SGMA Midterm

Which of the following elements function as limitations for organizational change?

- Anthem quest for satisfactory rather than optimal performance - Managers limiting the scope of options they are able or willing to consider - Preference for exploitation rather than exploration

The industry life cycle:

- Is an extension of the concept of the product life cycle - Uses the same stages as the product life cycle - Often lasts much longer than a typical product life cycle

The PC industry clearly began in the 1970's because:

- It did not exist at all prior to this time - The introduction phase was typical: no mass market, many product variants, small firms - By the 1980's, the growth phase had begun, with a design standard emerging

Singapore Airlines appears to have competitive advantages from:

- Lower costs than many of its rivals - Better plane utilization rates than its rivals - Better service levels than many of its rivals

Rivals can be pre-empted from entering a firm's markets only if:

- The market is small relative to the minimum efficient scale of production - There are significant first-mover advantage available to the firm

The relative bargaining power of buyers/suppliers depends on:

- The size and concentration of buyers relative to suppliers - access to information about products and costs - ability or threat to integrate vertically

Profit-making firms are about creating value:

- They must create value for several stakeholder groups if this is to result in sustainable long-term profit generation - Value to some stakeholders (e.g., customers) may be difficult to quantify in money terms

Companies' "book values" can be much less than their stock market valuations because

Accountants are generally required by accounting standards to ignore the value of brands and all other reputational assets

A dominant design is:

An emergent de facto industry standard broad product format

Dynamic capabilities:

Are the capacity to learn new capabilities

Appraising a firm's resources consists of:

Being very realistic yet creative about what can be achieved with what you've got

The fundamental choice for capability acquisitions is the decision to either:

Buy them or build them

The seven drivers of cost advantage:

Can be a useful framework within which to compare a firm's costs with its competitors

Corporate strategy and business strategy

Concern the scope of the firm's activities and how the firm competes in its chosen areas respectively

Modern strategy applied to the business world shares with military strategy

Decisions of significance to overall success, and major resource commitment

The fundamental role of strategy is to:

Determine how the firm will deploy its resources to satisfy its long-term goals, given the conditions in the competitive environment

If an industry has a stable environment and firms pursue similar strategies:

Firms with similar resources and capabilities should have similar profit rates

The starting point for managing change is:

For managers to recognize the sources of inertia or barriers to change

In our discussion of the resource-based view of the firm, we categorise the resources of a firm as

Human, Intangible and Tangible

To successfully imitate the strategy of another firm, an organization must:

Identify and diagnose the rival's advantage, believe in its ability to deliver a superior return, and, finally, acquire the necessary resource and capabilities

The idea with Porter's 5 Forces is to:

Identify which forces are relatively more powerful, and to assess their impact on competition and industry profitability

What should organizations seek to do with stakeholders that have high levels of interest in the organization but low power?

Keep informed

In many industries the market leaders

Manage to reconcile low costs with some effective differentiation

Porter's firm value chain is often used to:

Map out a firm's main activities into threshold and distinctive capabilities

Economies of scale are a barrier to entry because:

New entrants face the cost and risk of creating large-scale capacity to start with or a severe cost disadvantage if they enter on a smaller scale

The difference between a capability and a competence is:

No difference in this textbook where they are taken as interchangeable

Once value is created, it is, in general:

Not equally shared between customers and producers

Differentiation is when a firm:

Offers customers something valuable and unique for which customers are willing to pay a price premium

We need to appraise our resources and capabilities against:

Our competitors' resources and capabilities

"Strategic innovation" involves:

Pioneering in at least one of the three dimensions: 1. new industry 2. new customer segment 3. new source of competitive advantage

The difference between intended and realised strategy is:

Significant because studies suggest that only 10 to 30% of intended strategy becomes realised

Changing the industry structure is:

Sometimes possible even by small firms, if the mix of drivers for change and existing structure make it susceptible to change

If a firm's strategy ensures it is consistent with both its internal and external environment, it achieves:

Strategic fit

A market's boundaries are defined by:

Substitutability on both the demand side and the supply side, combined with an element of judgment depending on context and purpose

Strategy is fundamentally about:

Success in achieving long-term goals

The decline phase of the industry life cycle is caused by:

The emergence of a radically better substitute product, representing a new industry

One can view the connection between the general environment and the industry environment as:

The industry environment includes customers, competitors and suppliers, whereas the general environment matters to the extent that it affects the industry environment

The basic premise of industry analysis is that:

The level of profitability within an industry is largely determined by the industry structure

By the early 1980s, thinking on strategy had shifted to:

The positioning of firms in markets and a focus on competition

The value of the scenario analysis lies in:

The process of managers being involved in the analysis

The value to managers of understanding key success factors is:

To help maintain a strategic perspective of what needs to be done to survive, and help them avoid degenerating into a fire fighting approach

The statement that organizational capabilities are path dependent means that:

a company's capabilities today are the result of its history

Firms entering a new industry who were already established in a related industry are sometimes known as:

de alio entrants

Three characteristics of resources and capabilities determine the sustainability of the competitive advantage they offer

durability, transferability and replicability

The internal environment

focuses on the relationship between a firm's resources and capabilities and its business strategy

Jay Barney in his 1986 paper argues that a strong organizational culture

is potentially a very valuable strategic resource

Harley-Davidson retained its competitiveness in the motorcycle market by

making a virtue out of its traditional designs

The creation of organizational capabilities

requires conscious and systematic action by management

A 6th force - Complements - should arguably be added to Porter's 5 Forces Model because:

t's clear that since Porter devised his model, complementers have become more important

Competitive advantage depends on:

the existence of market imperfections