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__ Isomorphism. Organisations cluster in form because of political pressure to conform. The pressure to appear legitimate
(1995) If one firm innovates then it can create industrial breathing space
(1984) Introduced RBV by analysing firms on the 'resource side rather than from the product side'
(2005) TCE and property rights economics support RBV because the conditions of resource ownership affect the value of the resources. Thus, TCE is relevant to strategy
(1991) The (failed) assumption that good management can make any diversification successful led to positive stock market reactions in the 60s
(1982) In evolutionary models, firms have processes, such as how they go about R&D. These act as the 'genes' of the model
_'s initial strength became its eventual weakness. It has 2 _s which helped at first but eventually made them slow
_'s current share price is just _% of its peak
IP protection is a large factor in _. Strategies include leaving blueprints at home, or only using older technology
(1975) Having a larger market share leads to competitive advantage
_ Paid The NFL $_ Million To Use Its Tablets, But Announcers Are Calling Them iPads
(1988) Innovative late entry can be the winning strategy (e.g. Kindle)
(2000) Little evidence that high investment in innovation pays
(2007) Strategy is time dependent – ‘what can be changed and how intelligently it can be changed- shift over time.
(1988) With uncertainty there is a trade-off between acting early and acting later after the uncertainty is resolved.
(2012) Lucky people have to ability to create it through: intention to seek opportunities, receptiveness, ability to recover, and connection (can't be lucky alone).
(1962) Changes in organisational strategy create admin problems that therefore prompt structure changes.
_ _ responded to publicity that there was insufficient meat content with strong multi-channel marketing. Ultimately increased positive brand sentiment.
(1999) Egotistic managers have a proven tendency to overestimate their own relative skill
(1997) Having core capabilities can inhibit innovation because they also bring core rigidities
The creative destruction of innovation makes analysis of static industry structure fairly redundant
(2000) Little evidence that high investment in innovation is profitable
_ became blinded by its own success according to _
(2000) As organisations age they get more efficient at innovating but at the same time their areas of innovation become less relevant
(1993) Correcting errors may have unintended consequences (e.g. correcting overconfidence may worsen risk aversion)
(2008) Managers are more likely to learn from failure than success - success actually 'plants the seeds of failure'
cost minimisation is not competitive in the long run as it is not innovative. It will make a firm bad at responding to competitors.
(2001) Criticise RBV for: tautology, ignoring capabilities, having little prescriptive value
(1979) Pioneered industry analysis
Patents such as Apple's _ to _ can be designed around
(1995) Game theory is limited in practice by 'concsious reasoning' of finite depth
(2006) Suggests that firms are 'hostages of their industries' and so should look to cooperate (not just compete)
(1990) Small firms innovate radically, large firms broadly. Medium firms stuck in the middle
(1989) Formal planning systems are inextricably linked to the social structures of organisations acting as ‘a king of glue within the social interactive processes’
(1989) Imitiation is important because of the need for compatability to meet network demands
___ funded the development of rival ____'s OS. Co-opetition
Constant improvement in operational efficiency is necessary but not sufficient for SCA
(1996) Strategic positioning could be needs-based, access-based, or variety-based
__ Isomorphism. Professionalisation brings a shared set of knowledge and networks that mean that organisations are made up of people who see things the same way.
2 types of firm structure
(1985) Game theory can plot the path of competitive interaction
_ _ is arguably an extension of RBV with similar critiques
(2011) Strategy IS focus; focus on HOW to achieve desired goals (e.g. Steve Jobs saving Apple from bankruptcy)
Intangibles such as __ and __ may also be sources of SCA.
(1997) Competitive success comes from experience and efficiency acquired in the past and managers should aim to commit to a long-term trajectory of competence development
(1986,_) 3 factors affecting how innovation profits are distributed: regimes of _, _ _ paradigm and _ assets
(1995) Alliances formed between fierce competitors (to stem competition) are likely to fail because of tension between the partners.
_ _ was a rushed and tehnologically faulty reaction to the _
__ acquired ___. Resounding success and clear synergies
(2009) The link between strategy and performance is foggy and so success stories should be treated as inspiration rather than Bible
(2007) Link CEO narcissism to ‘strategic dynamism and grandiosity’ i.e. acquisitions (but no systematic underperformance)
(2004) Causes of hypercompetitivity: globalisation, improved substitutes, deregulation, lower entry barriers
_'s operating system was based on code from the 1990s which meant it couldn't be easily transformed into an iPhone killer
(2006) Performed a study of artificial music markets and found persistent consequences of chance events
Two factors that make 'Red Oceans' undesirable
(1984) Selection forces favour reliable and accountable firms. A negative by-product is that these firms suffer inertia and are resistant to change (and innovation)
(1974) Decision makers are affected by heuristic biases (representativeness, availability and adjustment and anchoring) which can lead to systematic and predictable errors
(1997) Despite the existence of uncertainty, managers shouldn’t adopt a binary view and assume that analysis has absolutely no worth
(1993) Decision makers ‘have a strong tendency to consider problems as unique’ which leads to misinterpretation of risk and an inside view of problems
(1980) Strategy actually might follow structure - a multi-divisional firm is better placed to pursue diverse opportunities
_ pioneered Diet Cola but the profits were seized by the _ _ Company
(1974) successful diversification requires shared core competences
(1993) Market status serves as a competitive advantage
(1989) Alliances can protect firms from third parties and are a lower cost, lower risk way of exploring new tech and markets
(2007) Suggest that superior performance may be explained through the failures of competitors to 'imitate perfectly-imitable resources' and solve 'solvable problems'
(1982) Evolutionary theory is positive but economists want a normative explanation
(1975) Market share increases ROI through market power, economies of scale and the associated good management.
__ View: dubious of planning but less worried about ruthless markets than evolutionaries. Strategy is an emergent process of learning and adaptation
(2009) Strategic planning is what brings ideas and people together
(1962) The multidivisional structure of firms was a reaction to opportunities presented by transport and communication technology. Structure followed strategy.
(2011) 'Strategy involves focus and, therefore, choice. And choice means setting aside some goals in favour of others.'
(1990) Managers should realise that they alone can't make change happen - they have to create a culture of improvement in the organisation
(1982) Evolutionary models of strategy discard profit maximisation as the driving force of economies
(1971) Not enough effort is made to learn from failed companies.
(1996) Feels that strategic competency comes second to other core competencies e.g. knowledge of ‘how to design great motorcycle engines’
(1991) Managerial blind spots in terms of the contingent decisions of competitors include winner’s curse, nonrational escalation of commitment, overconfidence, limited perspectiv
(1997) Dynamic capabilities are used in 'rapidly changing environments'
(1990) Demonstrate the experience curve in the truck manufacturing industry (negative relationship between experience time to produce)
(1991) Due to competition between bidders, all the gains of a related acquisition may accrue to the target firm.
(1994) Describes potential causes of diversifying phenomena: managers striving for market power, agency problems or a solution to excess capacity
(1999) Found a high prevalence of formal planning in a survey of executives but also found that flexibility and regular adjustment is essential
(1993) The fact that many diversifications failed in the past shows that they rely on more than just good management
(1950) An analogy of firm survival could be drawn from the theory of evolution
Factors specific to individual (blanks) are neglected by the 5 Forces model
(2004) Hypercompetitivity in the manufacturing industry. SCA lasts fleetingly. Only soln: keep finding SCAs.
(1985) M form might solve some of the resource allocation and agency problems with diversification
(2013) Forumla 1 firms naturally tend to innovate because of culture.
(1999) Firms should aim to be as different as possible whilst retaining the legitimacy of familiarity
Strategic asset ___ (e.g. reputation, expertise) are accumulated by choosing appropriate time paths of ___ (e.g. marketing/R&D budget)
(2012) FMA makes a brand the psychological standard (e.g. Coca-Cola)
(2004) Even sustained high performance might be caused by chance events having persistent consequences
(2011) Complained that thousands of organisations do not have strategy but instead goals that they pretend are strategy. E.g. US end terrorism
__ View: Social and other contexts are vital to strategic thought. In some certain situations then, the other views may make sense EX-POST
(2011) 70-90% failure rate of acquisitons
(1983) Firm similarity is encouraged by three types of forces: coercive, mimetic and normative
(1997) Acquisitions are often the strategy of choice for overconfident, egotistic CEOs
(1999) Discuss 'standards wars' that are especially bitter when markets are subject to network effects
According to this model, profits occur when there is heterogeneity in costs
A 1% increase in market share is only associated with a 0.1% increase in ROI. Focus should therefore be on other factors such as prod/service quality
(1997) From a TCE logic suggests that alliances will be more hierarchical when contractual hazards (that create moral hazard) are high
(1993) Described 4 conditions for sustained competitive advantage: heterogeneous resources, ex-post + ex-ante limits to competition, imperfect resource mobility
(1963) Firms make decisions on two levels (financial viability and assessment of whether the decision will improve the company’s position)
(1992) Described how VHS overcame Betamax despite a lack of first mover advantage
__ __ asks his employees at Google to dedicate some of their time to radical experimentation to ensure that they stay ahead of the game
(1997) Core capabilities are unique combinations of skills and knowledge that, combined with resources, create competitive advantage
(1997) Alliances lie on a market-hierarchy continuum. Firms should be wary of how an alliance makes valuable intellectual property vulnerable to appropriation
State owned ___ acquire German waste management co. in order to acquire technological knowledge in their goal of modernising economy
(1993) If skilled management is the make or break of success then it follows that well managed firms should look to diversify widely
(2000) Long term competitive advantage lies in resource configurations, not dynamic capabilities.
____ focused on producing new graphics cards in 6 month cycles to beat the industy's 18 months. They had 3 development teams on rolling basis. Focus
FT described potential acquisition of ___ by ___ as a 'major trophy' for the CEO. Does this reflect a culture of CEO worship/egotism?
rule of 10%
(2009) Strategic planning has integrative effects through activities of participation and communication to unite diverse units
(1988) Relatedness is not sufficient for a successful diversification - must be a valuable resource creating an advantage
(1999) Diversification into unfamiliar industries can lead to conservative reactions from analysts who simply don’t know enough about the new situation
(1999) Innovation trumps imitation because only it can drive society forward
Industry factors do explain performance
(2000) DCs could be interpreted as the ordinary capability of being able to learn how to learn
Related acquisition does not generate abnormal returns to shareholders of bidder
(2012) Pioneer when there are network effects, the expected category life is short and product value is subjective
(1999) R&D alliances barely ever develop into an acquisition.
(2010) 'If your company went out of business tomorrow would anyone miss it?'
(1985) Emergent strategy is not chaos but ‘unintended order’ when management is ‘open, flexible and responsive’.
__ Isomorphism. Organisations copy each other's structures and processes in order to deal with uncertainty. Japan in 19th c.
(1996) Inter-firm interdependence means that co-opetition should be pursued to increase the size of the pie.
(2012) Late enter when there are _ standards to compare products and low costs of _
(2007) Sustained competitive advantage is distinct from superior performance. Resource asymmetries at a point in time give superior cash flows
(2005) Merging prevents the merged firms from becoming the outsider - so share price up even when profits squeezed.
(1989) Argued that increasing returns to adoption can lead to technological lock-in. (the founder effect)
(2007) A DYNAMIC CAPABILITY is 'the capacity of an organisation to purposefully create, extend, or modify its resource base'
(2000) Advocates a systemic view of strategy which o draws from many areas of life such as policy, culture and education and ‘arms managers with sardonic self-awareness’
(1995) Thinking alliances through to their conclusions is important. A firm should look to add value as well as learn from the partner. The best success comes from ‘alliances of
(1993) Diversified companies face a resource allocation problem between the various business units
(1989) Partners should look to learn from each other and each should contribute something distinctive
(2005) Blue Ocean Strategy
Over ___ unicorns in Silicon Valley totalling $500bn. Numbers picked out of thin air lead to costly acquisitions
(2007) Further develop RBV's imitability condition and stress that the time period of imitation could be a new axis of analysis
(1990) Consequences of small random events can persist due to positive feedback effects (e.g. increasing returns to adoption)
(2005) After M&A announcement, the target firm usually sees its share price rise, acquirers break even - total effect is positive
__ __ acquired ___. Failure of this merger blamed on clash of cultures
(2002) Acquirers can only expect abnormal returns if they integrate their own resources with those of the new business
After US DoJ announced its mission to block the takeover of (1) by (2), (1)'s stock price rose and (2)'s fell
(1997) Since dynamic capabilities must be built, there is a need in organisations for managers who build.
(2001) Takeovers made by relatively inefficient firms are failures on average
(1965) SWOT analysis - integrates internal and external factors.
1st of Porter's conditions for an acquisition to be successful
2nd of Porter's conditions for an acquisition to be successful
Firms that were very profitable (ROA>15%) in 2003 had an 83% chance of being very profitable in 2013. Previous odds about 50%
(1997) what matters is an organisation's capacity to sense opportunities, seize them and transform the resource base.
3rd of Porter's conditions for an acquisition to be successful
_'s diversification strategy might not be best measured in terms of profitability but in user base growth (rocketed ahead of __)
_ pioneered a better tire but had no system of complimentary assets (e.g. trained mechanics) to create profit
(1991) industry is not a major determinant of performance
(1987) For an acquisition to work: the industry must be attractive, cost-of-entry must not exceed future profits and the new business unit should have a competitive advantage
(2000) Related diversification is more likely to work and moderate diversification beats limited and extensive diversification
(2013) Dynamic capabilities are distinct from ordinary capabilities because they are path dependent, idiosyncratic and cannot merely be purchased.
(2008) Liberal paternalism (nudging)
(1986) Firms can expect to learn more about the future relative to their competitors by analysing their own skills and capabilities rather than the industry environment. (yay RBV)
(2000) Dynamic capabilities are best conceptualised as tools that manipulate resource configurations
__ ___ killed by the substitute MP3 Player
(1978) Proposes 'logical incrementalism' (no 'massive decision matrix) Managers must marry formal planning with precipitating circumstances making commitments as late as possible
(2004) Most alliances and acquisitions fail. Choice should depend on useful resources, potential synergies and market factors
(1993) Even innovation that doesn't work can be profitable because it imparts STATUS on the innovating firm.
survived through radical change from paper mill to phone company
(1986) The process of the acquisition itself can have a significant effect on the 'ultimate success of the deal'
__ View: rational decision making
__ realised that their furniture had to be taken apart to fit into a car - realised that customers would have the same problem
(1986) Acquisition is a quick and risk minimising way of accessing 'markets, products, technology, resources, or management talent'
(1989) Valuable assets are non-tradable and therefore must be built
(2011) Two types of acquisitions: 1. Those that intend to boost the current position 2. Those that look to take the company in a new direction
___ want to create a shift in their public perception. They want to be seen as a software co. with consistent sales rather than volatile hardware
If firm performance is inherently complex and multivariate then research must investigate a variety of factors that might be behind it.
FT report that the CEO of ___ was trying to prevent the firm's split into life and general insurance wings. Agency problems + manager pay linked to firm size
5 Forces assumes industry structure is constant but actually it is endogenous and changes. e.g. changes in taxi driving industry
Porter's descriptive model of sustained competitive advantage
The variety in intra-industry performance is demonstrated by __ __ and _ who were top 10 profitability in 2015 despite a bad year for the industry
(1997) Core capabilities are embedded with company values and so are slow to change when they become outdated (rigidities)
(1962) Surveyed the largest industrial firms of the time. Most had a decentralised multidivisional structure.
(1992) Economies of scale transformed the soft drink industry with distribution changing from ‘systems of independent bottlers to captive bottling subsidiaries’
'Naive Realism' - we are biased to think are own views are developed from reason whereas everyone else is being irrational or PC etc.
Novo Nordisk CEO: CSR is maximizing company value over a long period of time, because in the long term, social and environmental issues become financial issues
Multinationals should form joint ventures with companies that share similar goals r.e. growth and profitability - e.g. small firms in _
(1990) 'structure follows strategy...as the left foot follows the right'
(1963) Firms are ‘coalitions of groups’, are satisficers instead of maximisers, have five real goals (production, inventory, market share, sales and profit)
(1992) Finds that planning has the largest correlation with performance within industries with a ‘planning disequilibrium’ (where levels of formal planning vary considerably)
(2002) Only a minority of firms achieve superior performance (ROA statistically significantly above average) and it rarely persits
(1991) 3 sources of network externalities: network-based products, _ products, _ _ costs
Famously failed to profit from copier innovation
_-_ has made related diversifications into Innocent smoothies and Chi Ltd. a Nigerian dairy drink company.
According to this model, profits occur when entry is impossible
Strtegic relatedness means NPV of combined firm is greater than sum of NPVs of separate firms.
_ exploited exogenous change to become a pioneer of a new location of the pay day loan industry
(1992) Argues that a lot of historic failure with diversification is down to the fact that core competencies are so vital to success
___ in a normal year was as profitable as ___ in an excellent year (low oil price). No one's going to build competing rail lines.
(2011) Companies in every category fall on the path to sameness. 'companies have lost sight of their mandate...to create meaningful grooves of separation from one another'
__ have kept net profit margins between 3 and 3.5% for the last 20 years as revenues have grown. Extremely persistent profitability.
(1968) Described increasing returns to adoption in the case of science scholarship
(2011) An essential starting point of strategy is diagnosis of what the problem actually is. E.g. why is Greece borrowing too much?
(2004) Explains how the effects of both chance and skilled management could appear the same and so essentially, high performance does not prove skilled management was there
(1929) Firms must trade off between imitation and innovation since customers are drawn to the status quo but exact imitation leads to price wars
Strategic planning is an oxymoron
(1963) Decisions are made on two fundamental levels: will it improve our position and is it financially viable.
(2011) Alliances are sometimes not pursued because firms are unsure how to divide value created.
(2006) Success depends both on firm and industry and so rival firms may sometimes cooperate to increase an industry's attractiveness
(2006) Despite the criticisms, formal planning was found in 81% of large corporations in a study
(2010) Bank execs aren't surprised to hear that their employees can't answer 'why should i choose you over the competition?'
(1988) A trade off under uncertainty faced by managers is between focusing resources on one scenario and spreading resources on several scenarios, thus maintaining flexibility’
__ bought __'s £1bn __ factory for just $__m - quite a lucky break!
3 conditions to imitate: _ of what to imitate, _ to do it and _ to do it
(2001) Humans are not great at doing game theory in practice. They may well make the wrong choices
(1987) The average stock market reaction (negative) to diversification is often used as a warning sign, however, this stock price movement is based on potential nervousness and the
(1999) Abnormal returns from SCA may be consumed by stakeholders other than shareholders (e.g. employees)
__ View: faced with great uncertainty companies' best bet to survive is to maximise efficiency day-to-day
(2006) Strategy is an organics process and the best initiatives may arise unexpectedly from unexpected sources (such as lower down in the organisation)
(2006) Emphasise the importance of praxis, as distinct from practice and practitioners
(2007) strategy is more reacting than planning
(2007) study of market entry found that the decision to enter was based ‘on evaluations of their own competence and paid little attention to the strength of the competition
(1985) Most strategy lies on a continuum between formal planning and emergent
Rule of 3
Joint ventures require trust. One multinational CEO achieves this in _ by teaching management in the _ Party school to grow credibility
(1988) 3 sources of FMA: _ leadership, _ of assets, buyer _ costs
(2008) Players of Deal or no Deal exhibit path dependent attitudes to risk

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