Exam 1 MAN 4720 Strategic Management
SWOT analysis
a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats
competitive advantage
an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices. Is assessed relative to other competitors in the industry
what to do and what not to do
A well-devised strategy helps a firm understand
What guardrails do we put in place to act ethically and legally as we pursue our vision and mission?
Organizational core values help companies answer which question?
What is competitive parity
a firm's strategy of setting prices that are similar to those of major competitors
Resource-based
According to the ______ ______ view, firms are a distinctive collection of resources, capabilities, and competencies.
"great leaders"
According to the book Good to Great by Jim Collins, companies that were able to gain a competitive edge all have what in common?
Position itself in a way that relaxes the constraints of strong forces Position itself in a way that leverages weak forces
According to the five forces model, a firm seeking to compete in an established industry should seek to do which of the following?
High barriers to entry - a few large firms - differentiated products
In an oligopoly, which of the following conditions exist?
Indirectly
In contrast to primary activities, support activities add value _____, but are necessary to sustain primary activities
strategy
In order to achieve and sustain competitive advantage, a company devises and adopts a set of goal directed actions known collectively as a
Less
Managers have ______ direct influence over external forces in the firm's general environment than those in the firm's task environment
trade-offs
Managers often have to make decisions between two conflicting strategic options, otherwise known as
competitive parity
Michael's Deli is able to perform at the same level as its primary competitor. Michael's Deli has a
heterogeneity
state of being dissimilar, composition from unlike elements
Mission
A _______ outlines what an organization does while a vision outlines what the organization wants to do
A competitive advantage that lasts for a long period of time is said to be sustainable.
A competitive advantage that lasts for a long period of time is said to be ______________
Ethics and morals
A core values statement provides information to employees regarding the company's
Creating value, reinvesting profits to create more employment
A firm that successfully executes a strategy benefits society by
PESTEL model
A framework that categorizes and analyzes an important set of external factors (political, economic, sociocultural, technological, ecological, and legal) that might impinge upon a firm. These factors can create both opportunities and threats for the firm.
Five Forces Model
A framework that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy.
Industry
A group of companies that deal with more of less the same set of suppliers and buyers comprise an
Which of the following are elements of good strategy according to the AFI Framework?
A guiding policy to address the competitive challenge A diagnosis of the competitive challenge A set of coherent actions to implement the firm's guiding policy. All three are correct
four
A level - _________ leader presents a convincing vision and mission that helps groups improve their performance
Resource based
According to the ______ - ______ view, firms are a distinctive collection of resources, capabilities, and competencies
two
A Level- __________ leader is referred to as a Contributing Team Member.
Competitive disadvantage
A _______ occurs when a firm performs below the industry average or is outperformed by its competitors
orders, invoice, delivery
All of the following are examples of activities that create value,
Closely monitoring the firm's stock price
All of the following are examples of activities that create value, except (do not create value
Point-in-time snapshot of a moving target
Although the five forces is useful in understanding an industry's profit potential, it provides only a
Find meaning in their work
An inspiring vision helps employees
Competitive advantage
Beats' core competencies helped the company gain and maintain a _____ _____.
Difficult
By definition, resource immobility suggest that resources are _____________ to move from firm to firm
Technological innovations
Despite high barriers to entry, startups such as Tesla have been able to break into the US car market through
Consolidated
Firms have a tendency to change the industry structure in their favor, for example by making industries more ____ through mergers and acquisitions
How to implement Business strategy
Functional strategy answers which question?
Ecological
Global Warming would be an example of _____ factor in a firm's external environment
Dynamic capabilities
IBM's success navigating the ever-changing world of computer technology is due to it
55%
Researchers have determined that a firm's strategy can explain up to ____ of its performance
Increases
Strategic fit __________ the likelihood that a firm is able to gain a competitive advantage
Provide customer value while controlling costs
Strategic positioning allows managers to
The bulbs must have a lower cost than competitors' bulbs
The Bright Bulb light bulb company produces a line of LED bulbs that customers consider very similar to competitors' LED bulbs. Which of the following conditions must be true for Bright Buln to have a competitive advantage?
Value chain
The _____ describes the internal activities a firm engages in when transforming inputs into outputs
Sociocultural
The cultures, norms, and values of the society in which a firm competes are considered _____ factors
Stakeholders
The groups of individuals who can impact or be impacted by a firm's actions are known as
The stronger the forces, the lower the industry's ability to earn profits
The key takeaway from the Five Forces Model is
The firm's strategy
The most important factor in determining firm performance is
threat
When restrictive government policies do not exist or when industries become deregulated, the _____ of entry is high
Bargaining power of suppliers
The pressures that industry suppliers can exert on an industry's profit potential, is also called the
Form a strategy that is tailored to the firm's unique strengths and weaknesses and the opportunities and threats in its environment
The purpose of a SWOT analysis is to
VRIO Framework
The resource-based framework that focuses on the value (V), rarity (R), imitability (I), and organizational (O) aspects of resources and capabilities.
The main driver of firm performance
The resource-based model view resources as
Threat of entry
The risk that potential competitors will enter the industry is known as the
Which of the following are forces in Porter's Five Forces Model?
Threat of new entrants - threat of substitute products or services - bargaining power of buyers
Monitor external factors - evaluate external trends
Through use of the PESTEL model, firms are able to do which of the following?
Black Swan Events
Unexpected, high-magnitude events that are beyond what modern society can usually predict
Actions that are costly, long-term oriented, and difficult to reverse
What are strategic commitments?
Forgetting knowledge - turnover of employees
What can cause an outflow of resources from a firm?
Forgetting knowledge, turnover of employees
What can cause an outflow of resources from a firm?
They create enduring greatness
What distinguishes a Level-5 leader from other levels of leaders?
That each firm has different resources
What does the concept of resource heterogeneity imply?
Lobbying - litigation - public relations
Which of the following are considered nonmarket strategies?
The accounting scandal at Enron The 9/11 terrorist attacks The Fukushima nuclear disaster
Which of the following are examples of a black swan event (select 3)
Having more negotiating power vis-à-vis suppliers Spreading fixed costs over more units Benefit from a more specialized division of labor
Which of the following are examples of economies of scale?
Laws - regulations - mandates
Which of the following are factors in a firm's legal environment? 3
Creating value Controlling costs
Which of the following are primary strategy objectives?
What do we ultimately hope to achieve? What are our values? How can we achieve our goals?
Which of the following are questions that managers are likely to ask when beginning the strategic management process? 3
A set of activities designed to achieve a sustainable competitive advantage
Which of the following could accurately be called a strategy?
Analysis, formulation, implementation
Which of the following elements compose strategic management?
Outsourcing activities to consumers
Which of the following is a strategy used by Threadless to reduce costs?
Employees, stockholders, board members
Which of the following is considered an internal stakeholder?
Vision
Which of the following terms best describes an organization's primary objective and what it ultimately wants to accomplish?
Because product-oriented companies have less flexibility to meet consumer needs
Why are businesses with product-oriented vision statements more likely to fall than businesses with customer-oriented vision statements?
To encourage employees to make ethical choices
Why might a company develop organizational core values?
Capabilities
______ are organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically
Dynamic capabilities
______ describe a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage
Path dependence
______ describes a process in which the options one faces in the current situation are limited by decisions made in the past
Tangible
______ resources have physical attributes and are visible
2008 Global Financial Crisis
is an example of a black swan event
Oligopoly
A market structure in which a few large firms dominate a market
AFI framework strategy
A model that links three interdependent strategic management tasks: (A) Analyze, (F) Formulate, and (I) Implement. That together, help managers plan and implement strategy that can improve performance and results in competitive advantage. (pg 18)
Low; many
A perfectly competitive industry has _____ entry barriers and ____ small firms
rare
A resource is ______ if the number of firms that possess it is less than the number of firms required to reach a state of perfect competition
1, 3, 5
According the the AFI framework, which of the following are elements of a good strategy? 1) A guiding policy to address the competitive challenge 2) Strong stakeholder involvement in the strategy formulation process 3) A set of coherent actions to implement the firm's guiding policy 4) A leadership group with relevant prior industry experience 5) A diagnosis of the competitive challenge
Offers helpful and effective input
According to the Level-5 Pyramid, a Level 1-leader typically shows which capability?
Rare and valuable
According to the VRIO framework, in order for a firm to gain a temporary competitive advantage, a resource must be AT LEAST both ______ and _______.
upper-echelons theory
According to the ____, effective leadership is the outcome of certain intrinsic talents as well as education
Outlining the vision, mission, and values of the organization
What is the first step in the strategic management process?
It should inspire employees It should make employees feel that their work is important
What should a successful vision do for an organization?
It should make employees feel that their work is important It should inspire employees
What should a successful vision do for an organization?
Product-oriented
What type of vision is most likely to fail?
Incumbent firms spend more to satisfy customers - Incumbent firms lower prices - Industry profit potential declines
When a firm enters an industry, which of the following often occur? 3
competitive advantage
When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to achieve a
Resources
_______ are any assets that a firm can draw on when formulating and implementing a strategy
Face-to-face meetings
_______ is/are a form of communication that enable the CEO to pick up on nonverbal information such as moods and body language
Business
_________ strategy addresses the question of HOW to compete.
