MGT401 Exam Review

oligopoly

- few (large) firms - some pricing power - differentiated product - high entry barriers

perfect competition

- many small firms - firms are price takers - commodity product - low entry barriers - low profit potential

Monopoly

- one firm - considerable pricing power - unique product - very high entry barriers - high profit potential

different levels of strategy

- strategic planning - scenario planning - strategy as planned emergence

the building owned by Amelia, which reduces cost of operations

Amelia has recently started a restaurant in a commercial area that already has many other established restaurants and popular fast-food chains. Amelia owns the building in which her restaurant is located, rather than leasing premises as her competitors do. this factor allows her to offer her products at a more competitive price. Amelia has also invested a huge amount in designing the restaurant's interior an in equipping the kitchen with the appliances that are most widely used in her industry. in this scenario, which of the following is the most valuable resource for Amelias business.

entering the aircraft manufacturing industry requires huge capital investments

In the aircraft manufacturing industry, at least for large commercial jets, Boeing and airbus are the only competitors. there is not a significant threat of entry because

provide products similar to its competitors, but at lower prices

Q: A firm is said to gain a competitive advantage when it can:

Competitive advantage

a firm that achieves superior performance relative to other competitors in the same industry or the industry average - to do some a firm needs to provide either goods or services consumers value more highly than those of its competitors, or goods or services similar to competitors at lower cost

fir between its internal strengths and the external environment is static

a firm will fail to create a sustained competitive advantage when the:

strategic position

a firm's _________ relates to its ability to create value for customers while containing the cost to do so

easy to imitate

according to an evaluation using the VRIO framework, crocs shoes was unable to sustain its competitive advantage primarily because its products were:

core competencies

allow a firm to differentiate it products and services from those of its rivals, creating higher value for the customer or offering products and services of comparable value at lower cost

resource heterogeneity

although shook inc. and fury inc. operate in the same consumer electronic industry, ehook inc. has better sales and brand equity. this is attributed toe hook inc's commitments to innovation. the company has adequate financial and human capital to invest in research and development, an area in which efury inc. lags behind. in this scenario, which of the following critical assumptions of the resource-based view of a firm has been illustrated

fragmented industry

consists of many small firms and tends to generate low profitability

external stakeholder

contour inc., a vendor, regularly supplies capacitors to all purpose electronics for use in its products. therefore, contour inc. is all purpose electronics

economies of scale

cost advantages that accuse to firms with larger output because they can spread fixed costs over more units, employ technology more efficiently, benefit from a more specialized division of labor, and demand better terms from their suppliers

economies of scope

describe the savings that come from producing two (or more) outputs at less cost than producing each output individually, even though using the same resources and technology

emergent strategy

describes any unplanned strategic initiative bubbling up from deep within the organization - if successful, have the potential to influence and shape a firm's overall strategy

path dependence

describes the process in which the options one faces in a current situation are limited by decisions made in the past - often early events sometimes even random ones have a significant effect on final outcomes

consolidated industry

dominated by a few firms, or even just one firm, and has the potential to be highly profitable

more competitive rivalry than firms outside their strategic group

firms that compete within the same strategic group generally experience:

core competency

frozen gold is a fast-growing chain of ice cream shops. it has acquired an edge over its competitors through its ability to provide a wide array of unique flavors and a hip atmosphere in stores. this advantage of frozen gold best exemplifies a:

realized strategy

generally formulated through a combination of its top-down strategic intentions and bottom-up emergent strategy

core rigidities

if a firm relies too long on the competency without honing, refining, and upgrading as the environment changes

external stakeholder

include customers, suppliers, alliance partners, creditors, unions, communities, media, and government at various levels

unrealized strategy

intended strategy is likely to fall by the wayside because of unpredictable events and turn into what? - unpredictable events

relative

is competitive advantage always absolute or relative

resource

is valuable if it helps a firm increase the perceived value of its product or service in the eyes of consumers, either by adding attractive features or by lowering price because the resource helps the firm lower its costs

operations

primary activities in the value chain analysis

operations

production plants are a part of a firm's what?

strategic position

require that firms stake out a unique position in an industry- it requires trade-offs that should increase the value of their products/services while still maintain an effective cost structure

pursue a differentiated strategy

ride n style inc., is a bus line with service to several major cities. it has several competitors that each offer service to one or two cities, and based on its current outlays, it cannot match or beat those competitors on price. because of long-term contracts and an increase in the cost of gasoline, it is not possible to reduce expenditures at this time. which of these strategies should ride n style pursue instead?

competitive parity

should two or more firms perform at the same level

intended strategy

the outcome of a rational and structured, top-down strategic plan - likely to fall by the wayside because of unpredictable events and turn into unrealized strategy

what is SBU

the standalone divisions of a larger conglomerate, each with its own profit-and-loss responsibility

primary activity

to reduce the amount of time it takes to apply packaging to its finished products, North Star foods is implementing new equipment at its production plants. by doing this, North Star is. addressing a ____________ in the value chain analysis

a vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision

which of the following summarizes the difference between a firm's vision and mission