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Question: Meeting the challenge of high-velocitychange Answer: There are 3 factors that address the challenge of high velocity

change: 01. Reacting to Change: a. Actions: i. Introduce new products in response to new offerings of rivals ii. Respond to unexpected changes in buyer needs and preferences b. Strategies i. The company is expected to react and respond to the changes happening around them. Both proactive and reactive strategies are a part of this process. ii. The companys position ought to be defended and protected from outside threats and influences. 02. Anticipating Change: a. Actions: i. Analysis of prospects for market globalizations ii. Research buyer needs, preferences, and expectations iii. Monitor new technological developments to predict future path b. Strategies i. Plan ahead for future changes ii. Add resources and competitive capabilities iii. Improve Product Line iv. Strengthen distribution 03. Leading the Change: a. Actions: i. Pioneer new and better technologies ii. Introduce innovative products that open new markets and spur the creation of whole new industries iii. Seek toset industry standards b. Strategies: i. Seize the offensive ii. Be the agent of industry change; set the pace iii. Influence therules of the game iv. Force rivals to follow

Question: What are the industrys dominant economic features? Answer: The dominant economic features are defined below in the table Economic Feature Market size & growth rate Number of rivals Questions to Answer How big is the industry? How fast is it growing? Is the industry consolidating to a smaller number of rivals? Istheindustrysegmented into many small companies? Scope of rivalry Is the geographic area over which most companies compete local, regional, national, multinational or global? Is having a presence in a foreign market becoming more important to a companys long term success? Number of buyers Is the market fragmented by many buyers? Do some buyers have bargaining power because they purchase in large volume? Degree of product Are the products of rivals becoming more or less differentiated? differentiation Arethe products ofrivals becomingincreasinglysimilar causing price competition? Product innovation Is the industry characterized by rapid product innovation and short product life cycles? How important is R&D and product innovation? Are there opportunities to overtake key rivals by being first to market with next generation products? Demand-supply Is a surplus of capacity pushing prices and profit margins down? conditions Is the industry overcrowded with rivals? Pace of What role does advancing technology play in the industry? technological Why most industry members have or need strong technological change abilities? Vertical integration Do most competitors operate in only one stage of the industry? Is there any cost or competitive advantage or disadvantage associated with being fully or partially integrated? Economies of scale Is the industry characterized by economies of scale in purchasing manufacturing adverizing and shipping? Learning/experience Do any companies have significant cost advantages because of curve effects their learning experience in performing particular activities? Are certain industries activities characterized by strong learning and experience effects such that unit costs decline asa companys experience in performing the activity builds?

Question: What are the factors/components of acompanys external environment market? Answer: A host of external factors influence a firms choice of direction and action and ultimately its organizational culture and internal processes. Let us take a closer look at the factors establishing a companys external environment:

Outside the Industry (Remote Environment) Inside the Industry (Industry Environment) Inside the Firm (Operating Environment)

Social Political Technological Ecological

Entry Barriers Supplier Power Buyer Power Substitute Availability Competition

Competitors Creditors Suppliers Consumers & Labor

Question: What are the advantages of a functional organizational culture? Answer: Functional sructures predominate in firms with a single or narrow product focus. Such firms require well-defeined skills and areas of specialization to build competitive advantages in providing their products and services. The strategic challenge presented by the functional structure is effective coordinates of the functional units. The narrow technical expertise achieved through specialization can lead to limited perspectives and to differences in the priorities of the functional units. Lets examine an example of this through an electronics distributors organizational chart:

CEO Finance & Accounting

Engineering

Production

Personnel

Marketing

Now lets take a look at a process-oriented distributors functional structure:

CEO Receiving & Delivery Order Entry Retail Services Accounting & Billing Customer Service

Purchasing

Wholesale

Therefore, overall we can classify the advantages into two parts: geographical and divisional or strategic unit structures.

Question: What are the components of a companys macro-environment?

The main factors are: 1. Task environment a. Government b. Shareholders c. Suppliers d. Employees e. Competitors f. Trade associates g. Communities h. Creditors i. Special interest groups j. customers 2. Societal Environment a. Sociocultural forces b. Economic forces c. Technological forces d. Political-legal forces 3. Internal environment a. Structure b. Culture c. Resources

Question: From thinking strategically about the companys situation to choosing a strategy, explain with diagram.

From Thinking Strategically to Choosing a Strategy

Thinking Strategically about External Environment Form a Strategic Vision Thinking Strategically about Internal Environment Identify Strategic Options Select the Best Strategy

First of all, the company needs to examine the external environment factors which influence its operations and prospects. It should then try to find a way to identify major weaknesses and strong suits and maximize them as much as possible. The same tactic is used for internal environment. By combining the analyses found from both internal and external environments, the company formulates a strategic vision which outlines the sort of favourable position it wishes to be a part of in the future. Then it recognizes the options available to realize that vision. Once those options are chalked up, it then proceeds on to selecting the best possible options within the framework and requirements of its vision.