MGMT FINAL

PESTEL- Sociocultural/demographic

Attitudes and approaches to health care Diverse and aging workforce Women in the workplace Concerns about environment

Porter's 5 Forces (External)

Bargaining Power of Suppliers Bargaining Power of Buyers Threat from competitors Threat from substitutes Barriers to entry or exit

Which of the following is NOT an entry barrier to an industry?

Bargaining power of suppliers

Which of the following is NOT important when considering whistle blowing?

Being personally motivated by the action

Blood banks are highly dependent on donors. In the terminology of industry analysis, which of the following statements about donors is accurate?

Blood donors are suppliers and are powerful because of the critical nature of what they provide to the blood bank.

The primary responsibility for Vision and Mission lies with:

CEO

Which of the following is NOT a strategic decision by Ford?

Changing steel suppliers to get a less expensive price for steel

Which of the following steps toward making an ethical decision includes utilizing checks such as the Platinum Rule test and the Mom test?

Check your instincts

Which of the following is LEAST helpful in a competitive analysis?

Conducting a PESTEL

Southwest Airlines has a complex interrelationship between its culture and staff that adds value in ways that other airlines cannot, such as jokes on flights or the cooperation between gate personnel and pilots. These examples illustrate which of the following criteria for sustainable competitive advantage?

Costly to imitate

Tips for doing Effective PESTEL:

Define the Industry Brainstorm all the possible External Factors that could affect the industry and/or company you are analyzing Pick the top 5-8 from your list of all the possible ones that are most likely to happen and that could have the greatest effect. Identify whether it creates an Opportunity or a Threat for the typical company in the industry Be precise and concise in wording

Which of the following steps to making an ethical decision follows the fact-gathering step?

Define the ethical issues

Core Competencies

Defining products, services, skills and capabilities that give a business advantages over its competitors.

Looking at the business model of a firm is:

a key part to evaluating a firm's overall strategic efforts.

A firm's mission is:

a statement of a firm's businesses in which it intends to compete and the customers it intends to serve.

Problems associated with acquisitions include all of the following EXCEPT

excessive time spent on the due diligence process.

Customer loyalty programs such as airline frequent flyer miles are an attempt to:

increase customers' switching costs.

Capital structure of a business:

amount of equity vs amount of debt

Moving into international markets is a particularly attractive strategy to firms whose domestic markets

are limited in opportunities for growth.

Firms use the five forces model of competition to identify the __________ of an industry, as measured by its __________.

attractiveness; profitability potential

Strategic Competitiveness Steps:

Formulation and implementation of a superior value creating strategy. Actions to achieve above average performance and returns What the firm will do/ not do Competitive advantage

Vision:

Picture of what the firms wants to be in future

PESTEL (External)

Political Economic Social Technological Environmental Legal

PESTEL - Political

Political events Economic policy Immigration Trade policy

Market Cap

Price per share * Number of outstanding shares

PESTEL- Technological

Product innovations Growth of the internet New communication technologies

PESTEL- Legal

Taxation Labor training Laws Deregulation Consumer privacy laws

Which of the following companies does not have a "network effect" advantage?

Tesla

A certain marble quarry provides a unique type of marble that is richly colored and strikingly veined. It has been used for churches and public buildings throughout the world. The architect of a new headquarters for a prestigious Fortune 500 firm has specified the use of this marble, and this marble only, for the project. Which of the following statements is MOST likely to be true?

The cost of the marble will be expensive because of the bargaining power of the supplier.

MoviePass is the firm that created a monthly movie pass for $19.95 that consumers could use to see as many movies at the theater as they wanted each month. What was the problem with its business model?:

The cost of the offering was more than what MoviePass could generate in revenue. There was no competitive advantage to the offering and movie theaters like AMC and Showcase could create that offer themselves. MoviePass lost money as the more movies that each customer watched each month, created even greater losses for MoviePass.

Which of the following is NOT part of evaluating a firm's business model:

Understanding how a firm expects raise money for acquisitions.

Strategy vs Tactics

While strategy is the action plan that takes you where you want to go, the tactics are the individual steps and actions that will get you there. (making choices vs. validating and executing)

Wholesome Pet Food has successfully specialized for 20 years in high-quality pet food made from all-natural ingredients and organically raised lamb. This brand has a strong following and is recommended by veterinarians who practice in affluent neighborhoods. If Wholesome's main supplier of lamb announces that the price for lamb will be 15 percent higher next year, which of the following is most likely?

Wholesome will probably be able to pass the cost on to its customers because they are less sensitive to price increases than the average buyer.

Compared to tangible resources, intangible resources are __________ and __________.

less visible; more difficult to copy

According to the five forces model, an attractive industry would have all of the following characteristics EXCEPT:

low barriers to entry.

A manufacturer of washing machines has expanded its plant and created excess capacity, just as the general economy takes a downturn. The company is likely to:

offer rebates and incentives to customers to promote sales.

Cross-border acquisitions are primarily made to

overcome barriers to entry in another country

A veterinary practice has added a pet boarding and grooming facility. Most of the practice's competitors also provide these services. The veterinary practice is gaining competitive:

parity

Blind taste-tests have shown that the taste of premium-priced vodkas and inexpensive vodkas are indistinguishable even to regular drinkers of vodka. But the sales of premium vodkas are thriving. This is an example of the:

perception of perceived prestige and status as a means of differentiating a product.

Backward integration occurs when a company

produces its own inputs

Outsourcing is the:

purchase of a value-creating activity from an external supplier.

To have the potential to become sources of competitive advantage, resources and capabilities must be non-substitutable, valuable, __________, and __________.

rare; costly to imitate

Which of the following reasons for diversification is most likely to increase the firm's value?

reducing costs through business restructuring

A major U.S. manufacturer of children's toys believes its main competitive advantage lies in its continuing development of innovative toys and games. The company is facing increasing competition on price, and it is strongly considering outsourcing to offshore firms as a means of reducing costs. The LAST function this firm should consider outsourcing is:

research and development.

A local restaurant, Farm Fresh Ingredients, has become highly successful through its menu, based solely on organically raised chicken and beef, and organic seasonal produce. It has opened new locations in other cities, and these new locations are becoming highly profitable. Farm Fresh can expect that, at best, its competitive advantage will be:

temporary

A multidomestic corporate-level strategy is one in which

the firm customizes the product for each country in which it competes.

All of the following are implications of strategic groups EXCEPT:

the strength of the five forces is the same across strategic groups.

Suppliers are powerful when:

they offer a credible threat of forward integration.

Companies can make profits without having a Vision or Mission statement. A well thought out Mission/Vision statement can help a company achieve above average returns.

true

Value chain analysis is a tool used to:

understand the parts of the firm's operation that create value and those that do not.

In the airline industry, frequent flyer programs, ticket kiosks, and e-ticketing are all examples of capabilities that are __________ but no longer __________.

valuable; rare

When a firm acquires its supplier, it is engaging in a(n)

vertical acquisition

Corporate-level strategy is concerned with and how to manage these businesses.

what product markets and businesses the firm should be in

PESTEL-Economical

* Market growth rates * Consumer demand * Inflation and interest rates

Why companies do strategy

- Management decisions of what and how to compete in the marketplace - Create long term sustainable competitive advantage - Earn above-average returns

Business-level strategy:

-Providing value to customers by exploiting core competencies in individual product markets -Intended to create differences between the firm's competitive position and those of its competitors -Competitive Scope: Broad and Narrow -Types of Business-Level Strategies: Cost Leadership, Differentiation, Focused Cost Leadership, Focused Differentiation, and Integrated Cost Leadership/ Differentiation

The Strategic Analysis Process

1. Clearly define the industry 2. External Analysis/PESTEL to determine factors affecting the industry 3. 5 Forces Analysis to look at attractiveness of industry and key forces at work 4. Internal Analysis to determine Core Competencies for the company 5. Competitive Analysis

Which of the following statements presents an accurate relationship between leadership and management?

A manager may or may not be a leader, and a leader may or may not be a manager.

What term refers to an interpersonal capability that includes the ability to perceive and express emotions, to understand and use them, and to manage emotions in oneself and in other people?

Emotional intelligence

PESTEL- Environmental

Energy consumption Renewable energy efforts Producing environmentally friendly products Minimizing a firm's environmental footprint

When establishing an agenda, which of the following would be an element of management?

Establishing timetables

Mission and Vision are the same thing. Many companies use them interchangeably and there is essentially no difference between the two.

False

A firm using a(n) __________ strategy generally needs to operate "below the radar" of larger and more resource rich firms that serve the broader market

Focused

21st Century Competition:

Globalization Rapid Tec change Global economy Increasing importance of knowledge and people

Mission Statement:

Has a more concrete, near-term focus on current products markets. Specifies the present business which the firm intends to compete in. (focused more on the how)

The following are important competitive success factors for top performing companies:

Having an entrepreneurial mindset Offering innovative products and services Focusing on customer needs Making effective use of valuable competencies

Which of the following is NOT a question that great managers ask themselves when making a tough ethical decisions?

How can I gain from this decision?

Business Model Questions (Internal)

How does a company create value? For Whom? How much does it cost? How do they make money? Do they have a source of competitive advantage?

A Company's Vision can:

Impact Culture Create a purpose that is not defined by sales and profits alone Help attract and retain talent

The difficulty in raising financial capital

Increase in global competition The global economy

Zara has pioneered "cheap chic" in clothing apparel. Zara offers current and desirable fashion goods at relatively low prices. To implement the strategy, Zara uses sophisticated designers and effective means of managing costs. These are all characteristics of which of the following business-level strategies?

Integrated cost leadership/differentiation

John Maxwell would agree with all of these statements except:

It is important for a leader to hire people just like themself to grow into future leaders

COSTCO has a strong business model because:

It offers great value to customers through low cost products It has figured out how to manage its costs while offering great prices to consumers. It has developed competitive advantage versus other club stores and similar competitors

The aircraft industry has long been dominated by two large aircraft manufacturers, Boeing and Airbus. The demand for major aircraft is low, and Boeing and Airbus aggressively compete for orders from airlines. Which of the following effects will these conditions have on the domestic airline industry?

It will make the airline industry more attractive because of decreased supplier power.

Which of the following is NOT true?

It would be relatively easily to be successful if a company developed a slightly better tasting cola beverage?

The main reason Tesla has NOT perfected its business model is because:

It's track record for profits has been inconsistent as the cost of running the company is very high causing uncertainty about the company and its ability to be profitable long-term.

Which of the following is a common leadership myth?

Leadership exists only at the top

​​Which of the following is not part of strategy?

Making decisions on what not to do Generating above-average returns and profits Making management decisions of what to do Identifying and developing long-term competitive advantage ​​All of these are important to strategy

In the last few years, all of the following have had a major effect on strategic planning EXCEPT:

Rapid pace of technological changes Increasing importance of knowledge

Vision Statement:

Reflects firms values and aspirations Challenges its people Recognizes firms internal and external competitive environments (more big picture)

What is strategy:

Set of management decisions of what and how to compete in a market place. - Designed to create long term sustainable competitive advantage. - Generate & earn above average returns.

If Southwest Airlines' employees lost their high enthusiasm and commitment to the company:

Southwest would have lost one of its competitive advantages, and its performance would be threatened.

Mission:

Specifies the businesses which the firm intends to compete and the customers it intends to serve

A key purpose of a vision and mission statement is to inform _________ what a firm is, what it seeks to accomplish, and who it seeks to serve.

Stakeholders

SWOT (overall internal)

Strengths, Weaknesses (internal) Opportunities, Threats (external)

ACME Corp. is a leading provider of radios to the commercial market. Its products all rely on printed circuit-board technology. ACME has protected its market leadership with continued advancements in this technology, which it patents. A competitor has developed a radio for this market with equal performance but that uses a software-based technology instead of circuit boards. ACME's technology leadership fails which of the following capability tests?

Substitutability test

Media content has moved from paper, tape, and film to a digital world based on Internet technology. From the perspective of the five forces model, which of the following forces is MOST relevant here?

Substitutes

A differentiation strategy can be effective in controlling the power of substitutes in an industry because:

customers develop brand loyalty.

A company pursuing the differentiation or focused differentiation strategy would tend to:

develop flexible systems that allow rapid response to customers' changing needs.

A global corporate-level strategy emphasizes

economies of scale

A U.S. manufacturer of adaptive devices for persons with disabilities is considering expanding internationally. It is a fairly small company, but it is looking for growth opportunities. This company should primarily consider the option of

exporting

All of the following are assumptions of the resource-based model EXCEPT:

firms acquire different resources and develop unique capabilities based on how they combine and use resources. differences in resources and capabilities are the basis of competitive advantage.

resources and capabilities are highly mobile across firms.

firms' performances across time are due primarily to their unique resources and capabilities rather than the industry's structural characteristics.

Chico's is a clothing retailer that targets middle-aged women who want stylish and appealing clothes that are suitable for the mature figure. Chico's has an extensive customer list, a frequent-buyer discount card, and frequent sales promotions to Chico's customers based on their spending levels. Chico's uses a(n) __________ strategy.

focused differentiation based on a buyer group

A transnational corporate-level strategy seeks to achieve

global efficiency and local responsiveness.

Target's brand promise "Expect More. Pay Less" and appeal to higher-income, fashion-conscious discount shoppers illustrates the __________ strategy.

integrated cost leadership/differentiation

Strategic Flexibility:

involves coping with the uncertainty and risks of hyper competitive environments. requires developing the capacity for continuous learning and applying the new and updated skills sets and competencies to the firm's competitive advantage.

Strategy:

is the creation of a unique & valuable position, involving a different set of activities (competitive advantage -cost vs. differentiation).