Kapitel 1-13

Question 1

Limitations of Portfolio Approaches

Accepted Answer

- identifying individual business is not often as precise as required - they don't adress how value was added across business units - experience curve effect varied across different industries - portray the notion that firms have to be self-sufficient in capital

Question 2

Different Portfolio Approaches

Accepted Answer

- BCG matrix: growth-share matrix - Industry attractiveness - business strength matrix - market attractiveness - competence strength portfolio matrix - Arthur D. Little: Industry Life Cycle - Competitive Position Portfolio Matrix

Question 3

Arthur D. Little: Industry Life Cycle - Competitive Position Portfolio Matrix

Accepted Answer

- industry life cycle stages: embryonic, growth, mature, aging - competitive position: dominant, strong, favorable, tenable, weak

Question 4

Difficulties Strategy Implementation: Conflicting objectives between functional departments within a firm

Accepted Answer

President Marketing Finance&Accounting ManufacturingRespon- distribution channels data processing production & supply sibilities customer service carrying inventory alternatives warehousing transportation Objectives more inventory ----------------- less inventory frequent short runs ---------------------------------------------- long production runs fast delivery -------------------------------------------------------- lowest cost routing field wahrehousing ----------- less warehousing ------- plant warehousing --> functional objectives can crash, even when the functions try to reach the same overall objectives

Question 5

Solution to the problems of strategy implementation: balanced scorecard

Accepted Answer

= means to break down objectives into concrete key performance indicators = tool that the top management fills out for every function to translate their vision into an actual plan

Question 6

How to fill out the balanced scorceard

Accepted Answer

Objectives, Targets, Measures, Initiatives for every field 1. financial "to succeed financially: how should we appear to our shareholders?" 2. Internal Business Process: " to satisfy our sharehoulders & customers: at which business process must we excell?" 3. Learning & Growth: " to achieve our vision: how will we sustain our ability to change and improve?" 4. Customer: " to achieve our vision: how should we appear to our customers?"

Question 7

Short-term objectives

Accepted Answer

(break down growth objectives to short-term objectives) = measurable outcomes in one year or less help implement a strategy in 3 ways 1. operationalize long-term objectives: 20% gain in revenue over 5 years: what is the objective in revenue during the current week/month/year to indicate we are making progress? 2. Agreements on short-term objectives help raise issues & potential conflicts --> that usually require coordination to avoid dysfunctional consequences 3. assist strategy implementation by identifying measurable outcomes of action plans or functional activities: --> used to give feedback, make corrections, evaluation more relevant

Question 8

Advantages of formal policies

Accepted Answer

- require managers to think through the policies meaning - reduce misunderstanding - make consistent treatment of problems more likely - ensure unalterable transmission of policies - supply convenient reference - enhance organisation-wide control of key purposes of policies

Question 9

Bonus compensation: a lever to guide behaviour at top management level

Accepted Answer

1. stock option grants - purchase stock in the future at a price set now - compensation is determined by the spread between option price & exercise price disadvantage movement in share price does not explain all dimensions of managerial performance 2. Restricted stock plan - shares given as a give, but not allowed to sell them for a specific period of time - promotes longer executive tenure disadvantage executive allways profits unlike other share holders 3. Golden Handcuffs - bonus within a series of annual installments: first bonus afer 6 months, second after x months - keep executive in the firm disadvantage may promote risk averse decision making due to downside risk for executive 4. Golden Parachute - executives have the right to collect the bonus if they lose their position due to e.g. takeover firings - prevent executive from getting distracted from an offer of another firm within M&A activities disadvantage compensation is achievev weather or not wealth is created for shareholders: rewards either sucess of failure 5. cash based on internal business performance using financial measures - base on accounting performance measures (e.g. return on equity) - heal short comings of stock options disadvantage weak correlation between earnings, measures and shareholder wealth creation

Question 10

Advantages and Disadvantages of a functional organization structure

Accepted Answer

+- efficiency throuth specialisation- functional expertise- delegates day-to-day operationg decisions- centralized control of strategic decisions- links structure to strategy by designing key activities as seperate units -- promotes narrow specialization and functional rivalry- creates difficulties in functional coordination- limits development of general managers- potential for interfunctional conflicts (priority placed on functional areas not the whole business)- nobody has overall business sense

Question 11

Advantages and Disadvantages of a divisonal organizational structure

Accepted Answer

+- forces coordination down to the appropriate level for rapid response- strategy implementation & development in closer proximity to unique environment of the division- CEO: broader strategic decision-making - functional specialisation in each division -- dysfunctional competition - problem of how much authority is given to the division manager- policy inconsistencies among divisions- distributing corporate overhead costs in an acceptable way for every division

Question 12

advantages and disadvantages of a matrix organization

Accepted Answer

+- wide variety of project-oriented business activities- good training ground for strategic managers- multiple sources of diversity- fosters creativity - broader exposure to strategic issues for middle management -- confusion & contradictory policies- necessitates tremendous horizontal & vertical coordination- turf battles + loss of accountability

Question 13

advantages and disadvantages of outsourcing

Accepted Answer

+- lower costs if the activity outsources is done in-house- reduce amount of invested capital in production or service- managers & personnel can concentrate on mission critical activities- concentration and focus allows the firm to control the source of its core competitive advantage- careful selection of partners: allows the firm to learn from it's partners expertise -- loss of some control and realiance to outsiders- creates future competitors- skills important to a product are lost- maybe negative public reaction- good, legal agreements difficult to craft- locked in long-term contracts at costs that are no longer competitive- fragmented work cultures

Question 14

advantages and disadvantages of strategic alliances

Accepted Answer

= alliances with suppliers, partners, contractors... that allow the partners to focus on what they do best, farm out everything else and quickly provide value to the customer +- leverage firm's core competencies- limits capital investment: one partner firm does not have to have all the resources necessary to do work- flexible: allows firm to continue to do its other "regular" business - leads to networking & relationship building -- loss of control: give up ultimate control to the broader alliance- hard to establish good management control of the project: loss of operational control- distract a participating company's management & key players: one alliance can assume the majority attention of key players- raises issues of control over intellecutal property

Question 15

Policies

Accepted Answer

--> communicate guidelines and help to establish short-term objectives--> control decisions while allowing disgretion for operating personnel to execute business activities 1. establish indirect control over independent actions by clearly stating how things are to be done 2. uniform handling of similar activities: facilitates coordination of tasks 3. quicker decisions: standardize answers to previous asked questions 4. institutionalize basic aspects of organization behaviour 5. predetermined answers to common problems 6. mechanism that helps managers to avoid making hasty decisions in chaning operations

Question 16

Advantages of formal policies

Accepted Answer

- requires managers to think through the meaning and use of policies - reduces misunderstandings - make consistent treatment of problems more likely - ensure unalterable transmission of policies - supply convenienct reference

Question 17

4 types of strategic control

Accepted Answer

Premise Control Implementation Control Strategic Surveillance Special Alert Control

Question 18

Characteristics of the four types of strategic control

Accepted Answer

PC IC StS SACobjects of planning premises key strategic potential threats occurence of re-control & projections thrust & milestones & opportunities cognizable but related to the unlikely events strategy degree of high high low highfoucsing Formalization medium high low highCentralization low medium low high environmental yes seldom yes yes factorsindustry yes seldom yes yes factorsstrategy- no yes seldom yes specific factorscompany- no yes seldom seldom specific factors

Question 19

Monitoring performance deviations

Accepted Answer

1. Certain objectives that a company wants to reach 2. forecast the performance for the specific objective: how should it look like in xxx months 3. after xxx months: check the current performance at the time the former "forecast" pointed to 4. Is there a deviation between forecasted performance and actual performance? 5. Analysis: - if ahead of performance: why? - if in line: can we stick to that process? - if behind: what went wrong?

Question 20

Definition: Invention & Innovation

Accepted Answer

invention: creation of a new product through the development of new knowledge innovation: initial commercalization of the invention by producing and selling a new product or service incremental innovation: refers to simple changes or adjustments in existing products or services disruptive innovation: an innovation that was first only used by a very small group of customers because only a few people could profit from it. But suddenly it generates beneftis for a much larger group of people

Question 21

Triggers for innovations in international enterprises

Accepted Answer

1. Megatrends- demography/ lifestyles- life sciences- public/ private partnership 2. Markets- competiton- lifecycle- new knowledge 3. Technology Management- technological changes- material availability- inventions 4. Efficiency Pressure- experience curve- rising quality requirements 5. Political Framework- social provisions- terms of trade

Question 22

Main tasks for innovation management

Accepted Answer

- defintion of innovation goals - definition of the innovation programme - develtopment of innovative-prone organizational structure/ culture - establishing of process-spanning information system + controlling

Question 23

Breakthrough Innovations or Disruptive Innovations

Accepted Answer

= an innovation in a product, service or process that represtens a quantum forward in one or more of these ways: - shake up an industry - may come from different origins or industry settings than the industry to start in - can be appreciated by some fringe - often new - customers for features such as smaller, easier to use or cheap - more risky thatn incremental innovation approaches

Question 24

2 kinds of risks related to disruptive innovations

Accepted Answer

1. Technology risk: will it work? 2. Marketplace risk: will they want? phases within the model: routine & minor --> incremental --> fundamental --> breakthrough

Question 25

Drivers for failure and success for innovations

Accepted Answer

Successfull innovations1. moderately new to the marketplace2. based on tested technology3. save money for users4. reportedly met customer's needs5. supported existing practice Failed innovations1. untested technology2. "Me-too" approach3. no clearly defined problems4. no clearly defined solutions

Question 26

Defintion: Entrepreneurship

Accepted Answer

= process of bringing together creative and innovative ideas and actions with the management and organizational skills necessary to mobilize the appropriate people, money and operating resources to meet an identifiable need and create wealth in the process

Question 27

Entrepreneurship: theoretical basis

Accepted Answer

high Inventor Entrepreneur creativity &innovativeness low Promoter Administrator low high Management skills & business know-how

Question 28

Unusual combination of talents entrepreneurs have

Accepted Answer

Entrepreneurs need strength and talent in both creativity and management that enable a) in new ventures: the entrepreneur to conceive and launch a new business as well as make it grow and succeed b) in large organizations: strong players to emerge and build new ideas into impressive new revenue streams and profitability for a large company

Question 29

3 central elements of the entrepreneurial process

Accepted Answer

1. Vision of a profitable opportunity - 2 most common causes of failure: lack of sales, competitive weakness - a great business idea only works if there is a concrete market opportunity - need: analysing the customer's needs as well as their willingness to pay 2. Setup of entrepreneurial teams - successfull entrepreneurs bring several competencies and characteristics to their ventures - endless commitment - technical competencies - business management skills - orientation toward goals 3. Generation of Resources - vital ingredient: monetary resources - second core resource: time of the entrepreneurs

Question 30

Intrapreneurship

Accepted Answer

= process of attempting to identify, enable and assist entrapreneurship within a large company so as to create new products that become major new revenue streams for the company. --> build the product line the customer wants within the firm ! 1. promote project, 2. search for help, 3. money !

Question 31

10 freedom factors to encourage intrapreneurship in large companies

Accepted Answer

1. self-selection: companies should give innovators the opportuniy to bring forth their ideas 2. no hand-offs: managers should not force the person who generates the idea to hand it over 3. the doer decides: the person at the operating level has the say 4. corporate "slack": firms that set aside money & time ("slack") facilitate innovation 5. end "home run" philosophy: some companies foster an interest in innovative ideas only when they represent breakthroughs 6. tolerane of risk&failure: innovations involve risks --> calculated risk&failure should be tolerated 7. patient money: pressure for quarterly profits stiffles innovative behaviour 8. freedom from turfness: cross-fertilization is often central to innovation 9. cross-functional teams: sales from learning from operations --> interacting with relevant outsiders 10. multiple options: entrepreneurship is encouraged when people have many options for discussing or pursuing innovative ideas

Question 32

Intrapreneurship needs Champons

Accepted Answer

Technology Champion: technical promoter, expert Project Champion: process promoter, middel manager, translates between Technology Champion and Executive Champion Executive Champion: power promoter, sponsor

Question 33

Under Amour Vision Statement & Mission Statement

Accepted Answer

Empower athletes everywhere Make all athletes better through passion, design and the relentless pursuit of innovation4 Pillars of Greatness:1. Make great products2. Tell a great story3. Provide great services4. Build a great team

Question 34

Porter's 5 Forces: Airline Industry

Accepted Answer

1. Threat of new entrants:- large players in the business: aspirants have to come in on large scales or accept cost disadvantage- invest heavily to break customer loyalty to big brands like Lufthansa- high effects from learning curve/ experience curve --> proprietary technology --> access to raw material- high sunk costs- high capital requirements are needed: fuel costs, aircraft fleed- expansion of low cost carriers 2. bargaining power of customers- low buyer switching cost vs. high firm switching costs- strong brand identity for bonus customers, low brand identity but high price sensitivity for private customers- high remarkable product differences regarding the offered services 3. bargaining power of suppliers - high supplier concentration: boeing, airbus- low switching costs for airlines- low threat of foward integration- powerful labor unions 4. Threat of substitutional products- short distances: national markets: busses, car, train- high frequency distances: high speed trains- technology for web-conferencing is improving- environmental issues challenge air travel 5. Industry Rivalry- several competitors- limited economies of scale- high sunk costs- exit barriers- rapid but volatile growth- limited product differentation

Question 35

The Value Chain Analysis for the Airline Industry Primary Activities

Accepted Answer

Potential Phase Marketing&Sales Flight Operations Inbound Logistics- Marketing Mix - repair, maintainance - Apron Activities: refueling, loading- Image - catering - Internal control purposes - distribution channels - control center- bonus programmes - flight dispatch Process Phase Ground Handling at Operations Ground Handling at location of departure place of arrival- passenger related - flight services - commonly controlled activities - intragroup specific:- Apron activities like it's also handled at the airport of departure Result Phase Follow-Up Contact- further customer contact- contact support: Service Center, Newsletter, Hotline

Question 36

Value Chain of an Airline: Support Activities

Accepted Answer

Firm Infastructure Technology Development HRM Procurement Network Planning Yield Management

Question 37

Strenghts & Weaknesses of Lufthansa

Accepted Answer

1. Strenght- Europe's leading airline- Image, Reputation- one of the largest route networks- partnerships and joint ventures that support new market entries- first mover innovations- star alliance member 2. Weaknesses- profitability depends on external factors: - uncertain fuel prices - economic development in Europe - competition from low cost carriers - suffer effects from strikes - existing overcapacities

Question 38

Grand Strategies: Apple

Accepted Answer

1. Market Development - opening additional geographic markets - national expansion: first only Apple Stores in the USA - international expansion: now Apple services and products are available worldwide - attracting other market segments - product versions: Iphone SE for new target markets (first time buyers & emering markets) - entering other distribution channels: Reseller, e.g. Saturn - advertising in other media: Super Bowl Advertising "Shot on Iphone 6" 2. Product development- product features: Iphone SD touch, Live Photo / MacBook Retina Display- quality variations: MacBook with or without Retina Display- additional models & sizes: MacBook Air, Pro, iPad mini 3. Innovation- iPhone as one example of radical product innovation: launched in 2007- sustaining innovation in the smartphone market- business model to effect a disruption- new market for internet access 4. Vertical Integration- by controlling and organizing the whole supply chain by Apple Inc.

Question 39

Hugo Boss brand portfolio: based in the premium and luxury segment

Accepted Answer

PremiumBoss Orange (wholesale) , Boss Green, HUGO, BOSS LuxuryBOSS --> the reputation of the BOSS core brand shapes the overall perception of the brand portfolio as a whole

Question 40

Hugo Boss' differentiation Strategy: Resources & Skills and Organizational Requirements

Accepted Answer

Resources & Skills1. Marketing Abilities - no use of traditional marketing instruments - focusing on brand communications - reaching target groups by using digital channels 2. product engineering skills - skilled fashion designer - R&D: modern designs and innovative material 3. creative talent & flair - attracting talent from outside the company - recruit young talents - works closely with national and international universities 4. capabilities in basic reserach - R&D: product design, pattern design, technical product development - focus of development activities is on customer's needs 5. Corporate reputation for quality leadership - comprehensive range of high-quality fashion - leading companies in the premium and luxury segment of the global apparel market - design sophisticated products Organizational Requirements1. Strong delegation among functions in R&D, product development and marketing - high-performance operational processes (high quality in large numbers efficiently) - closely integration of the product design and development with industrial manufacturing - extensive automation and provision of additional service 2. Subjective Measurement and incentives instead of quantity measurement - all employees share in the group's success: annual bonus linked to the achievement of internally defined targets - employees without negotiated wage agreements receive a basic salary + a bonus of which half is linked to the group targets and half to the achievement of personal goas 3. amenities to attract highly skilled labor and scientists - creation of a working environment that fosters initiative-taking, team spirit and the motivation to perform well - initiatives in HRM help employees to translate the mission statement into concrete action - framework: corporate values of quality, passion, respect, cooperation, innovation

Question 41

Ways how HUGO BOSS achieves differentiation and competitive advantage along the value chain

Accepted Answer

General Administration- analysing early indicators- investment controling secures profitability targets- international management system HRM- committed to training skilled staff- intensive training for sales personnel- generalized & specialised training, incorporating an international dimension Technology Development- use cutting edge production technology to maintain a distinctive image: --> ongoing technological enhancements as competitive advantage Procurement- minimizing risk: procurement volume spread over a global network of suppliers to reduce exposure to individual procurement markets- supplier day: presenting of sustainable program- system-side integration of suppliers to boost supply chain transparency Inbound Logistics- highest quality standards- consideration of social and ecological factors at every point along the value chain Operations- regular inspections to lower defection rate- internal control system & risk management system Outbound Logistics- powerful logistics infrastructure ensures timely and accurate delivery to the group's own points of sale as well as to wholesale partners Marketing & Sales- development of high quality apparel through marketing in the premium and luxury segment- increased capacity especially in digital marketing- branding activities enhance the group's attractiveness as an employer Service- Reinforcing its competence and credibility in the luxury segment by offering appropriate products and services- improving services for online-shopping customers

Question 42

Google: Balanced Scorecard

Accepted Answer

1. Learning and Growth"ITO-Policy"Objectives: creation of something newMeasures: employees spend 20% of their working time on innovationsTargets: keep emplyees motivated & challengedInitiatives: flexible work schedules --> TGIF Meetings + leisure opportunities at work Human Resource-PolicyObjectives: happiness of employees & higher moralMeasures: performance over their main projectTarges: better performanceInitiatives: 1 recruiter for 14 employees and further training in weaknesses of employees 2. CustomerObjectives: more and faster information for customersMeasures: speedy reserach (time until leaving Google site)Targets: access to all information everywhereInitiatives: Project Coon, Google mobile services 3. Financial Objectives: EBIT growth and diversification of companyMeasures: EBIT and stock share valueTargets: more money for investment and developmentInitiatives: dividend policy 4. Internal Business ProcessObjectives: environmentally friendly company through the efficient use of resourcesMeasures: power consumption and CO2-EmissionTargets: be climate-neutralInitiatives: Bus shuttle for workers, server spend 50% less energy, high investments in renewable energy

International Business (Fach) / Kapitel 1-13 (Lektion)