MGMT4210 5

  1. SWOT framework - note
    • synthesize the results of external and internal analysis
    • use it to formulate strategic options, but doesn't tell which option is optimal
  2. 3 ways to measure competitive advantage
    • accounting profitability
    • shareholder value creation (stock price capital gain, dividend yield, mkt cap)
    • economic value added
  3. measure competitive advantage - accounting profitability - pros and cons
    • easily accessible, standardized, verifiable
    • backward looking, doesn't consider off-BS items, focuses mainly on tangibles
  4. measure competitive advantage - shareholder value creation- pros and cons
    • easily accessible, transparent, comparable, captures what investors care about
    • backward looking, high volatility>difficult to evaluate, susceptible to macro factors and sentiment, focusing too much can hurt company
  5. measure competitive advantage- economic value added - pros and cons
    • forward looking,
    • at the heart of competitive advantage;
    • determining value to consumer is costly, inexact and subjective
    • value to customers changes based on circumstances
    • difficult to apply to heterogeneous product offerings
  6. balanced scorecard - dimensions
    • consumer perception (related to max WTP)
    • shareholders perception (stock price and books)
    • how we create value (how appropriate is the current resources)
    • investment in new competency
  7. balanced scorecard- pros and cons
    • communicates clearly the firm's strategic vision and focus
    • translates vision into actionable and measurable goals
    • provide at-a-glance feedback on how's implementation going
    • forward looking;
    • for implementation, not for formulation
    • performance metrics need to be directly linked to strategic objectives
  8. triple bottom line approach - dimensions
    • economic
    • social (CSR)
    • ecological
  9. stakeholder strategy - who are internal stakeholders
    employee and investors
  10. stakeholder strategy - 3 characteristics of stakeholders
    power, legitimacy, urgency
  11. gap between WTP, price and cost
    • WTP, price>consumer surplus
    • price, cost>firm profits
    • WTP, cost>economic value added
Card Set
MGMT4210 5