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Business-Level strategies tend to stress strategy as a...
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Business and corporate strategy are core elements of strategic management. In which parts splits strategic management on the conceptual level?
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Corporate Level and Business Level
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Industry Level and Business Level
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Product and Service Level
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Business-Level strategies tend to stress strategy as a...
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At the corporate level and business level are a few strategic decisions to make that lead to an advantage and the end to success. What Strategic Decision do we mean?
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The strategy implementation sees strategy as "plan". What are the 4 components that describe the "plan"?
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Developing structures and systems to support the strategy
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Converting strategy into operational plans
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Making people act according to the strategy
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Controlling realisation
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External Analysis / Internal Analysis
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Strategic decision: Choose a set of strategic measures
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Evaluation all strategic measures
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Which advantages could be achieved after successful strategic decisions?
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Parenting advantage
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Competitive advantage
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Comparative advantage
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Globalization Advantage
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The dominant perspective is that strategy is a plan, developed and realized in a systematic way. What are the components of the process of strategic management?
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Market- and resource-based view are core theoretical perspectives that guide strategic management. These two approaches are the theoretical explanations for high/superior performance.
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Market- and resource-based view are core theoretical perspectives that guide strategic management. These two approaches are the theoretical explanations for low performance.
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Describe the Market-Based View:
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Structure-Conduct Performance Paradigm as basis
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Market power as lever to improve performance of diversified companies
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Transfer of valuable resources and capabilities between business units (synergies) as basis
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Synergy management as lever to improve performance of diversified companies
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Describe the Resource-Based View:
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Transfer of valuable resources and capabilities between business units (synergies) as basis
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Synergy management as lever to improve performance of diversified companies
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Structure-Resource Performance Paradigm as lower basis
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Market imperfection as a non central assumption
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What led the shared value concept to this dominance in companies?
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What does the term "Strategy" mean (Munzberg)?
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Perspective
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Position
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Play
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Pattern
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Plan
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Playboy
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Primary lead
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Priority
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The shareholder value concept is still guiding strategic decisions. The perspective is that the firm exists as a coalition of groups acting in joint of interest.
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The shareholder value concept is still guiding strategic decisions. The perspective is that the firm exists to create wealth for its owners.
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The shareholder value concept is still guiding strategic decisions. The definition of the business success leads to maximizing the differential between the benefits and costs of all groups.
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The shareholder value concept is still guiding strategic decisions. The definition of the business success leads to maximizing the future discounted cash flows to owners.
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What are the players in the stakeholder value concept?
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Shareholder
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Financier
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Customer
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Society
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Government
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Supplier
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What are profitability figures for a firm in the financial statement?
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EBITA
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EBIT
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EBT
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Depreciation
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Cash Flow
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Labor Costs
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Determine the components of the triangle, which is the basis for all considerations around strategies in corporates.
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Operating Business
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Investment
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Financing
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Equity
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Capital stock
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What are the components of the balance sheet?
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Fixed Assets (Intangible-, Tangible Fixes Asstes, Long Termn financial assets)
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Current Assets ( Inventories, Receivables and other assets, Securities, Currencies)
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Equity (Subscribed capital, Capital reserves, Revenue reserves, Retained Profits / Accumulated losses brought forward, Net Income)
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Capital Stock (Provisions, Liabilities)
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Equity (Provisions, Liabilities, Revenue reserves, Retained Profits / Accumulated losses brought forward, Net Income)
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Current Assets ( Inventories, Capital reserves, Revenue reserves, Currencies)
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The demand for capital can be seen by considering the capital commitment of finance current assets. At which stage of the production and storage of goods is the demand of capital important?
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In its core, financial planning aims at ensuring liquidity? What are the 3 Dimensions for liquidity reserves planning?
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Firms can seek financing both internally and externally. What are the financing methods (internally)?
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Financing through reserved profits
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Financing through accrued liabilities
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Financing through depreciations
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Financing through restructuring of assets
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Financing through equity
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Financing through debt
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Operating profit and annual profit describes completely the company's value creation
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The operating income (EBIT) does not consider the financial expenses!
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The Net Income does not considers the cost of equity capital
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The EVA is an estimate of a firm's economic profit (profit earned by the firm less the cost of the financing the firms capital)
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How to calculate the EVA?
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(EBIT- Taxes)= NOPAT, (Capital Employed x WACC)= Capital Cost, NOPAT - Capital Cost= EVA
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(EBIT- Capital Employed)= NOPAT, (Capital Employed x WACC)= Capital Cost, NOPAT - Capital Cost= EVA
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(EBIT- Capital Employed)= NOPAT, (NOPAT x WACC)= Capital Cost, NOPAT - Capital Cost= EVA
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How to calculate the ROCE (Return in Capital Employed)?
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EBIT / Capital Employed = ROCE
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Capital Employed / EBT = ROCE
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Capital Employed / EBITA = ROCE
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What are drivers for the Operating Income (EBIT)? Profit Management!
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Product, Price
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Process efficiency
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Administrative costs
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Balancing procedure
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Cross Subsidization
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What are drivers for the Taxes? Tax Management!
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Risk Management
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Capital Structure
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Product, Price
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Balancing procedure
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Cross- subsidization
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What are drivers for the Operational Capital? Asset Management!
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Process efficiency
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Administrative costs
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Asset management
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Down payments
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Liquidity management
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What are drivers for the WACC? Financial Management!
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Risk Management
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Capital Structure
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Financing
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Balancing procedure
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Asset Management
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Financial ratios document the result of success - but not its causes!
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The Balance Scorecard tries to depict the cause-effect relationship for strategic company management. What are the main components of the BSC?
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Components of the Parts "Finance, Internal Business Processes, Learning & Growth, Customer" of the Balanced Scorecard:
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Objectives
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Values measured
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Performance Objectives
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Initiatives
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Legal
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Risk Management
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Risk Objectives
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Components of the MECE Principle:
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Mutually
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Exclusive
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Collectively
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Exhaustive
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Employment
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External
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Migrating
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A ratio system is always based on the definition of a value to be managed and its operationalization. What are the components of the process for developing the ratio system?
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A ratio system is always based on the definition of a value to be managed and its operationalization. What are the components of the process for developing the ratio system?
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What are the theoretical concepts of strategy?
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Market-Based View
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Resource Based View
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Game Theory
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What are the components which describe market imperfection?
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Information asymetry
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Specific resources
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Opportunistic behavior
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Sustained Performance
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Market structure
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The market-based view sees the competition and the conduct of companies as main driver of superior performance!
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How was the main representative of the market based view?
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Mason, Bain
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Michael E. Porter
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Brandenburger
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Which components lead to "performance" in the market based view?
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Market structure
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Conduct (Positioning)
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Feedback for both stages
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Market Competition
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Diversification
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The resource based view sees resources and capabilities as main driver of superior performance. What is the reasoning of the resource based-view?
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Resource/Capabilities
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Conduct
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Market Position
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Performance
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What kind of resources are meant in the resources-conduct paradigm?
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Tangible Resources
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Intangible Resources
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Capabilities
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Strategy means: How can we create value for the company!
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A competitive advantage is created if a company's service to its customers is superior to that of its competitors. What are the components of the triangle?
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Customer
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Competitors
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Company
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Collection
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Compatitors
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Competitive Advantage: What should the benefit of the customer should be?
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important
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percieved
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durable
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constant
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reachable
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Porter introduced four generic positioning approaches to achieve a competitive advantage
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The Performance advantage: What is the goal of the company?
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Provide something unique that is valuable to buyers
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Provide a product with lowest price
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Become a cost leader in the industry
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The Price advantage: What is the goal of the company?
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Provide a product with lowest price
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Become the cost leader in the industry
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Provide something unique that is valuable to buyers
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What are the business strategies of porters generic positioning approach?
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Differentiation
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Niche Strategy
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Cost Leadership
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The Niche Strategy depends on the size of the market and is derived from the differentiation and cost-leadership strategy
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Imagine your are one of the leading airlines in europe. A difficult financial time in your firm makes you think about the upcoming strategy route. Most of your opponents fly with lower costs but the same routes and have a bigger margin. What generic strategy would you propose to the management board of your airline to compete with your competitors?
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Differentiation
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Niche strategy
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Cost-Leadership
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There are two main reasons for differing cost bases of competitors. Name them!
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Give some examples for "Exploiting structural cost differences":
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Cost management concentrates on experience curve effects and cost level!
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The experience curve os one of the most influential concepts in the history of strategic management. It says that, the units costs of a standard product declines by a....
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constant percentage of (20-30%) each time cumulative output doubles
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unconstant percentage of (20-30%) each time cumulative output doubles
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constant percentage of (20-30%) each time cumulative output tripples
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Attractive returns can only be achieved in miserable positions and only businesses that can potentially achieve No. 4-5 positions should be supported!
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Give some examples for cost level and cost structure instruments:
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Zero Base Budgeting
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Overhead value analysis
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Activity Based Costing
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Live Cycle Costing
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Target Costing
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Cost Benchmarking
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Describe the customer company interaction model. What are the components of performance not the company side?
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Products
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Processes
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Services
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Interaction/behavior
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Perceived Performance
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Loyalty
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Satisfaction
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Differentiation is the result of customer-company interaction. Describe the customer company interaction model. What are the components of differentiation not the customer side?
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Two simple questions can help to find sources of differentiation. 1) What creates customer Value 2) What creates uniquenes?
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The most important sources of differentiation are:
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Differentiation through "Quality"
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Differentiation through "Time"
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Differentiation through "Brand image"
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Differentiation through "Customer Relation"
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Differentiation through "Price"
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Imagine you have axis system with percieved price (y-axis) and rel. price (x-axis). On the luft uper side you have "Differentiation", in right upper side you have "Outpacing", left bottom side "Monopoly position" and in the right bottom side you have the "Cost-leadership". Which position misses in the diagram?
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Niche Position
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Stuck in the middle
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Growth posistion
Frage 68
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Imagine you have axis system with perceived price (y-axis) and rel. price (x-axis). On the left upper side you have "Differentiation", in right upper side you have "Outpacing", left bottom side "Monopoly position" and in the right bottom side you have the "Cost-leadership" as well as the stuck in the middle position. What action drives the position from costleader to outpacing?
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Constantly upgrading product portfolio
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Controlling and managing cost drivers
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Adding lower price products
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Use low-price position to build value for money image
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Invest in brand to create differentiation
Frage 69
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Imagine you have axis system with perceived price (y-axis) and rel. price (x-axis). On the left upper side you have "Differentiation", in right upper side you have "Outpacing", left bottom side "Monopoly position" and in the right bottom side you have the "Cost-leadership" as well as the stuck in the middle position. What action drives the position from differentiation to outpacing?
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Adding lower price products
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Controll and manage differentiation drivers
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Constantly upgrading product portfolio
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Use product differentiation to gain market share / increase volume
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Exploit economies of scale to reduce cost
Frage 70
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Imagine you have axis system with perceived price (y-axis) and rel. price (x-axis). On the left upper side you have "Differentiation", in right upper side you have "Outpacing", left bottom side "Monopoly position" and in the right bottom side you have the "Cost-leadership" as well as the stuck in the middle position. What action drives the position from stuck in the middle to costleader? It is nearly impossible!
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There are problems generic problems within a group of companies. Name them! (Example of Thomas Cook and Lufthansa with Aldiana and German Wings as well as Lufthansa and Neckermann)
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Remember: What are the components of the strategic management process?
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Strategy analysis (External Analysis and Internal Analysis, SWOT)
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Strategy Formulation and strategic choice (Strategy options, Evaluation, Objectives and Strategy decision, Choose a Strategy option
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Strategy as a plan ( Dev. structures and systems to support the strategy, Converting strategy into operational plans, Making people act according to the strategy, Controlling realisation)
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Strategy as a plan ( Dev. structures to support the plan, Converting strategy into operational plans, Making people act according to the strategy, Controlling realisation)
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Strategy Formulation and strategic choice (Strategy options, Evaluation, Strategy decision, Choose a win option)
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Strategy formulation is based on extensive and intensive analysis. On of the instruments is the SWOT analysis which brings the extensive and intensive view together!
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Firms experience impacts from their enviroment. What are the macro components?
Frage 75
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What are the components of the industry enviroment?
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Customers
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Company
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Competitors
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The Remote/Macro environment affects all companies in the same way.
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The Industry environment is composed of a set of forces that directly shape competition
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The industry environment can partly be shaped by firms; the macro environment can easily be influenced!
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In the Case of Samsung: What are macro facts which influence a company like Samsung?
Frage 80
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Porters five forces framework helps to understand industry attractiveness. The model also gives you the risks and attractiveness for an industry. What are the components of the framework?
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Potential entrants
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Buyers
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Consumers
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Industry competition
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Suppliers
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Substitutes
Frage 81
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Determines of the five forces: Potential entrants!
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Determines of the five forces: Buyers!
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Negation levers (concentration, Buying volume, Differentiation, Switching cost)
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Price sensitivity / Relevance of quality
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Concentration
Frage 83
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Determines of the five forces: Substitutes!
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Determines of the five forces: Substitutes!
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Determines of the five forces: Suppliers!
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Determines of the five forces: Industry competition
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A Fit between business system and competitive positioning is an important prerequisite for success. Business systems have different type of business strategies they want to achive.
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Just try to remeber the missing words!
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The Porter Value Chain refines the business system analysis. What are the components of the Value Chain
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Resource and capabilities create the distinctive competencies of the firm = Core Competencies. What are core competencies?
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Rare
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Defendable
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Difficult / Impossible to imitate / Substitute
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Not transferable
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Valuable (Revenues, cost, customers for free)
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It is necessary to add a dynamic dimension to the discussion of competitive advantage. What are the reasons for the eroding CA?
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Customers change or mobility
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External changes (values, regulation)
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Loss of resources / capabilities slack
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Imitation Innovation / substitution
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Avoiding slack / sustained inefficiencies
Frage 92
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Growing volatility and complexity create a new challenge for strategic planning. What are the uncertainty drivers in planning situations?
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Complexity
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Volatility
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Growth Dynamics
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Planning uncertainty
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Undefined goals
Frage 93
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What re the Key Challenges for planning situations?
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Combination of internal and external view on planning
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Multiple possible futures need to be considered
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Simplicity and speed
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Flexibility concerning planning horizon
Frage 94
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Scenario Planning is useful as a tool for modern strategic planning. Scenario Planning tries to build a plausible views of different possible futures by grouping key environmental influences. Result is a limited 1)______________, but different scenarios. The point is not to predict which outcome will occur, but a) to challenge 2) ____________about environment b) to test the sensitive of possible strategies and develope options how success can be ensured for every scenario.
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1)number of logically consistent
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1)number of logically inconsistent
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2)management's assumptions
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2) employees assumptions
Frage 95
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The HHL Roland Berger scenario development process: Six Steps and Six tools. What are the 6 components of the Process?
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Definition of the scope
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Perception Analysis
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Trend and Uncertainty Analysis
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Scenario Building
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Strategy Definition
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Monitoring
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Time horizon analysis
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Definition of Stakeholder
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Strategic level of analysis
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Toolset of the HHL SDP: Name the Tool of "Definition of the scope"
Frage 97
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Toolset of the HHL SDP: Name the Tool of "Perception Analysis"
Frage 98
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Toolset of the HHL SDP: Name the Tool of "Trend and Uncertainty Analysis"
Frage 99
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Toolset of the HHL SDP: Name the Tool of "Scneario Building"
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Framing Checklist
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Strategy manual
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Scenario Matrix
Frage 100
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Toolset of the HHL SDP: Name the Tool of "Strategy Definition"
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Strategy Manual
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Scenario Cockpit
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Framing Checklist
Frage 101
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Toolset of the HHL SDP: Name the Tool of "Monitoring"
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Scenario Cockpit
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Strategy Manual
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Scenario Matrix
Frage 102
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The Framing Checklist allows to define the scope of the strategy project comprehensively.
Frage 103
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The Framing List has 5 components. The "Goal of the scenario project", "Strategic level of Analysis", "Definition of Stakeholder", "Participants" and "Time Horizon"
Frage 104
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The 360 Degree Stakeholder identifies blind spots, weak signals and general influence factors. What are the components of the Process?
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First Questionnaire
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Second Questionnaire
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Data Analysis
Frage 105
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"Weak" Signals are developments that managers do not perceive!
Frage 106
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The Impact/ Uncertainty Grid helps to separate trends from uncertainties and allows to identify key uncertainties. Which zone-components are in the grid?
Frage 107
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The Axis of the Impact/ Unvertainty Grid are namend: Potential Impact (Y-Axe) and....
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Uncertainty (Y-Axe)
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Certainty (Y-Axe)
Frage 108
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The Scenario Matrix provides the basic framework for the detailed scenario development process. The first step is to group the critical uncertainties in groups of "Core Uncertainty 1-2". After grouping, place the core uncertainties 1 and 2 as axes of the scenario matrix. In the Scenario Matrix a the Scenarios A till D placed as fields.
Frage 109
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The scenario dimensions help in defining the strategy corridor as well as strategy actions. The Strategy corridor is one of the parts of the strategy manual. What are the important components that lead to the scenario dimensions at the end?
Frage 110
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The result of the Strategy Manual is a core strategy supported by several strategy options. There is only one right strategy without any options concerned.
Frage 111
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The Scenario Cockpit constantly benchmarks reakl-life indicators against the assumptions made in the scenarios. The structured scanning approach includes....
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Key Quantitive Data
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Key Qualitative Data
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Strategy Adjustment Data
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KPI's
Frage 112
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The Monitoring Cockpit is a matrix with the KPI (A to ...) and Scenario A to .....
Frage 113
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Scenario Planning possesses many positive attributes that enhance strategic decision making. What are the characteristics of the Scenario Method
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Development of multiple Scenarios
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Integration of external perspectives
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Facilitation of Strategic Thinking
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Feedback through Group Process
Frage 114
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Multibusiness firms are composed of two or more businesses.
Frage 115
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The degree of diversification characterizes strategy options at corporate level. What are the types of diversification?
Frage 116
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The Relationship of businesses at a conglomerate diversification is heterogenous with many businesses. What is the basis of the strategy?
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Identify business opportunities and share risks
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Transfer and use common resources and capabilities
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Exploit economies of scale and experience
Frage 117
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The Relationship of businesses at a relational diversification (horizontal or vertical) is heterogenous/homogenous with a lot of businesses (3-8). What is the basis of the strategy?
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Identify business opportunities and share risks
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Transfer and use common resources and capabilities
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Exploit economies of scale and experience
Frage 118
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The Relationship of businesses at a focused diversification is homogenous with one to three businesses. What is the basis of the strategy?
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Transfer and use common resources and capabilities
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Identify business opportunities and share risks
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Exploit economies of scale and experience
Frage 119
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Companies with low market value limit their strategic options. If the share price of a firm is very low, it limits the access to capital, limits the investment and the erosion of the competitive position which lowers and the end also the profit. With a low competitive position also the investment option/need.
Frage 120
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The Concept of parenting advantage provides the guideline for shareholder value creation at corporate level. What are the prerequisites for parenting advantage?
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All Businesses must have a positive value
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The whole must be more than the sum of its parts
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The value contribution of the parent must exceed the best alternative parents contribution to each business
Frage 121
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There are two ways to create shareholder value.
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Maximize value contribution of parent
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Maximize business value (stand alone)
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Maximize the difference between the cost and the benefit of all joint groups
Frage 122
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If your goal is to maximize the value contribution of parent then you have to.....
Frage 123
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Focus of strategy making is to achieve advantages in competition. Parenting versus competitive advantage. The cause of the advantage in the parenting advantage is...
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..Better management at the business level leading to serving customers (better and cheaper)
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..Better management at the cop orate level leading to (a exploitation of cross business relationships and b) positive influence on single businesses)
Frage 124
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Focus of strategy making is to achieve advantages in competition. Parenting versus competitive advantage. The standard of comparison in the parenting advantage is...
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....Other companies operating as suppliers of same/ similar product's ("do we serve customers in a superior way?")
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...Other companies as potential owner of businesses a firm owns ("do we contribute value to our businesses in a superior way?")
Frage 125
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Why do multi-business firms exist? Multi business firms can, under certain circumstances, be economically more efficient/ successful than single-business firms because of the transaction cost and because of specialized resources and market failures.
Frage 126
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Why do multi-business firms exist? Managers are motivated to create multi business firms even if they are not economically justified because managers are not motivated to decrease the size of there firms (theory of managerialism) and because managers in general act according to their own personal goals (principal agent theory)
Frage 127
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Corporate strategy is about developing a plan for the company ans "selling the story" to the shareholders. What are the components of the process of cop orate strategy?
Frage 128
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What is the content of goal setting in the corporate strategy process?