management midterm

A company is best described as a _____ to an existing company if customers value the existing company's productor service offering more when they are able to combine it with the other company's product or service.

complementor

maturity

consolidation of industry and excess capacity removed arlines industry or shipping industry

V - P

consumer surplus

Clean Rinse Shampoo has been the leader of hair-cleaning products for about 40 years. However, this company relied too long on its competency without refining or upgrading its product. As a result, other shampoo companies that began to offer organic shampoo gained a competitive advantage over Clean Rinse. This case is an example of

core rigidity

differentiation

create higher value by delivering products/services with unique features

cost leadership

create similar value by delivering product/services at a lower cost and lower price than competitors

dynamic capabilities are a firms ability to

create, deploy, modify, upgrade its resources over time

path dependence

current alternatives are limited by past decisions GM's problems competing with Toyota

bargaining power of buyers

customer concentration threat of backwards integration

In the context of SWOT analysis, which of the following best exemplies a rm's internal weakness?

decline in the rm's market share

early adopters

demand driver by the intuition and vision of the tech

V - C

economic value created

threat of new entrants

economies of scale network effects switching costs

The PESTEL factors are independent and are best considered separately.

false

economic: how is unemployment related to entrepreneurship?

famous companies started during recessionary periods

P - C

firms profit

technology enthusiasts

focused on the technology

growth

innovation gains market acceptance until it reaches a standard from product to process innovation (just in time) Blu-Ray DVD vs HD DVD

industry life cycle

introduction growth shakeout maturity decline

rivalry among existing competitors

competitive structure industry growth exit barriers

subscription based

users pay for access to a product during the payment term (Netflix)

Level 3: Contributing Team Member

uses high level of individual capability to work effecitvely with others in order to achieve team objectives

late majority

wait until they think they can master the technology

mission

what an org does it defines the means by which the vision is accomplished

vision

what an org wants to accomplish product vs consumer oriented

Which of the following situations will have greater effects from economies of scale than from learning effects?

when mass manufacturing pens

macro-environment analysis

PESTEL framework

core rigidity

a former core competency that turned into a liability as the environment changed

At a certain output level, the per-unit cost incurred by a firm to manufacture a product is $5. Other factors remaining constant, what will be the new per-unit cost if the cumulative output is doubled, and the firm is able to achieve an 80 percent learning curve?

$4

measuring competitive advantage

1. asses firm performance 2. benchmark to the industry average / competitors

elements of a good stratey

1. diagnosis - competitive challenges 2. guiding policy - approach to deal with competitive challenges 3. coherent actions - to implement the guiding policy

nelsons example

1. nelsons fleet was outnumbered 2. nelson decided to change the traditional way a naval combat takes 3. nelsons fleet sailed in two rows, perpendicular to spanish fleeet 4. nelson created isolated combats counting on the expertise of his captians

Osion Electronics Inc. incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario?

450

industry analysis

5 forces model

The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle. Which of the following statements is most likely true of StoreAll Inc. in this scenario?

A. It has a competitive advantage in the industry.

If SA Pharmaceuticals obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies?

Comparing the return to the return on invested capital obtained by other rms in the same industry

compliments

DVRS

innovation

IKEA - stylish furniture in a flat pack delivery

If Finolo and Ethver, companies that manufacture televisions, develop the same customer knowledge base and create products that provide the same customer appeal as Invoro, a market leader in consumer electronics, then

Invoro will have a resource that is valuable but no longer rare.

Level 3: Competent Manager

Is efficient and effective in organizing resources to accomplish stated goals and objectives. Does things right.

Level 4: Effective Leader

Presents compelling vision and mission to guide groups toward superior performance. Does the right things.

How are the two approaches, strategic planning and scenario planning, different from the strategy-as-planned emergence approach?

Relative to strategic planning andscenario planning, strategy as a planned emergence model is a less formal and less stylized approach to the development of strategy

Which of the following stages of the strategic management process involves an evaluation of a rm's external and internal environments?

Strategy analysis

Which of the following strategies best illustrates a functional strategy?

The production manager at the apparel division of Wilder Style Co. has decided that the department will hire contract workers for three months to meet the temporary demand.

Which of the following statements is not true about the ve forces in Porter's competitive analysis model?

The stronger the ve forces in an industry, the greater the industry's prot potential.

economic value creation equation components

V = total perceived consumer benefits C = firms costs P = price

willingness to pay

above price profit and cost, what consumers are willing to pay extra

dimensions of performance

accounting, shareholder value, economic value

Apples dynamic capabilities

allowed it to redefine the markets for mobile devices and computing, in particular in music, smartphones, and media content and makes the competitiors rethink

learning curve effect

as the cumulative output increase, cost per unit decreases

freemium = free + premium

basic features free of charge but user pay for premium services

strategic leadership

behaviors and styles of top managers that influence others

how to sustain a competitive advantage

better expectations of FV of a resource Path dependence Casual ambiguity social complexity

closed innovation

bottleneck looking

Level 5: Executive

builds enduring greatness through a combination of willpower and humility

resource heterogeneity

bundles of resources, capabilities, and competencies differ across firms

better expectations of FV of a resource

buy at low cost nike signing young and promising athletes record labels finding cheap talent

quality

can increase perceived value and lower cost (V - C)

introduction

capital intensive and small growth, emphasis on product features iPhone in 2008

experience curve effect

captures both learning effects and process improvements

casual ambiguity

cause of sucess or failure is not apparent

blue ocean

combination of creating higher value but getting lower costs

Trung has been an employee with PureEnergy Inc. for 15 years. He started with an entry-level job, and today he is a manager of an entire division. Over the years, Trung has acquired a reputation for doing the right things in the company. Hence, as an efficient leader, he is capable of effectively communicating and motivating his subordinates to work toward the company's vision and mission. According to the Level-5 leadership pyramid, which is the highest level of leadership Trung has reached so far?

level 4

Five years ago, Palomino Airline was able to get a strong foothold in the airline industry by hiring a few pilots and crew and renting two airplanes, which ew routes between Denver, Omaha, Pierre, Cheyenne, and Helena. Which of the following summarizes the above factors that enabled Palomino to get started?

low entry barriers

Level 1: Highly Capable Individual

makes productive contributions through motivation, talent, knowledge, and skills

scenario planning

managers envision different what-if scenarios to anticipate plausible futures

Corner Market Inc. is a supermarket chain. Due to strong competition from other stores in the industry, Corner Market has aggressively used branding, pricing, and superior customer service to uniquely position itself in the market. As a result, the supermarket chain has been able to differentiate itself from its competitors and sell its products at higher prices. Which of the following industry competitive structures does this scenario best illustrate?

monopolistic competition

product innovations

new or recombine knowledge embodied in new products electric vehicle, smartphones

process innovations

news ways to produce existing products or deliver existing services made possible through advances like the internet, lean manufacturing, six sigma

the oil shock in the 1970s created

orgs moving from long term planning to a more flexible approach

triple bottom line

people profit planet

how is the effect of economies of scale different from the effect of the learning curve

pizza chain

business model

plan that explains how the firm intends to make money and how to conduct business with buyers suppliers and partners

economies of scope

producing two products together is cheaper than producing them independently

customer service

product replacement, guaranteed satisfaction

economies of scale

production becomes more efficient as the number of goods being produced increases

strategic planning

rational top down process to program activities

decline

remaining excess capacity leads to a stronger competitive intensity changes in external environment can lead to this stage - exit, harvest, maintain, consolidate

shakeout

replacement or repeat purchases, competitive intensity increases winners are usually low cost leaders

two main assumptions in a resource based view

resource heterogeneity resource immobility

elements to be protected to lead to sustained competitive advantage

resources coure competencies capabilities

resource immobility

resources tend to be sticky and dont move easily from firm to firm

competitor analysis

strategic group mapping

strategy as planned emergence

strategic initiatives are activities that firms pursue to explore

A rm's _____ relates to its ability to create value for customers (V) while containing the cost to do so (C).

strategic position

early majority

strong sense of practicality - weighing benefits and costs

amazon is a combination of

subscription and pay as you go

strategy is about creating

superior value while containing the cost to create it

bargaining power of suppliers

supplier concentration switching costs differentiated products

business level strategy

the goal directed actions managers take in their quest for competitive advantage when competing in a single product market who what why how

what other factors can influence the Strategic management process

the idea that foundation date has an impact on the future operation of the org

what is strategy

the set of goal-directed actions a firm takes to gain and sustain superior performance relative to competitors

The market for 3-D televisions is in the introduction stage of the industry life cycle. What does this imply?

there are only a few competitors in the 3-d television market

laggards

think about someone adopting a cell phone today - they enter in the mature stage or later

upper-echelon theory

top management team executives' experiences, values, and personalties greatly influence their interpretations of the situations the face and affect their choices

product features

tracking option in shipping industry

Both senior executives' judgment and behavior inuence the formation and implementation of strategy.

true

social complexity

two or more systems social or business systems interact creating many possibilities

ecological/legal

type of fuel required to sail in certain areas of the eu

pay as you go

user pays for only the services she consumes