MQM 385 CHAPTER 1

3 steps to a GOOD strategy:

1. Diagnosis of competitive strategy 2. Guiding Policy to address the competitive challenge 3. Set of coherent actions to implement the guiding policy

Effectively managing the strategy process is the result of 3 broad tasks:

1. analyze 2. formulate 3. implement

Formulating consists of which 3 things?

1. business strategy 2. corporate strategy 3. global strategy

3 things that strategy is NOT:

1. grandiose statements 2. failure to face competitive challenge 3. tactical tools such as operational effectiveness and competitive bench marketing

Implementing consists of which 2 things?

1. organization design 2. Corporate governance/business ethics

Analyzing consists of which 4 things?

1. strategic leadership/process 2. external analysis 3. internal analysis 4. competitive advantage

2 determinants of strong ETHICAL VALUES:

1. underlay vision statement 2. serve as guardrails to keep on track

A positive relationship between vision statements and firm performance is likely to exist under 3 circumstances:

1. visions are customer-oriented 2. internal stakeholders define the vision 3. organizational structures align with firm's vision statement

______ are the ethical standards and norms that govern the behavior of individuals within a firm or organization.

organizational core values

Organizational core values are the answer to which of the following questions? - How do we accomplish goals? - What is the value added to a good or service at each stop in the production? - What is the company's customer lifetime value - Which of the value chain activities is primary?

How do we accomplish our goals?

____-____ vision statements focus employees on improving existing products and services without consideration for underlying customer problems to be solve.

product-oriented

____-____vision statements often constrain the ability to adapt to changing environments.

product-oriented

Quick Eats is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursuing a low-cost position and doing well, Quick Eats also wants to adopt the same strategy. Which of the following will be a likely implication of this decision? - Quick Eats will face low profit potential - Quick Eats will not face any direct competition in the industry - Quick Eats will be able to create higher value for its customers - Quick Eats will be better placed to gain a competitive advantage in the industry

Quick Eats will face low profit potential

Which of the following has contributes to Tesla's competitive advantage in terms of stock appreciation? - reinvesting profits to continually design and produce better electric vehicles - using inexpensive materials to keep costs low - copying the most popular features of competitors' vehicles - keeping its proprietary technologies secret

reinvesting profits to continually design and produce better electric vehicles

To achieve superior performance, companies compete for ___.

resources

A _____ is accomplished through strategy implementation.

set of coherent actions

A guiding policy should be backed up by _____, such as sizable investments or changes to an organizations incentive and reward system.

strategic commitments

Firms need to back up their visions and missions with ____- which are costly, long-term oriented, and difficult to reverse.

strategic commitments

______ is a stretch goal that pervades the organization with a sense of winning, which it aims to achieve by building the necessary resources and capabilities through continuous learning.

strategic intent

____ describes the act of staking out a unique position within an industry that allows the firm to provide value to customers, while controlling costs.

strategic positioning

Superior performance is the consequence of good ____.

strategy

____ is about creating superior value, while containing the cost to create it, or by offering similar value at lower cost.

strategy

_____ is a set of goal-directed actions a firm takes to gain and sustain superiority relative to competitors.

strategy

A firm that is able to outperform its competitors or the industry average has ______.

sustainable competitive advantage

Which of the following does a firm possess when it can outperform other firms in the same industry or the industry average over a prolonged period of time? - long-term capital gain - consistent power position - sustainable competitive advantage - strategic position

sustainable competitive advantage

If a company chooses to keep its vision customer-oriented rather than product-oriented, what will be the implication of that decision? - the company will clearly define how it means to satisfy a customer need - the company will fail to establish a positive relationship between its vision statement and performance - the company will have a short-term, unidirectional focus - the company will tend to be more flexible when adapting to changing environments

the company will tend to be more flexible when adapting to changing environments

Which of the following statements will effectively guide a strategist? - strategy is all about competitive bench marking and operational effectiveness - it is necessary to isolate the key stakeholders and their needs when formulating strategy - the principles of strategic management can be applied universally to all organizations - industry and firm effects that determine firm performance are independent of each other

the principles of strategic management can be applied universally to all organizations

Which of the following statements is true of strategy? - actions that allow a firm to address a competitive challenge are strategy - tactical tools that are a part of a firm's functional and global initiatives are strategy - statements of desire, on their own, are strategy - operational effectiveness and competitive bench marking are strategy

actions that allow a firm to address a competitive challenge are strategy

A _____ is either the performance of other firms or the industry average.

benchmark

To assess competitive advantage, we compare firm performance to a _____.

benchmark

A firm that achieves superior performance relative to other competitors in the same industry or the industry average has ______.

competitive advantage

A firm that underperforms its rivals or the industry average has ____.

competitive disadvantage

If should 2 or more firms perform at the same level, they have ____.

competitive parity

The ________ provides touchstones for the employees to understand the company clture.

core values statement

_____-____ vision statements focus employees to think about how best to solve a problem for the customer.

customer-oriented

_______-____ vision statements allow companies to adapt to changing environments.

customer-oriented

A _____ is accomplished through analysis of the firm's external and internal environments.

diagnosis of the competitive advantage

First steps to gain and sustain competitive advantage:

Define vision, mission and values

The greater the difference between value creation and cost, the greater the firm's _______- and the more likely it will gain competitive advantage.

economic contribution

An ______ vision has a sense of winning and motivates employees at all levels to aim for the same target.

effective vision

Strategic leaders begin with the ____ in mind.

end

A _____ is accomplished through strategy formulation.

guiding policy

"How do we accomplish our goals?" is the question of determining ____.

mission

A _______ is what an organization actually does- the products and services it plans to provide, and the markets in which it will compete.

mission

An organization's _______ describes what the organization actually does- the products and services it plans to provide, and the markets in which it will compete.

mission

The _____ is HOW the vision is accomplished.

mission

Without commitment and involvement from ____, any statement of values remains merely a public relation exercise.

top managers

When a firm integrates the competitive strategies of cost-leadership and differentiation, it will most likely result in - an increase in the firm's economic contribution - a competitive advantage through superior performance - competitive parity with firms that have adopted either of the strategies - trade-offs that work against each other

trade-offs that work against each other

Operational effectiveness, marketing skill and other functional expertise all strengthen a _____.

unique strategic position

The key to successful strategy is to combine a set of activities to stake out a ____ within an industry.

unique strategic position

To have competitive advantage, firms need to provide goods or services consumers ____ more highly than those those of competitors, or goods or services similar to competitor's, but at _____.

value; lower prices

"What commitment do we make, and what guardrails do we put in place, to act both legally and ethically as we pursue out vision and mission?" is the question of determining _____.

values

"What do we want to accomplish ultimately?" is the question of determining _____.

vision

The ____ is the first principle that should be defined because it identifies the primary long-term objective of the organization.

vision

The _____ captures and organization's aspiration and spells out what it ultimately wants to accomplish.

vision

Which of the following statements accurately brings out the difference between an organization's vision and mission? - Vision is short-term: oriented and related to the organization's present, whereas the mission is futuristic. - Vision is valid at the functional level of the organization, whereas mission covers the entire organization - mission is the organization's aspirations for the future and vision is about how these aspirations can be made true over time - vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished

vision defines what the organization wants to accomplish ultimately, whereas the mission defines the means by which vision is accomplished

_____ companies often outperform their competitors in the long-run.

visionary

The ____ explains/predicts differences in firm performance and helps managers formulate and implement a strategy that can result in superior performance.

AFI strategic framework

A good strategy is more likely when strategic leaders apply the ______.

AFI strategy framework