BCOR

the expected competitive intensity is_______, when the other four forces are______.

-weaker; weaker -stronger; stronger

Corporate strategy

concerns questions relating to where to compete in terms of industry, markets, and geography

Strategy implementation

concerns the organization, coordination, and integration of how work gets done.

New firms have been established in the airline and telecommunication industries after

deregulation

The obstacles that determine how easily a firm can leave an industry, are called

exit barriers

Although ______ coordination such as price fixing is illegal in the US, _____ coordination such as "an unspoken understanding" is not.

explicit, tacit

Airlines that are strategically committed to the hub-and -spoke model face high fixed costs to maintain their network of routes that affords global coverage. Such strategic commitment leads to high fixed costs and therefor decreased rivalry.

false

Which of the following are characteristics of a monopolistically competitive industry?

has many firms, a differentiated product, some obstacles to entry, and the ability to raise prices for relatively unique products while retaining customers. -obstacles to entry -the ability to raise prices for differentiated products -a differentiated product

Complement

is a product or service that adds value to the original product offering.

The threat of entry is high when capital requirements are ____ in comparison to the expected returns

low

An example of a recent innovation in PROCESS technology is:

nanotechnology

What is the first step in the strategic management process

outlining the vision, mission, and values of the organization

Strategy formulation

results in a guide policy to address the competitive challenge and comprises corporate, business and functional strategies

The intensity with companies in an industry jockey for market share and profitability is known as

rivalry

exit barriesr, strategic commitments, and competitive industry structure are important factors in determining the intensity of ____

rivalry

Functional strategy is primarily concerned with

strategy implementation

An______ is any activity a firm pursues to explore and develop new products and processes, new markets, or new ventures.

strategy initiative

The five forces of Porter's model include the threat of entry and substitutes, rivalry among existing competitors and the power of

suppliers and buyers

When a person that has been using a PC with a Microsoft windows operating system starts using an Apple computer, she w ill incur significant customer _______ costs.

switching

Business strategy addresses...

the question of HOW to compete.

both strategy formulation and strategy implementation are aspects of

the strategic management process

Demographic factors

-trends captures population characteristics related to age, gender, family size, ethinicity, sexual orientation, religion, and socioeconomic class.

If parts of a firm's intended strategy fall by the wayside, it is referred to as________

-unrealized strategy

advantages based on brand loyalty, proprietary technology, preferential access to raw materials, and favorable geographic locations are examples of

Advantages for new entrants

The term oligopoly comes from the Greek for

Few sellers

Business strategy is developed by

General managers in strategic business units

Defining organizational core values provides employees with information on how to accomplish the organization's....

Mission -Outlines what an organization does while a vision outlines what the organization wants to do.

A___ occurs when a firm has accrued significant market power and is changing the industry structure in its favor

Near monopoly

___ are the ethical standards and norms that govern the behavior of individuals within a firm or organization.

Organizational core values

___ planning is a strategy-planning activity in which top management envisions different what-if scenarios to anticipate plausible futures in order to derive strategic responses.

Scenario

The cultures, norms, and values of the society in which a firm competes are considered_____ factors

Sociocultural factors -Always differs across groups, managers need to closely monitor such trends and consider the implications for firm strategy.

When restrictive government policies do not exist or when industries become deregulated the ____ of entry is high

Threat

The risk that potential competitors will enter the industry is known as the

Threat of entry

The ___ is the idea that products or services available from outside the given industry will come close to meeting the needs of current customers

Threat of substitutes -the substitute offers an attractive price-performance trade-off -the buyer's cost of switching to the substitute is low

___________ strategic planning is a rational process through which executives attempt to program future success.

Top-down -is a rational process through which executives attempt to program future success -all intelligence and decision-making responsibilities are concentrated in the office of the CEO( is like a military general, leads the company strategically through competitive battles)

Which of the following terms best describes an organization's primary objective and what it ultimately wants to accomplish?

Vision

Entry barriers

Which are advantageous for incumbent firms, are obstacles that determine how easily a firm can enter an industry. Incumbent firms can benfit from several important of entry barriers

Scenario planning ask...

"what if?"

Porters five forces model,

- the stronger the five forces, the lower the industry's profit potential- making the industry less attractive for competitiors -the weaker it is, the greater the industry's profit potential

Production costs can be increased when

-Buyers demand higher quality and more service

What are the approaches that can be utilized when strategizing for competitive advantage?

-Strategy as planned emergence -scenario planning -strategic planning

Which of the following are questions that managers are likely to ask when beginning the strategic management process?

-What do we ultimately hope to achieve? -what are our values? -How can we achieve our goals?

According to Porter's model, which of the following should be consider when analyzing a firm's competition?

-buyers -suppliers -the threat of substitutes

Network effects

-desribe the positive effect that one user of a product or service has on the value of that product or service for other users. ex. the online auction site EBAy has more than 100 million active users, so buyers are more likely to find what they are looking for while sellers are more likely to find buyers for the items they are offering

Which of the following are important sources of entry barriers?

-economic of scale -network effects -customer switching costs -capital requirements -advantages independent of size -government policy -credible threat of retaliation

Which of the following are likely outcomes of a competitive rivalry based entirely on price cutting

-firms struggle to make profits -investment from firms drop off -most or all value is transferred to customers.

Strategy_____ concerns the organization, coordination and integration of how work gets done.

-implementation

Typical progression of steps in the traditional top-down strategic:

1. Analysis -vision mission, values -external analysis -internal analysis 2.Formulation -corporate strategy -business strategy -functional strategy 3. Implementation -structure, culture, and control -Corporate Governance and business ethics

Obstacles that determine how easily a firm can enter an industry, are called?

Entry barriers

If a member of the Eurozone defaults on their debt obligations

It could affect the US and other countries in the world

Deregulation of industries leads to intensified competition and higher value at lower prices for consumers. This is an example of_____ factors influencing business.

Legal includes the official outcomes of political processes as manifested in laws, mandates, regulations, and court decisions.

A_____ outlines whats an organization does while a vision outlines what the organization wants to do.

Mission

An industry in which only one firm supplies the market is known as

a monopoly

Global warming would be an example of____ factors in a firm's external environment

an ecological

When a focal company moves upstream in the industry value chain into his suppliers' business_____ occurs

backward integration

Why is employee involvement crucial when developing an inspiring vision and mission?

because: -belief in the vision and mission statement motivates employees -employees may develop helpful strategic initiatives

technological factores

capture the application of knowledge to create new processes and products, inlcude lean manufacturing

Vision:

captures an organization's aspirations and spells out what it ultimately wants to accomplish. -An effect vision pervades the organization with a sense of winning and motivates employees at all levels at aim for the same target, while leaving room for individual and team contributions/

What is the purpose of the strategic management process?

-to create a sustainable competitive advantage

Michael Porter developed the five forces to help firms do which of the following

-to help managers understand the profit potential of different industries and how they can position their respective firms to gain and sustain competitive advantage. -

Shortcoming of top-down strategic planning are that:

-formulation of strategy is separate from implementation -thinking about strategy is separate from doing it -information flows one way only: from top to down -we simply cannot know the future, there is no data -plans for the future can be wrong -there is uncertainty about the future.

Which of the following are examples of economies of scales?

-having more negotiating power vis-a-vis suppliers -spreading fixed costs over more units -benefit from a more specialized division of labor benefit from a more specialized division of labor, and demand better terms from their suppliers. -drive down the cost per unit -allowing large incumbent firms to enjoy a cost advantage over new entrants who cannot muster such scales.

Which of the following is issues involving CORPORATE strategy formulation?

-in which industry to compete -in which geographic location to compete -how to compete

When a new firm enters an industry, which of the following often occurs?

-incumbent firms spend more to satisfy customers -industry profit potential declines -incumbent firms lower prices

Which of the following are characteristics of a monopolistically competitive industry?

-industry has many firms, -differentiation product -some obstacles to entry -the ability to raise prices for a relatively unique product while retaining customers

A perfectly competitive industry: A perfectly competitive industry has_____ entry barriers and ___ small firms

-is fragmented and has many small firms to raise its price low; many

what should a successful vision do for an organization?

-it should inspire employees -it should make employees fee that their work is important.

What should a successful vision do for an organization?

-it should inspire employees -it should make employees feel that their work is important.

Which are examples of commonly encountered capital requirements

-managing a production process -paying for start-losses -setting up production facilities

A utility companies tend to serve a whole market exclusively, they are known as_______ because the government involved believe that the product or service would not be supplied otherwise.

-natural monopolies

Which of the following help determine competitive industry structure?

-number and size of its competitors -the firms degree of pricing power -the type of product or service -the height of entry barriers

according to the five forces model, a firm seeking to compete in an established industry should seek to do which of the following?

-position itself in a way that relaxes the constraints of strong forces -position itself in a way that leverages weak forces

Which of the following are examples of commonly encountered capital requirements?

-setting up production facilities -paying for start-up losses -managing a production process "Price of the entry ticket " into a new industry.

What are the approaches tat can be utilized when strategizing for competitive advantage?

-strategic planning -scenario planning -strategy as planned emergence

Despite high barriers to entry, startups sue as Tesia have been able to break in to the US car market through:

-technological innovations

Shortcomings of top-down strategic planning are that:

-there is uncertainty about the future -plans for the future can be wrong

Business strategy

concerns the question of how to compete, Three generic business strategies are available: -cost leadership -differentiation -value innovation

Illusion of control

describes the tendency of managers to overestimate their ability to manage events

Upper-echelons theory views organizational outcomes as a reflection of the values of the

top management team

High exit barriers lead to intense rivalry? t or f

true

If parts of a firm's intended strategy fall by the wayside, it is referred to as

unrealized strategy

To determine economic value, one must subtract the cost of production from the

value of a firm's product or service.

A firm's strategic position relates to its ability to create ____ for customers while containing the ____ to do so.

value, cost

Product-oriented

vision statements do not describe how to provide solutions to customer needs