Exam 1 MAN 4720 Strategic Management

SWOT analysis

a planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats

competitive advantage

an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices. Is assessed relative to other competitors in the industry

what to do and what not to do

A well-devised strategy helps a firm understand

What guardrails do we put in place to act ethically and legally as we pursue our vision and mission?

Organizational core values help companies answer which question?

What is competitive parity

a firm's strategy of setting prices that are similar to those of major competitors

Resource-based

According to the ______ ______ view, firms are a distinctive collection of resources, capabilities, and competencies.

"great leaders"

According to the book Good to Great by Jim Collins, companies that were able to gain a competitive edge all have what in common?

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

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

High barriers to entry - a few large firms - differentiated products

In an oligopoly, which of the following conditions exist?

Indirectly

In contrast to primary activities, support activities add value _____, but are necessary to sustain primary activities

strategy

In order to achieve and sustain competitive advantage, a company devises and adopts a set of goal directed actions known collectively as a

Less

Managers have ______ direct influence over external forces in the firm's general environment than those in the firm's task environment

trade-offs

Managers often have to make decisions between two conflicting strategic options, otherwise known as

competitive parity

Michael's Deli is able to perform at the same level as its primary competitor. Michael's Deli has a

heterogeneity

state of being dissimilar, composition from unlike elements

Mission

A _______ outlines what an organization does while a vision outlines what the organization wants to do

A competitive advantage that lasts for a long period of time is said to be sustainable.

A competitive advantage that lasts for a long period of time is said to be ______________

Ethics and morals

A core values statement provides information to employees regarding the company's

Creating value, reinvesting profits to create more employment

A firm that successfully executes a strategy benefits society by

PESTEL model

A framework that categorizes and analyzes an important set of external factors (political, economic, sociocultural, technological, ecological, and legal) that might impinge upon a firm. These factors can create both opportunities and threats for the firm.

Five Forces Model

A framework that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy.

Industry

A group of companies that deal with more of less the same set of suppliers and buyers comprise an

Which of the following are elements of good strategy according to the AFI Framework?

A guiding policy to address the competitive challenge A diagnosis of the competitive challenge A set of coherent actions to implement the firm's guiding policy. All three are correct

four

A level - _________ leader presents a convincing vision and mission that helps groups improve their performance

Resource based

According to the ______ - ______ view, firms are a distinctive collection of resources, capabilities, and competencies

two

A Level- __________ leader is referred to as a Contributing Team Member.

Competitive disadvantage

A _______ occurs when a firm performs below the industry average or is outperformed by its competitors

orders, invoice, delivery

All of the following are examples of activities that create value,

Closely monitoring the firm's stock price

All of the following are examples of activities that create value, except (do not create value

Point-in-time snapshot of a moving target

Although the five forces is useful in understanding an industry's profit potential, it provides only a

Find meaning in their work

An inspiring vision helps employees

Competitive advantage

Beats' core competencies helped the company gain and maintain a _____ _____.

Difficult

By definition, resource immobility suggest that resources are _____________ to move from firm to firm

Technological innovations

Despite high barriers to entry, startups such as Tesla have been able to break into the US car market through

Consolidated

Firms have a tendency to change the industry structure in their favor, for example by making industries more ____ through mergers and acquisitions

How to implement Business strategy

Functional strategy answers which question?

Ecological

Global Warming would be an example of _____ factor in a firm's external environment

Dynamic capabilities

IBM's success navigating the ever-changing world of computer technology is due to it

55%

Researchers have determined that a firm's strategy can explain up to ____ of its performance

Increases

Strategic fit __________ the likelihood that a firm is able to gain a competitive advantage

Provide customer value while controlling costs

Strategic positioning allows managers to

The bulbs must have a lower cost than competitors' bulbs

The Bright Bulb light bulb company produces a line of LED bulbs that customers consider very similar to competitors' LED bulbs. Which of the following conditions must be true for Bright Buln to have a competitive advantage?

Value chain

The _____ describes the internal activities a firm engages in when transforming inputs into outputs

Sociocultural

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

Stakeholders

The groups of individuals who can impact or be impacted by a firm's actions are known as

The stronger the forces, the lower the industry's ability to earn profits

The key takeaway from the Five Forces Model is

The firm's strategy

The most important factor in determining firm performance is

threat

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

Bargaining power of suppliers

The pressures that industry suppliers can exert on an industry's profit potential, is also called the

Form a strategy that is tailored to the firm's unique strengths and weaknesses and the opportunities and threats in its environment

The purpose of a SWOT analysis is to

VRIO Framework

The resource-based framework that focuses on the value (V), rarity (R), imitability (I), and organizational (O) aspects of resources and capabilities.

The main driver of firm performance

The resource-based model view resources as

Threat of entry

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

Which of the following are forces in Porter's Five Forces Model?

Threat of new entrants - threat of substitute products or services - bargaining power of buyers

Monitor external factors - evaluate external trends

Through use of the PESTEL model, firms are able to do which of the following?

Black Swan Events

Unexpected, high-magnitude events that are beyond what modern society can usually predict

Actions that are costly, long-term oriented, and difficult to reverse

What are strategic commitments?

Forgetting knowledge - turnover of employees

What can cause an outflow of resources from a firm?

Forgetting knowledge, turnover of employees

What can cause an outflow of resources from a firm?

They create enduring greatness

What distinguishes a Level-5 leader from other levels of leaders?

That each firm has different resources

What does the concept of resource heterogeneity imply?

Lobbying - litigation - public relations

Which of the following are considered nonmarket strategies?

The accounting scandal at Enron The 9/11 terrorist attacks The Fukushima nuclear disaster

Which of the following are examples of a black swan event (select 3)

Having more negotiating power vis-à-vis suppliers Spreading fixed costs over more units Benefit from a more specialized division of labor

Which of the following are examples of economies of scale?

Laws - regulations - mandates

Which of the following are factors in a firm's legal environment? 3

Creating value Controlling costs

Which of the following are primary strategy objectives?

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

Which of the following are questions that managers are likely to ask when beginning the strategic management process? 3

A set of activities designed to achieve a sustainable competitive advantage

Which of the following could accurately be called a strategy?

Analysis, formulation, implementation

Which of the following elements compose strategic management?

Outsourcing activities to consumers

Which of the following is a strategy used by Threadless to reduce costs?

Employees, stockholders, board members

Which of the following is considered an internal stakeholder?

Vision

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

Because product-oriented companies have less flexibility to meet consumer needs

Why are businesses with product-oriented vision statements more likely to fall than businesses with customer-oriented vision statements?

To encourage employees to make ethical choices

Why might a company develop organizational core values?

Capabilities

______ are organizational and managerial skills necessary to orchestrate a diverse set of resources and deploy them strategically

Dynamic capabilities

______ describe a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources in its quest for competitive advantage

Path dependence

______ describes a process in which the options one faces in the current situation are limited by decisions made in the past

Tangible

______ resources have physical attributes and are visible

2008 Global Financial Crisis

is an example of a black swan event

Oligopoly

A market structure in which a few large firms dominate a market

AFI framework strategy

A model that links three interdependent strategic management tasks: (A) Analyze, (F) Formulate, and (I) Implement. That together, help managers plan and implement strategy that can improve performance and results in competitive advantage. (pg 18)

Low; many

A perfectly competitive industry has _____ entry barriers and ____ small firms

rare

A resource is ______ if the number of firms that possess it is less than the number of firms required to reach a state of perfect competition

1, 3, 5

According the the AFI framework, which of the following are elements of a good strategy? 1) A guiding policy to address the competitive challenge 2) Strong stakeholder involvement in the strategy formulation process 3) A set of coherent actions to implement the firm's guiding policy 4) A leadership group with relevant prior industry experience 5) A diagnosis of the competitive challenge

Offers helpful and effective input

According to the Level-5 Pyramid, a Level 1-leader typically shows which capability?

Rare and valuable

According to the VRIO framework, in order for a firm to gain a temporary competitive advantage, a resource must be AT LEAST both ______ and _______.

upper-echelons theory

According to the ____, effective leadership is the outcome of certain intrinsic talents as well as education

Outlining the vision, mission, and values of the organization

What is the first step in the strategic management process?

It should inspire employees It should make employees feel that their work is important

What should a successful vision do for an organization?

It should make employees feel that their work is important It should inspire employees

What should a successful vision do for an organization?

Product-oriented

What type of vision is most likely to fail?

Incumbent firms spend more to satisfy customers - Incumbent firms lower prices - Industry profit potential declines

When a firm enters an industry, which of the following often occur? 3

competitive advantage

When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to achieve a

Resources

_______ are any assets that a firm can draw on when formulating and implementing a strategy

Face-to-face meetings

_______ is/are a form of communication that enable the CEO to pick up on nonverbal information such as moods and body language

Business

_________ strategy addresses the question of HOW to compete.