Midterm Review strategic mgmt

In making an overall assessment of a company's competitive strength, the answer to which questions are of particular interest?

(1) How does the company rank relative to the competitors on each important market success factor? and (2) Does the company have a net competitive advantage or disadvantage versus major competitors?

Two of the three best indicators as to how well a company's strategy is working are

(1) whether the company is achieving its stated financial and strategic objectives, and (2) whether it is gaining customers and increasing its market share.

Sonia, the owner of a local consulting business that provides small and medium-sized organizations with hardware and software and support for information systems, has asked you to explain the five forces model of industry attractiveness to her. What would not be considered one of the five forces?

competitive pressures stemming from incremental innovations within the information systems industry

Functional-area strategies

concern the actions, approaches, and practices to be employed in managing particular functions within a business.

Crafting a deliberate strategy involves developing strategy elements that

consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods.

The lower the user's switching costs, the

more intense the competitive pressures posed by substitute products.

Strategy-making is

more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives.

A company's strategic plan

outlines the competitive moves and approaches to be used in achieving the desired business results.

The major avenues for achieving a cost advantage over rivals include

performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities.

A company's value chain consists of

primary activities that are foremost in creating value for customers and the requisite support activities.

A company achieves a competitive advantage when it

provides buyers with superior value compared to rival sellers or offers the same value at a lower cost.

Well-stated objectives are

quantifiable or measurable, and contain deadlines for achievement.

For a resource or capability to be competitively superior it

should be competitively valuable.

SWOT analysis is a simple but powerful tool for

sizing up a company's resources and capabilities, strengths and deficiencies, its market opportunities, and the external threats to its future well-being.

Resource and capability analysis is a powerful tool for

sizing up the company's competitive assets and determining whether they can provide the foundation necessary for competitive success in the marketplace.

Managers can deliberately set challenging performance targets at levels high enough to promote outstanding company performance by establishing

stretch objectives that challenge the organization to deliver stretch gains in performance.

A "balanced scorecard" for measuring company performance

strikes a balance between financial and strategic objectives.

Among the principal managerial tasks associated with managing the strategy execution process, strategic managers would be most unlikely to

survey employees for their opinions about how to implement strategies for cost reductions and improvements in employee morale and job satisfaction

A company's values or core values concern

the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission.

Strategic group mapping is a visual technique for displaying

the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors.

The most powerful and widely used conceptual tool for diagnosing the principal competitive pressures in a market is

the five forces framework.

Which of the following factors should a company consider when determining if an industry offers good prospects for attractive profits?

the industry's growth potential, whether competition appears destined to become stronger or weaker, how the industry's driving forces might affect overall industry profitability, the company's competitive position relative to rivals, and the company's proficiency in performing industry key success factors

External threats to a company's future profitability and well-being do not include

the lack of a well-known brand name with which to attract new customers and help retain existing customers

The five forces of competitive pressures do not include

the power and influence of social/demographic trends.

Two analytical tools useful in determining whether a company's prices and costs are competitive are

value chain analysis and benchmarking.

A government oil company is having trouble with the private refineries and transporters to whom it delegates important stages of production. It decides to become more active along the entire supply chain from locating deposits to retailing the fuel to consumers. Which of the following does it intend to achieve?

vertical integration

In which one of the following instances is supplier bargaining power and leverage not weakened?

when the items purchased from suppliers are in short supply

cost driver

• A factor with a strong influence on a firm's costs • Can be asset-based or activity-based

_______ is the set of actions that its managers take to outperform the company's competitors and achieve superior profitability.

A strategy

value driver

a factor with a strong differentiating effect

A company achieves sustainable competitive advantage when

a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors.

Which of the following pairs of variables are least likely to be useful in drawing a strategic group map?

level of profitability and size of market share

Focused Low-cost Strategy

Concentrating on a narrow buyer segment (or market niche striving to meet these needs at lower costs than rivals (thereby being able to serve niche members at a lower price)

Focused Differentiation Strategy

Concentrating on a narrow buyer segment (or market niche) by offering its members customized attributes that meet their specific tastes and requirements of niche members better than rivals

The generic types of competitive strategies include

low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation strategies.

Broad Differentiation Strategy

Seeking to differentiate the firm's product offering from its rivals' with attributes that will appeal to a broad spectrum of buyers

Broad low-cost Strategy

Striving to achieve broad lower overall costs than rivals on comparable products that attract a broad spectrum of buyers, usually by underpricing rivals

Best-cost (Hybrid) Strategy

Striving to incorporate upscale product attributes at a lower cost than rivals. Being the "best-cost" producer of an upscale, multifeatured product allows a firm to give customers more value for their money by underpricing rivals whose products have similar upscale, multifeatured attributes

Why is a weighted competitive strength analysis superior to an unweighted analysis?

The different measures of competitive strength are unlikely to be equally important.

The strategically relevant factors outside a company's industry boundaries—economic conditions, political factors, sociocultural forces, technological factors, environmental factors, and legal/regulatory conditions—are known as

a company's macro-environment.

A distinctive competence is

a competitively important activity that a company performs better than its rivals.

The competitive pressures on companies within an industry come from all of the following except: -those associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry. -those companies in other industries attempting to win buyers over to their substitute products. -those associated with the threat of new entrants into the marketplace. -those associated with the bargaining power of suppliers and customers. -those associated with environmental factors such as water shortages.

Those associated with environmental factors such as water shortsages

Angie, CEO of a local alternative energy company that provides power for residential and commercial customers in your community, is engaged in the process of developing a list of questions to evaluate her company's internal situation. Which question would Angie NOT raise to complete the task of her company's resources and competitive position?

Which are our least and most profitable geographic market segments?

A company's mission statement typically addresses which question?

Who we are and what do we do?

A company's strategic vision concerns

a company's directional path and future product-customer-market-technology focus.

The strategically relevant factors outside a company's industry boundaries—economic conditions, political factors, sociocultural forces, technological factors, environmental factors, and legal/regulatory conditions—are known as: -the industry and the competitive arena in which the company operates. -general economic conditions plus the factors driving change in the markets where a company operates. -a company's macro-environment. -the competitive market environment that exists between a company and its competitors. -the dominant economic features of a company's industry.

a company's macro-environment

Financial objectives generally are not concerned with

achieving a market share of 9 percent.

Key functional strategies of a company include all of the following except

alliance and partnerships as well as merger and acquisition growth strategies.

The "driving forces" in an industry

are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.

The key success factors in an industry

are those competitive factors that most affect industry members' abilities to prosper in the marketplace—the particular strategy elements, product attributes, operational approaches, resources, and competitive capabilities that spell the difference between being a strong competitor and a weak one, and between profit and loss.

Bargaining power of buyers is weaker when

buyers are not very price-sensitive.

Benchmarking involves

comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities.

When an activity becomes something a company has learned to perform proficiently and capably, the company is said to have a

competence.

Examples of important cost drivers in a company's value chain do not include

customer service.

Crafting a company's strategy is best described as

delegation of considerable strategy-making authority to down-the-line managers in charge of particular subsidiaries, product lines, geographic sales offices, and plants in companies that are diversified geographically or by product/market.

The five basic tasks of the strategy-making, strategy-executing process DO NOT include

developing a profitable business model.

Managers must chart a company's strategic course by

developing a thorough understanding of the company's external and internal environment.

Understanding where a company is competitive requires

developing quantitative strength ratings for the company and key rivals on each industry key success factor and each pivotal resource, capability, and value chain activity.

The higher the switching costs for industry members, the more it can

enhance supplier bargaining power.

The primary purpose of value chain analysis is to

facilitate a comparison of how a company delivers value to its customers, activity by activity, relative to its competitors.

The pattern of actions and business approaches that would not define a company's strategy include actions to

gain sales and market share with lower prices despite increased costs.

A route to take in developing a differentiation advantage includes

incorporating tangible features that add functionality, and increase customer satisfaction with the product specifications, functions, and styling.

Supplier bargaining power is weaker when

industry members have the potential to integrate backward and self-manufacture their own requirements.

A strategic group

is a cluster of industry members with similar competitive approaches and market positions in the market.

The difference between a resource and a capability is a resource

is a productive input or competitive asset, whereas a capability is the capacity of the firm to perform some internal activity competently.

An example of a potential weakness or competitive deficiency is

lack of attention to customer needs.