Strategy
What does PESTEL stand for?
Political, Economic, Social, Technological, Environmental, and Legal.
What strategy combines cost-leadership and differentiation?
Blue-ocean Strategy
What does Porter's 5 Forces framework analyse?
Industry profitability
What are the four main types of innovation?
Incremental, radical, disruptive, and architectural.
What are economies of scale?
Decrease in cost per unit as the output increases
What type of innovation improves an existing product rather than creating something entirely new?
Incremental
Which force (Porters 5 forces) examines how easy it is for new companies to enter an industry?
Threat of new entrants
What are the three key decisions in corporate strategy?
Industry value chain, product diversification, and geography.
What is a competitive parity?
The performance of two or more firms are at the same level
What is strategic outsourcing?
Moving one or more activities of the internal value chain to other firms. This will reduce the firms level of vertical integration
What is the name of the effect where a product gains more value as more people use it?
Positive network effect.
What is a black swan event?
Events that are highly improbable but have a huge impact
What is scenario planning?
A strategic planning activity in which top management envisions different what-if scenarios to anticipate possible future situations in order to prepare strategic responses for those situations.
What are the three dimensions of the triple bottom line?
Profits, planet and people
The shakeout stage
What is a razor-razor-blades business model?
The initial product is sold at a low price to drive demand for the complementary goods. The company makes money from the replacement parts and not from the initial product
What is the producer surplus?
The profit: the difference between the price charged and the cost to produce
What framework evaluates firm resources' ability to sustain a competitive advantage over time?
The VRIO framework
Which force (Porters 5 forces) is strongest in the airline industry, making it hard to be profitable?
Rivalry among existing competitors: intense price wars, low differentiation.
What are the four strategic options leaders have in the decline stage of the ILC?
Exit, harvest, maintain and consolidate