There are tens and maybe hundreds of start-ups who think that they are going to eat Netflix’s lunch. The challenge for a management team is to figure out which are real threats and which aren’t.”
“Netflix’s position is so strong that I don’t worry about new entrants.”
Lower sales abroad because foreign customers cannot afford McDonald’s products.
More transfer of ingredients from the U.S. to branches abroad to take advantage of the higher dollar.
Lower profits, because foreign profits will be reduced when measured in dollars.
No impact at all.
A tactical action because the move is an attempt to fill a gap in service
A strategic action because such a large plant expansion will require a major commitment of resources.
A strategic action because the firm can easily reverse the action at any time, thus giving Cirrus more strategic flexibility.
Botch B & C above.
It is a key catalyst for an ongoing debate about underlying data, assumptions, and action plans.
It must focus on constantly changing information that is strategically important.
It circumvents the need for face-to-face meetings among superiors, subordinates, and peers.
It generates information that is important enough to demand regular and frequent attention.
Encouraging employee identification with organizational missions and goals.
Requiring employees to sign agreements that prevent them from working for competitors in the future
Providing employees with a challenging and stimulating work environment
Providing employees with financial and non-financial rewards and incentives
Enabling managers to focus their efforts more directly on the firm’s core businesses.
Providing the firm with more resources to spend on more attractive alternatives.
Raising cash to help fund existing businesses.
All of the above.
Negotiating and maintaining ongoing relations with regulatory bodies.
Effective information systems contributing significantly to a firm’s overall cost leadership strategy.
Marketing expertise increasing a firm’s revenues and enabling it to enter new markets.
Top management providing a key role in collaborating with important customers.
Overall cost leadership
Incumbent firms are entering market segments that they previously considered to be too small.
Nearly all competitors will have greater access to tools for managing costs making it hard for any one to achieve an advantage.
Differentiators have been able to preserve the unique advantages that have always been the hallmark of their success.
Firms are ignoring opportunities to offer high-end services in niche markets.
Is the organization “doing things right”?
Is the organization “doing the right things”?
Are rules and regulations being followed as information is processed?
Is the organization’s environment a necessary and sufficient condition for success?
Resource acquisition argument
Similarity in Perspectives Argument
How dependent the competitor is on that industry or particular market segment
The degree of market power and reputation of the company that initiated the attack
The resources which are available for a firm to respond.
The stock market reaction to the initial competitive attack.
Firms that fail to attain both strategies may end up with neither and become “stuck-in-the-middle.”
Targeting too large a market that causes unit costs to increase.
Underestimating the challenges and expenses associated with coordinating value-creating activities in the extended value chain.
Miscalculating sources of revenue and profit pools in the firm’s industry
Transaction costs are higher than internal administrative costs.
Internal administrative costs are higher than transaction costs.
Transaction costs and internal administrative costs are equal.
Search costs are higher than monitoring costs.