ÖRGÜT KURAMI VE TASARIMI

Corporate-level strategy is formulated for the overall organization and often deals with the selection of which business domain or markets the firm is to compete in.

A focus strategy aims either at a low cost advantage or a differentiation advantage for a narrow segment or niche market.

Extensive division of labor is an aspect of defender strategy. 

Flexibility with loose structure, open culture, low degree of formalization and flexibility with loose structure are related to prospector strategy.

Structural characteristics of production department are as follows:

A strategic alliance is any cooperative efforts of two or more organizations to achieve strategic objectives of developing, producing or selling products or services.

Backward integration involves acquiring ownership or increasing control over its suppliers to make some of its own inputs.

Porter described four attributes that can lead to national competitive advantage:

Transnational strategy combines characteristics of both multidomestic and global strategies along with its own unique features by trying to achieve both local responsiveness and efficiency at the global level.

Competitive advantage is a firm’s ability to generate superior economic performance and outperform its competitor because managers are able to create more value and meet customer needs in the marketplace. There are five general categories of organizational resources and capabilities, which lead to competitive advantage:

Physical Resources

Advantages from better location, possession of raw materials, and superior machines, equipment and factories.

Human Resources

Experienced and knowledgeable management teams, skilled labor, and motivated workers.

Financial Resources

Strong financial performance, and the ability to borrow or receive credits from financial institutions.

Learning Resources

Strong research and development programs leading to innovations and superior learning processes.

General Resources

Strong brand, good reputations, superior management systems, and strong relationships with stakeholders.

Since the given case describes the firm’s good impression which will eventually lead to a good reputation and its relationships with stakeholders, choice (e) is the correct answer.

According to Michael E. Porter, a firm must select a strategy to cope with competitive forces such as the threats of new and existing competitors in order to gain competitive advantage. Managers can choose from cost leadership, differentiation, and focus strategies. Choice (a) is the correct answer.

Research and development efforts are essential for many firms especially those that put priority on new product development, process improvement, and to advance innovation goals. A firm that adopts a differentiation strategy often pursues different types of R&D than those that pursue cost leadership strategy, and often spends more on R&D. Firms often direct their R&D efforts to improve operational processes to make them more efficient when following cost leadership strategy. In contrast, firms that direct their R&D efforts toward innovations in the quality or uniqueness of their products or services often follow differentiation strategy. Choice (d) is the correct answer.

Structural Characteristics for Production and R&D Functions

PRODUCTION DEPARTMENT

R&D DEPARTMENT

Tall structure

Flat structure

Centralization of authority

Decentralization of authority

Standardization

Few rules, informal

Strict hierarchy of authority

Collaborative teamwork

Mechanistic form

Organic form

 Choice (b) is the correct answer.

A competitive business strategy would position a firm in an industry to outperform its competitors (Choices b & d). A firm can choose to produce lower priced products and services using a low-cost business-level strategy (Choice c). A firm chooses to produce for a customer group who wants unique or differentiated products by using a differentiation business-level strategy (Choice a). A cooperative business strategy is to gain competitive advantage within its industry by working with, rather than against, other competitors (Choice e).

IKEA specializes in selling lower-price furnishing to customers who want or can afford to pay for mid- and lower-priced products. It follows a cost leadership business-level strategy and it is successful in its select domain and positions itself to use its resources and abilities to manage its environment. Choice (b) is the correct answer.

A corporate-level strategy of diversification allows a firm to use its core competencies to pursue opportunities in several industries and product markets. A firm engages in related diversification when it enters a new domain with similar or related core competence. Since these are all products of the food industry, there are related to the company’s core business. Choice (d) is the correct answer.

Porter described four attributes that can lead to national competitive advantage: Factor conditions – a nation’s factors of production such as skilled labor. Factor conditions that are important are often not inherited (natural resources are inherited) but are created such as highly skilled employees, scientific and specialized knowledge, and the ability to innovate. Demand conditions – home market demand for an industry’s products or services. Demand conditions of the home market especially when the buyer’s needs anticipate or shape those of other countries (i.e. global trends). Related and supporting industries that are internationally competitive, for example, home-based suppliers who can deliver cost effective inputs, especially those that can provide innovations along with long-term working relationships. Firm strategy, structure, and rivalry that govern how companies are created, organized and managed as well as the nature of domestic rivalry. For example, powerful domestic rivalry can have a large positive stimulating effect on all firms in an industry by putting pressures for constant upgrading of the sources of competitive advantage. Therefore, choice (a) is the correct answer.

A multi-domestic strategy is oriented towards a high level of local responsiveness where products can be actively adapted to local preferences in each country market. Choice (d) is the correct answer.

The following are five of the common approaches that managers can use to measure organizational effectiveness:

Choice (e) is the correct answer.

Similar to the BSC, the competing value approach tries to balance concerns from various parts of an organization. This approach is represented by three underlining value dimensions: organizational focus, organization structure, and organizational means

The strategic constituency approach is concerned with how successfully it satisfies its strategic constituency or the key stakeholder groups from which it requires support to survive and thrive. Thus, the correct answer is B.