MAN4720 Quizzes 1-8/ Midterm Review
A value curve indicates a lack of effectiveness in a firm's strategic profile when it stays level. zigzags. trends downward. trends upward.
zigzags.
These make up the Five Forces
Power of Buyers & Suppliers Thread of New Entrants & Substitutes Competitive Rivalry
The United Auto Workers (UAW) union is an example of this powerful Five Forces category
Power of Suppliers
They are the two necessary steps required in order to attempt differentiation strategy
(1) Identify what the market wants (2) Signal that the firm can satisfy that want
What is the grand total of earnings employees (students) can make in their salary (grades) throughout their employment in this company? 1,000 2,000 250 500
1,000
Perfect Competition Monopolistic Competition Oligopoly Monopoly
4 Main Competitive Industry Structures
The First step in gaining and sustaining a competitive advantage
Vision, Mission and Values
Complements and Co-Opetition
A Sixth Force
The balanced scorecard The triple bottom line
Integrative frameworks, combining quantitative data with qualitative assessments
The outcome of a rational and structured top-down strategic plan
Intended strategy
Which of the following statements is true of accounting data? Accounting data focus mainly on intangible assets, rather than tangible assets. Accounting data are historical data and thus backward-looking. Accounting data do not have to be adjusted in any manner to compare companies with different capital structures. Accounting data consider off-balance sheet items, such as pension obligations of a firm.
Accounting data are historical data and thus backward-looking.
Distinct and fine-grained business processes
Activities
According to your training session, actions based on vision will: Build necessary resources Build capabilities Ensure continuous organizational learning All choices are correct
All choices are correct
According to CEO Lay, employees will be able to access the weekly training sessions: At the allotted time From the recordings On zoom All of the choices are correct
All of the choices are correct
Compare firm to competitors in the same industry Compare firm to Industry average
Asses competitive advantage
"an obsolete, narrow product line"
Weakness
It's the level of analysis used when applying Porter's Value Chain
Internal Analysis
Which of the following is directly proportional to profits of firm in an industry: Barriers to Entry? Power of Suppliers? Power of Buyers? Threat of Substitutes? Competitive Rivalry?
Barriers to Entry
As mentioned in your training session, which of the following is an example of economics of scale? Boeing built the 787 dreamliner that is able to go long distance, or point-to-point connections In rail transportation, a single train can carry both passengers and freight more cheaply than having separate trains Zappo's offers free shipping and does not use pre-determined scripts for service None are examples of economies to scale
Boeing built the 787 dreamliner that is able to go long distance, or point-to-point connections
These make up the five business strategies
Broad LC, Focused LC, Broad Diff, Focused Diff, Integration
"Firms that compete within a strategic group generally follow similar" these
Business Level Strategies
Details competitive tactics and initiatives Explains how the firm: Intends to make money Conducts its business with buyers, suppliers, and partners
Business Model
Stockholders, employees (including executives, managers, and workers), and board members
Internal stakeholders
Face - to - Face Meetings 67% Working Alone 13% Email 7% Calls 6% Business Meals 5% Public Events 2%
What do Strategic Leaders do?
Organizational and managerial skills
Capabilities
Cooperation by competitors to achieve a strategic objective
Co-opetition
The closer firms are located to each other within a Strategic Group Map, the more______ they are to each other
Competitive
It's a firms ability to generate above average returns relative to competitors
Competitive Advantage
Superior performance relative to other competitors in the same industry or the industry average..
Competitive Advantage
The third variable (size of bubble or Z variable) in a Strategic Group reveals how an industry measures this
Competitive Advantage
As mentioned in your training session, Google and Samsung are increasingly becoming ________. With Google's acquisition of Motorola Mobility, the online search company launched its own line of smartphones and Chromebooks. Competitors Complements monopoly Oligopoly
Competitors
A product, service, or competency Adds value when used with the original product
Complements
It's the unique strength that is deeply embedded within a firm that creates higher value and can lead a firm towards competitive advantage
Core Competency
The X and Y variables in a SGM should never be this
Correlated
Allow companies to adapt to changing environments Focus employees on problem solving for the customer
Customer - Oriented Vision Statements
"competition"
Thread
As mentioned in your training session, what qualities make up a strong leader? Innate abilities and learning Only innate abilities Hard-working and responsible Learning and motivation
Innate abilities and learning
According to your training session, what are the three dimensions of the Triple Bottom Line? Economic, social, and legal Environmental, political, social Economic, social, ecological Legal, ecological, technological
Economic, social, ecological
Decreases in cost per unit Achieved as output increases
Economies of Scale
Producing two outputs at less cost Shares resources or technology
Economies of Scope
Silver Screen Cinemas Inc. and Digi Now Inc. are two companies that own and run movie theaters in malls and other commercial areas. While Silver Screen Cinemas Inc. pursues a cost-leadership strategy, Digi Now Inc. adopts a differentiation strategy. Which of the following statements is most likely true of this scenario? Silver Screen Cinemas and Digi Now will use a similar approach to create value for customers by attempting to offer everything to everybody. Silver Screen Cinemas will charge a premium price for its customers, while Digi Now will implement everyday low pricing. Digi Now will keep its customer service at an acceptable level, while Silver Screen Cinemas will provide superior customer service. Digi Now and Silver Screen Cinemas will not be direct competitors to each other, and their customer segments will overlap very little
Digi Now and Silver Screen Cinemas will not be direct competitors to each other, and their customer segments will overlap very little
These are the two resources that make up the Resource Based View theory
Intangible & Tangible
Any unplanned strategic initiative Bubbles up from the bottom of the organization Can influence and shape a firm's overall strategy
Emergent strategy
Customers, suppliers, alliance partners, creditors, unions, communities, media, and governments at various levels
External stakeholders
A local manufacturer that wants to be a global manufacturer faces few mobility barriers because it has not yet invested in supply chains, which can become outdated and expensive. True False
False
A value curve that zig-zags across the strategy canvas indicates a focused strategy that is likely to achieve a sustainable competitive advantage. True False
False
Because they are a crucial component of a firm's success, customers are considered internal stakeholders. True False
False
Intellectual property (IP) protections such as trademarks or patents are proven methods of establishing permanent barriers to imitation. True False
False
The three tasks of the AFI strategy framework are to Assemble a prototype, Find a buyer, and Incorporate feedback. False True
False
Name two criteria that determine Power of Buyer Strength
Few large buyers, backward vertical integration, buyers purchase large quantities, products are standardized, buyers face no switching cost
It's the strategy more closely associated with "economies of scope"
Integration
CEO Lay discusses the ways leaders can positively impact performance. Oprah Winfrey has positively impacted which company? Amazon General Motors HARPO Facebook
HARPO
As discussed in your training session, which of the following statements is false in regard to successful business strategies? Helps the firm to exploit external opportunities Helps the firm avoid internal threats Leverages the firm's strengths Mitigates firm weaknesses
Helps the firm avoid internal threats
CEO Lay discusses the question "Why are some companies sustainably better than others?" He mentions the company Blockbuster to emphasize which point? Hope is not a strategy History is full of better products that died None of the choices are correct Luck is not sustainable
History is full of better products that died
In your training session, CEO Lay provided different examples of companies that exhibit core competencies. Which company designed modern functional home furnishings at a low cost? Facebook IKEA Netflix Rooms to Go
IKEA
It's the most common value chain activity that support a low cost strategy
Inbound/Outbound Activities
It's the question that Porters Five Forces addresses
Industry Attractiveness
When discussing formulation in your training session, and effective guiding policy should be backed by strategic commitments which include: A set of coherent actions Investments and loans Only loans Investments and changes
Investments and changes
Beats Electronics has been able to outperform Audio-Technica, Bose, JBL, Skullcandy, Sennheiser, and Sony in the high-end, premium headphone market. Which of the following statements accurately explains one of the main reasons for the success of Beats? It produced the highest-quality headphones. It created a perception that owning its products was cool. It emphasized marketing over core competency. It focused on sponsoring future athletic superstars.
It created a perception that owning its products was cool.
As mentioned in your training session, which of the following is not a part of the economic factors of the PESTEL Model? Largely micro-economics Economy-wide phenomena Currency exchange rates and price stability are examples None of the choices are correct
Largely micro-economics
As mentioned in your training session, which of the following is not the focus of competition in regard to the differentiation strategy? Unique product features Marketing and promotion Launches of old products Service
Launches of old products
Level 5: Executive Level 4: Effective Leader Level 3: Competent Manager Level 2: Contributing Team Member Level 1: Highly Capable Indivual
Level - 5 Leadership Pyramid
Makes productive contributions through motivation, talent, knowledge, and skills.
Level 1: Highly Capable Individual
Uses high level of individual capability to work effectively with others in order to achieve team objectives.
Level 2: Contributing Team Member
Is efficient and effective in organizing resources to accomplish stated goals and objectives. Does the things right.
Level 3: Competent Manager
Presents compelling vision and mission to guide groups toward superior performance. Does the right things
Level 4: Effective Leader
Build enduring greatness through a combination of willpower and humility
Level 5: Executive
As the strategic manager of CutRite Scissors, you are tasked with producing a strategy for introducing a new line of premium scissors. Your competitor produces a line of similar scissors at a cost of $1 and sells them for $12. Because your company has inferior production capabilities, your scissors will cost $3 each to produce. However, your handle is proven to be more comfortable than your competitors'. Assuming you are guaranteed to sell the same number of units as your competitor, which of the following strategies is most likely to achieve a competitive advantage? Reduce the quality of materials used in CutRite scissors to bring unit costs down to $1, then sell the scissors for $12. Continue to produce CutRite scissors for $3 but set the price at $10. Offer a buy-one-get-one-free sale on CutRite scissors. Market CutRite scissors as a higher-quality alternative and sell them for $15.
Market CutRite scissors as a higher-quality alternative and sell them for $15.
"How do we accomplish our goals?"
Mission
It's the SWOT category(s) that can be applied in PESTEL analysis
Opportunity and Thread
It's when you charge the lowest price for a good/service regardless of firms cost
Price Leadership
These activities separate Porter's value chain into wo distinct components
Primary & Support
It's the value chain activity that is linked to sourcing the best possible suppliers
Procurement
Focus employees on improving existing products and services Often constraint in this ability
Product - Oriented Vision Statements
Combination of intended and emergent strategy
Realized strategy
A firm is a unique bundle of resources and capabilities These bundles differ across firms E.g. Southwest vs Alaska Airlines
Resource Heterogeneity
Resources don't move easily from firm to firm Resources are difficult to replicate Resources can last for a long time E.g. Southwest vs Continental Lite Airlines
Resource Immobility
Any assets that a firm can draw on
Resources
Of the following items, which is not a commonly used profitability metric in strategic management? Return on revenue (ROR) Return on equity (ROE) Return on invested capital (ROIC) Return on invested time (ROIT)
Return on invested time (ROIT)
As mentioned in your training session, which of the following is an example of the freemium business model? Gillette gave away its razors and sold the replacement cartridges for relatively high prices Some industries use this model presently for cable television, cellular service providers, and health clubs Spirit Airlines provides minimal flight service but allows customers to pay for additional services and upgrades, often at a premium Microsoft bundles Word and Excel and sells them combined at a discount
Spirit Airlines provides minimal flight service but allows customers to pay for additional services and upgrades, often at a premium
Step 1: Who are our stakeholders? Step 2: What are our stakeholders' interest and claims? Step 3: What opportunities and threats do our stakeholders present? Step 4: What Economic, legal, and philanthropic responsibilities do we have to our stakeholders? Step 5: What should we do to effectively address the stakeholder concerns?
Stakeholder Impact Analysis
Organizations, groups, and individuals Can affect or are affected by a firm's actions Have an interest in the performance and survival of the firm
Stakeholders
A unique position within an industry within an industry that allows the firm to provide value to customers, while controlling costs.
Strategic Positioning
A set of companies Pursue a similar strategy In the same industry
Strategic groups
A set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors
Strategy
"What commitments do we make, and what guardrails do we put in place, to act both legally and ethically as we pursue our vision and mission?"
Values
It's what the SWOT Analysis Stands for
Strength, Weakness, Opportunity, Threat
In the resourced-based view, resources fall into two categories. Which category is seen as visible, and has resources that have physical attributes? Tangible Capabilities Intangible Activities
Tangible
It's the proper identifying name for the following categories: Perfect Competition, Monopolistic Competition, Oligopoly, Monopoly
The SCP Framework
It's the tool used to determine if a firm has a temporary or sustained competitive advantage
The VRIO Framework
Clusters different firms into groups Is based on key strategic dimensions
The strategic group model (framework)
As mentioned in your training session, which of the following statements is true in regard to strategic trade-offs? Profile based on value creation and cost in a specific product market Seeks to create similar value vs. competitors There is tension between value creation and pressure to keep cost in check Seeks to create higher value vs. competitors
There is tension between value creation and pressure to keep cost in check
"Slower market growth"
Threat
Strategic Group Maps are made up of this many variable
Three (X,Y, & Z)
Product features -Enables differentiation Customer service -The only point of differentiation for a commoditized product / service Complements -Smartphone w/wo data plan
Three Drivers That Increase Perceived Value
New Ventures: financial and human capital Existing companies: profitable growth Charities: donations Universities: the best students and professors Sports teams: championships Celebrities: media attention
To achieve superior performance, companies compete for resources:
Accounting profitability Shareholder value creation Economic value creation
To measure and assess firm performance
It's the number of core competencies that generally leads a firm towards competitive advantage
Two
________ denotes the dollar amount a consumer would attach to a good or service. Utility Value Consumer surplus Economic contribution
Value
The greater, the better Enhances he likelihood of a competitive advantage
Value Creation - Costs = Economic Contribution
"What do we want to accomplish ultimately?"
Vision
Successful use of power and influence Directing the Activities of others Pursuing an organization's goal Enabling organizational competitive adavantage
What is Strategic Leadership?
Which of the following examples uses a focused differentiation strategy? a tennis pro shop that sells low-quality racquets priced at 150 dollars per racquet a coffee shop that offers mediocre lattes at a price of five dollars for a small latte a hotel chain that offers high-quality furnishings and service with room rates of under 75 dollars per night a cosmetics brand that offers superior skin lotion for sensitive skin priced at 100 dollars per bottle
a cosmetics brand that offers superior skin lotion for sensitive skin priced at 100 dollars per bottle
Competitive advantage goes to the firm that achieves the: largest economic value created lowest producer surplus. highest payable turnover. highest Cost of goods sold/Revenue ratio
argest economic value created
Tangles Costume Jewelry offers slightly lower quality merchandise than competitors at a much lower price. What strategy is Tangles using? cost-leadership differentiation niche marketing product diversification
cost-leadership
Value drivers support a ______ strategy while cost drivers support a ____ strategy
differentiation, low cost
In the pyramid of corporate social responsibility, ________ responsibilities are the foundational building block. economic ethical philanthropic legal
economic
A firm will fail to create a sustained competitive advantage when the: fit between its internal strengths and the external environment is static. source of its competitive advantage is causally ambiguous. source of its competitive advantage is socially complex. resource bundles exhibit heterogeneity and immobility.
fit between its internal strengths and the external environment is static.
In which of the following situations is a company that exists in the telecommunications industry most likely to face the highest threat of entry? if the company is able to put up a credible threat of retaliation if the capital requirements in the industry are high if the customer switching costs in the industry are high if the industry has recently become deregulated
if the industry has recently become deregulated
Strategic commitments are actions that are Inexpensive. long-term oriented. easy to reverse. easy to imitate.
long-term oriented.
The primary goal of a firm pursuing a blue ocean strategy should be to create the highest perceived value in its respective industry. build a reputation of being the lowest-cost producer in its chosen industry. offer a differentiated product or service at a low cost. achieve a less steep learning curve.
offer a differentiated product or service at a low cost.
Blue Billion Inc. is a large company that sells a variety of products such as cosmetics, jewelry, frozen foods, navigation electronics, and airplanes. Apart from this, the company also has a strong presence in the service industry through its chain of dance studios, casinos, and nightclubs. Each of its product divisions operates as an individual business and is responsible for its own profits and losses. Thus, these product divisions under Blue Billion can be referred to as limited liability companies. functional departments strategic business units. corporations.
strategic business units.
Peerless Inc., a large conglomerate, wants to liquidate its business in certain industries to improve its overall profitability. Which of the following industries would Peerless Inc. find it most difficult to exit? the management consultancy industry in which the company's fixed costs are low the steel industry in which the company has obligations like severance pay toward employees the corporate training industry in which the company's commitments are mostly short-term the e-commerce industry where the company has no long-term contractual agreements with suppliers
the steel industry in which the company has obligations like severance pay toward employees
Which of the following best describes a strategic trade-off? the tension between innovation and keeping manufacturing costs down the tension between maintaining both high-quality products and service the tension between value creation and the pressure to keep costs in check the tension between raising prices and keeping a loyal clientele
the tension between value creation and the pressure to keep costs in check
Visionary companies are able to outperform their competitors because their vision statements are more product-oriented. they provide more aspirational visions. their visions are primarily financial. they isolate internal stakeholders in defining their visions.
they provide more aspirational visions.
