Exam #2 Study

A policy mandate from the Government regarding carbon taxes would ________ the S-Curve for the electric plane industry.

Accelerate

These lower-priced vehicles may have a similar cost basis to the higher-priced models. The assertion then is that Audi, BMW and Mercedes are currently forgoing profit and giving younger consumers higher _______.

Buyer surplus

Brand and exclusivity are classic examples of intangible (psychological) value drivers... the video talks of these cheaper cars eroding this value driver for Mercedes and BMW. How have other car companies reconciled this issue?

By having a portfolio of brands (Toyota & Lexus, Volkswagon & Audi, Honda & Acura)

What is typically the Y-axis in an S-Curve depiction?

Volume

Where does the example fit?: IKEA is an illustration of social complexity, path dependency and causal ambiguity making it extremely tough to copy their business model.

Inimitable

Can you match the example with the industry lifecycle stage? Autonomous Driving Car Industry is beginning to be trialed by some of the major car manufacturers.

Introduction

The Battery Plane Industry is still clearly in the ______ stage i.e. "a new product or service is introduced in the market and innovators and early-adopting customers who are initially unfamiliar with the product make initial purchases."

Introduction

Urban Air Mobility is largely in which stage of the industry lifecycle?

Introduction

Which of the following is a common criticism of VRIO?

It creates an inwardly-looking perspective of strategy

Which of the following is not a common criticism of SWOT?

It is not very widely used

What insight or value does a VRIO create?

It provides a means for managers and practitioners to focus on a firm's most valuable elements when developing a strategy

What is the purpose of SWOT?

It provides a means to account for internal and external factors plus positive and negative factors confronting a firm, thereby providing a balanced perspective of strategic issues

What is the purpose of a Segmentation Analysis?

It provides a means to understand and partition a broad consumer or business market into subgroups of consumers or businesses (called segments), such that a firm can effectively target specific segments rather than the market as a whole.

Which of the following is an example of a firm that successfully jumped to a new S-Curve?

Kelley School of Business offering an online MBA Program

What is the first step in carrying out a vertical integration framework?

Lay out stages in an industry supply chain or business activity system and identify assets, resources, or activities associated with each stage.

The midwest heritage of Discover resonates with their typical archetype midwest customer. Midwest customers _____________ are typically thought of as friendly, rural, values-driven and conservative.

Psychographics

Where does the example fit?: Nike has been able to consistently capture and sponsor the best basketball players in the world... the scarcity of these superstar athletes allows Nike to develop a competitive advantage

Rare

Corning's competitors (Schott, Nipro, Stevanato & Bormioli) will struggle to replicate the vial innovation (the 'moat' that is it is 20 times stronger). This implies that Corning's capability is ________ & ________.

Rare & inimitable

_____________ refers to the extent to which consumers in a defined segment are likely to respond to marketing offers targeted at them.

Responsive

Which of the following statements about SWOT is most correct?

SWOT analysis is, in the eys of the scholarly community, remarkably under-theorized

In a segmentation analysis, what does S-T-P refer to?

Segmentation, Positioning, & Targeting

Transactors and Revolvers could be considered types of ________ or a partition of a broad consumer or a business market within subgroups of consumers or businesses.

Segments

Much of the value associated with luxury cars are intangible (Psychological) value drivers... however, the narrator discusses buttery leather seats, real wood dash panels, and premium sound systems. These three examples are ____________ i.e. there is a physical reason for the perceived value.

Tangible value drivers

Which of the following is not a rationale for effective segmentation analysis to drive competitive advantage and superior performance?

The core belief around understanding value resources that the firm has that can be the source of competitive advantage.

The Vertical Integration (make or buy) framework that can be used to inform vertical integration decisions by factoring the importance of an activity for a firm's competitive advantage and _______________.

The degree of difficulty in writing contracts for that activity

Why is it called an S-Curve?

The general trajectory of industry evolution appears like an 'S'

Which of the following is not a classic limitation of a Segmentation Analysis?

The segment has may large firms competing there.

Which of the following is not a limitation of business level strategies?

This model fails to address the alignment of value chain activities to support the basis of competitive advantage

In a SWOT analysis what does the 'T' signify?

Threat

Match the example with the SWOT element. If doing a SWOT for Uber Eats, where might you best put the intense competition between Postmates, Doordash and Grubhub?

Threats

What is typically the X-axis in an S-Curve depiction?

Time

What is the purpose of a VRIO analysis?

To systematically identify resources and capabilities that may serve as a key source of competitive advantage

What is the purpose of an S-curve analysis?

To understand and interpret the evolution of a market, product, or technology

Which of the following is the underlying theory that vertical integrationis based on?

Transaction Cost Economics

The emphasis on the potential wide-ranging application of Corning's via innovation illustrates step 5 in the VRIO application process. Which of the following is step #5?

Use the resource as a focal point for developing a strategy

Corning's capability in innovative glass manufacturing gives it a competitive advantage - the application of which framework/ tool would help explicitly support this assertion?

VRIO

Denis Johnson (VP & GM of Catalent) explains that the coating on the Corning vials helps to increase throughput. This could be used to support which of the VRIO components?

Valuable

Valor and Velocity glass vials leverage Corning's capability in glass innovation. These vials provide a number of benefits to buyers e.g. they can withstand extremely cold temperatures (optimized for mRNA vaccines) helping to reduce the breakage during the freezing process and increasing the fill-finish speeds of the pharmaceutical companies. Where would these benefits be positioned within a VRIO analysis?

Valuable

Where does the example fit?: Honda's ability to design & build engines allows them to increase the perceived value of its products.

Valuable

The increased price point is indicative of the tenet that: price is the number one indicator of consumer perceived __________.

Value

The symbolization of wealth, prestige and excess are all examples of ________ drivers i.e. unique features that will increase the perceived value of goods and services in the minds of consumers so they are willing to pay a higher price.

Value

This 'compromise' illustrates a foundational concept in strategy - the importance of making valuable tradeoffs for successful positions. The classic trade-off in the quest for competitive advantage is which of the following?

Value and Cost

How difficult is it to evaluate an activity based on it's centralness?

Very difficulty

Chicken sales would be classified as high in which of the vertical integration matrix axes?

Importance to competitive advantage

____________ refers to the extent to which marketers can reach the targeted segments with promotional or distribution efforts.

Accessible

____________ refers to the degree to which segments provide guidance for marketing decisions.

Actionable

The fuel savings which will enable regional commuting will increasingly act as a substitute to which industry?

All modes of transportation

Vertical Integration comes with risks or limitations - which of the following is not a typical limitation of vertical integrations?

All of the options are potential risks or limitations of a vertical integration strategy

Where does the example fit? Netflix is getting into the development of original TV content.

Backward vertical integration

Where does the example fit? Starbucks acquiring coffee plantations is Costa Rica

Backward vertical integration

Costco plans to ___________ and develop its own chicken farms.

Backward vertically integrate

The core contention of an S-curve model is that historically many markets, products, and technologies have followed a similar trajectory (which takes the form of a S shape). The _________ Industry seems to be several years ahead of the electric plane industry and so strategists could learn much from studying the evolution and milestone of this context.

Battery Electric Vehicle

The ___ segment base is made up of people who want to fly 1st class to the Maldives. This segment base is focused on purchasing, consumption, or usage (e.g. needs based, benefit sought, usage occasion, purchase frequency, customer loyalty, buyer readiness.)

Behavioral

The failure of the three examples outlined (BMW, Mercedes and Jaguar) illustrate the perils of straddling i.e. problems inherent in attempting to combine different strategic positions. This is commonly referred to as?

Being stuck in the middle

Which business level strategy does the following example best fit? Casper Mattress has been able to successfully reconcile both low cost through D2C while also creating value through product design and branding.

Blue Ocean/Integrated Strategy

Which of the following is not a typical resource classification?

Casual Resources

Which of the following statements is true of a strategic position?

Choosing a strategic position requires making important trade-offs between value and cost positions.

The manufacturing process that is detailed here is difficulty to imitate. A resource/capability is costly to imitate if other organizations do not possess it and cannot imitate, buy or substitute it at a reasonable price. Barney has identified three reasons why resources can be hard to imitate. Which of the following is NOT one of those three reasons?

Cognitive dissonance

Difficulty writing a contract to manage a transaction is not impacted by which of these factors?

Context

The example illustrates how relatively easy it was for Tyson to develop and enforce ______ with their suppliers.

Contracts

Which business-level strategy does the following example best fit? Walmart appeals to a wide variety of people through an emphasis on cost drivers - people are drawn to Walmart for cheap prices with everything under one roof.

Cost Leadership

What does the 'I' signify in the VRIO analysis?

Costly to imitate (inimitable)

Can you match the example with the industry lifecycle stage? The DVD Movie Rental Industry

Decline

Clearly, Honeywell is well aware of the emergence of a new S-Curve and is positioning itself to reap the benefits associated with this increase in demand. The emergence of Urban Air Mobility could cause the traditional automobile industry to enter into the ______ stage.

Decline

FICO (originally Fair, Isaac and Company) score is an assessment of credit worthiness. This could be positioned in ____________ i.e. Quantifiable population characteristics (e.g., age, gender, income, education, socioeconomic status, family size or situation)

Demographic

It is clear that CaptialOne, Discover, and American Express primarily segment their customers on the basis of income and creditworthiness. What segmentation basis would these criteria typically fall under?

Demographic

BMW, Audi and Mercedes all compete by offering luxury cars. These three businesses compete on the basis of _____________ i.e. an action plan the firm develops to produce goods or services that customers perceive as being unique in ways that are important to them.

Differentiation

Which business-level strategy does the following example best fit? Starbucks appeals to a wide variety of people on the basis of value - people are prepared to pay more for the cafe' experience and customized offerings.

Differentiation

Which of the following is not one of Porter's generic business-level strategies?

Economies of scale

The need to sell many cars to effectively compete in the automobile industry is typically summarized by which concept (s)?

Economies of scale and economies of scope

Which business-level strategy does the following example best fit? The Aston Martin One-77 car retails at almost $2 million dollars - it appeals to a very narrow niche and the basis of its appeal is uniqueness.

Focus Differentiation

The core goal of the strategist in the introductory stage is to...

Focus on facilitating wide-spread adoption i.e. crossing the chasm from early adopters to main stream adapters

Where does the example fit? Apple opening its own chain of retail stores

Forward vertical integration

Battery Electric Vehicles in the Automotive Industry can be best positioned as where in an S-Curve? This stage is categorized as: "sales explode as mainstream customers become familiar with the product or service and buy it, and prices fall as firms manage to attain experience and economies of scale and distribution channels are established."

Growth

In the _____________ phase, the strategy may focus on capturing new customers and striving to ensure that the focal firm's products, technologies, or ways of operating become the standard for the industry.

Growth

Tyson and Perdue clearly have a _______ power over Costco and the supermarket industry.

High

______________ refers to the extent to which managers can identify or recognize distinct groups within the marketplace.

Identifiable

The vertical integration framework is sometimes called which of the following?

Make-or-buy framework

_________________ is the notion not only that customers display differences in current and past characteristics but also that these differences are predictors of their future behavior.

Market Heterogeneity

Lithium ion batteries and electric propulsion technologies are creating new S-Curves in industries such as bus, automobile and truck manufacturing. Before the advent of these technologies, these industries were seen to be in the _______ stage for the last 50 or so years.

Mature

Can you match the example with the industry lifecycle stage? The Furniture Industry has been in this stage for a century or more

Maturity

Discover developed a strategic position to target the American ______________ by: charging no annual fees, offering simple rewards (i.e. cashback, miles), conducting all business online, and offering 24/7 US-based customer service. This helped to acquire new customers and retain customers who will revolve a balance every month.

Middle-class

The credit card issuance industry is classified as comprising establishments primarily engaged in providing credit by issuing credit cards. Credit card issuance provides the funds required to purchase goods and services in return for payment of the full balance or payments on an installment basis. Credit card banks are included in this industry. The _________ code for this is 522210.

NAICS

Where does the example fit? McDonalds opening an upscale hotel in Switzerland.

Not an example of vertical integration

Corning built the plant in Durham in order to be closer to pharmaceutical companies. This illustrates an awareness of the ______ element of VRIO i.e. the firm must utilize its management systems, processes, policies, organizational structure, and culture to be able to fully realize the potential of its valuable, rare, and costly to imitate resources and capabilities.

Organized

Corning's new factory in Durham will help Corning exploit its capability in vial innovation. Where in a VRIO context is Corning seeking to address? That is, a firm must utilize its management systems, processes, policies, organizational structure, and culture to be able to fully realize the potential of its valuable, rare, and costly to imitate resources and capabilities

Organized

Where does the example fit?: Microsoft and Windows had an organizational structure and coordinating mechanisms that allowed them to capture most of the market share and profit pools at the start of the PC era.

Organized

Sears' exclusive acceptance of the Discover card created acronomy with other stores, looking back one could potentially illustrate this as a _____ misstep i.e. 'creating perceptions in the minds of consumers about the nature of a company, its brands, and its products and services.'

Positioning

In a vertical value chain for this industry, according to the video which industry is appropriating most of the rents?

Poultry processors

Can you match the example with the industry lifecycle stage? The Rideshare Industry has seen consolidation and a few firms emerge

Shakeout

The contention in the video is that there is a low degree of difficulty for Costco to write contracts to the farmers. According to the Vertical Integration framework, Costco ________ enter the chicken farming industry themselves.

Should not

Match the example with the SWOT element. If doing a SWOT for Disney, where might you best put their current vertical integration strategy (where they own the animation studios, film distribution, theme parks and cruise ships, and their own video on demand service)?

Strengths

Range Rover's "strong outdoor heritage, luxurious interiors and widely acclaimed designs" would fit best in which of the following categories?

Strengths

What element of SWOT could filter in insights from a VRIO analysis?

Strengths

_____________ are factors that make a firm more competitive than its rivals. Areas in which a firm has superior resources or capabilities compared to competition. _______________ tend to focus on internal factors that are currently under firm's control.

Strengths

The reduction in revolving debt of customers could signify that Discover's core segment is becoming less __________ over time e.g. the extent to which revolving debt represents a sufficient size to be profitable.

Substantial

_____________ refers to the extent to which a segment or group of customers represents a sufficient size to be profitable. This could mean sufficiently large in number of people or in purchasing power.

Substantial

Which of the following is more of a value driver than a cost driver?

Superior customer service

Match the example with the SWOT element. If doing a SWOT analysis for Netflix, where might you best put their over reliance on Amazon Web Services for hosting capabilities?

Weaknesses

Which of the following academics were instrumental in the development of the Resource-Based View (RBV)?

Wernerfelt, Barney & Rumelt