Management 494BI Exam 1 (1-3)

What is competitive disadvantage?

Competitive disadvantage is underperformance relative to other competitors in the same industry or the industry average.

What is Competitive parity?

Competitive parity is the performance of two or more firms at the same level.

What is a benchmark?

A Benchmark is, either the performance of other firms in the same industry or an industry average. A firm that achieves superior performance relative to other competitors in the same industry or the industry average has a competitive advantage

What two factors is firm performance determined by?

Firm performance is determined primarily by two factors: industry and firm effects

What is sustainable competitive advantage?

Sustainable competitive advantage is outperforming competitors or the industry average over a prolonged period of time.

True or False: Does a good strategy enables a firm to achieve superior performance?

True, a good strategy enables a firm to achieve superior performance.

Define Competitive Advantage?

Competitive Advantage is having superior performance relative to other competitors in the same industry or the industry average. To gain a competitive advantage, a firm needs to provide either goods or services consumers value more highly than those of its competitors, or goods or services similar to the competitors' at a lower price.

True or False: Is competitive advantage always relative?

Competitive advantage is always relative, not absolute. To assess competitive advantage, we compare firm performance to a benchmark—that is, either the performance of other firms in the same industry or an industry average. A firm that achieves superior performance relative to other competitors in the same industry or the industry average has a competitive advantage

What do strategic leaders do that makes some strategic leaders more effective than others?

In a recent study of more than 350 CEOs, strategy scholars found that they spend, on average, 67 percent of their time in meetings, 13 percent working alone, 7 percent on e-mail, 6 percent on phone calls, 5 percent on business meals, and 2 percent on public events such as ribbon-cutting for a new factory (see Exhibit 2.3).

The five steps in stakeholder impact analysis and the key questions to be asked. Let's look at each step in detail.

STEP 1: IDENTIFY STAKEHOLDERS STEP 2: IDENTIFY STAKEHOLDERS' INTERESTS. STEP 3: IDENTIFY Opportunities AND THREATS. STEP 4: IDENTIFY SOCIAL RESPONSIBILITIES. STEP 5: ADDRESS STAKEHOLDER CONCERNS

What is Strategic Management?

Strategic management is the integrative management field that combines analysis, formulation, and implementation in the quest for competitive advantage. Mastery of strategic management enables you to view a firm in its entirety. It also enables you to think like a general manager to help position your firm for superior performance.

What is Strategy?

Strategy is a set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors. To achieve superior performance, companies compete for resources: New ventures compete for financial and human capital. Existing companies compete for profitable growth. Charities compete for donations, and universities compete for the best students and professors. Sports teams compete for championships, while celebrities compete for media attention. A good strategy is more than a mere goal or a company slogan. Declaring that Twitter's "ambition is to have the largest audience in the world" is not a good strategy; it is no strategy at all. Rather it is a mere statement of desire. In creating a good strategy, three steps are crucial: First, a good strategy defines the competitive challenges facing an organization through a critical and honest assessment of the status quo. Second, a good strategy provides an overarching approach on how to deal with the competitive challenges identified. The approach needs to be communicated in policies that provide clear guidance for all employees involved. Last, a good strategy requires effective implementation through a coherent set of actions.

What three elements does a good strategy consists of?

The three elements that a good strategy consists of: 1.) A diagnosis of the competitive challenge. This element is accomplished through analysis of the firm's external and internal environments.(Part 1 of the AFI framework). 2.) A guiding policy to address the competitive challenge. This element is accomplished through strategy formulation, resulting in the firm's corporate, business, and functional strategies (Part 2 of the AFI framework). 3.) A set of coherent actions to implement the firm's guiding policy. This element is accomplished through strategy implementation.(Part 3 of the AFI framework).

What strategy is not?

What strategy is NOT: 1. Grandiose statements are not strategy. 2. A failure to face a competitive challenge is not strategy. 3. Operational effectiveness, competitive benchmarking, or other tactical tools are not strategy. pg 11