MGMT 4842 ECU Midterm
_______ is the set of actions that its managers take to outperform the company's competitors and achieve superior profitability.
A strategy
Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called a
SWOT analysis.
A good example of vertical integration is a
crude oil refiner purchasing a firm engaged in drilling and exploring for oil.
When companies adopt the strategy-making and strategy-execution process, it requires they start by
developing a strategic vision, mission, and values.
Managers must chart a company's strategic course by
developing a thorough understanding of the company's external and internal environment.
Well-conceived visions are ________ and ________ to a particular organization and they avoid generic, feel-good statements that could apply to hundreds of organizations.
distinctive; specific
A useful way to identify a company's resources is to view them as
divided into two main categories, tangible and intangible.
A competitively valuable resource or capability is a company's
enabling foundation of its business model.
Which of the following is NOT one of the principal components of strategic significance in the PESTEL analysis?
environmental forces that include the competitive structure, the degree of industry fragmentation, and the mobility barriers that inhibit business
Strategic offensives should, as a general rule, be based on
exploiting a company's strongest competitive assets—its most valuable resources and capabilities.
The strategy-making, strategy-executing process is shaped by
external factors such as the industry's economic and competitive conditions and internal factors such as the company's collection of resources and capabilities.
Industry conditions change because of
important forces enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways.
Outsourcing strategies
involve farming out value chain activities presently performed in-house to outside specialists and strategic allies.
A hit-and-run or guerrilla warfare type offensive strategy
involves unexpected attacks (usually by a small-to-medium size competitor) to grab sales and market share from complacent or distracted rivals.
A company's business model
is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit.
The generic types of competitive strategies include
low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation strategies.
Managers of every company should be willing and ready to modify the strategy because
market conditions and circumstances are changing over time or the current strategy is clearly failing.
Merger and acquisition strategies
may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.
A low-cost leader's basis for competitive advantage is
meaningful lower overall costs than rivals on comparable products.
Strategy-making is
more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives.
Launching a preemptive strike type of offensive strategy entails
moving first to secure advantageous competitive assets that rivals can't readily match or duplicate.
In crafting a company's strategy, managers
need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals.
The essence of a broad differentiation strategy is to
offer unique product attributes in ways that are valuable and appealing and that buyers consider worth paying for.
A blue-ocean type of offensive strategy
offers growth in revenues and profits by discovering or inventing a new industry or distinct market segment that renders rivals largely irrelevant and allows a company to create and capture altogether new demand.
A company's strategic plan
outlines the competitive moves and approaches to be used in achieving the desired business results.
The faster a company's business environment is changing, the more critical it becomes for its managers to
pay attention to early warnings of future change and be willing to experiment to establish a market position in the future.
In order to be successful with a low-cost leadership strategy, company managers have to
perform value chain activities more cost-effectively than rivals and be proactive in revamping the firm's overall value chain to eliminate or bypass "nonessential" cost-producing activities.
Whatever strategic approach is adopted by a company to deliver value, it nearly always requires
performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match.
Driving-forces analysis has
practical value and is basic to the task of thinking strategically about where the industry is headed and how to prepare for the changes ahead.
A company achieves a competitive advantage when it
provides buyers with superior value compared to rival sellers or offers the same value at a lower cost.
A company's strategy is increasingly effective the more it can match the company strategy to competitive conditions, so the firm can
shift the competitive battle in favor of the firm by altering the underlying factors driving the five forces.
The best quantitative evidence of whether a company's present strategy is working well is
the caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.
What makes the marketplace a competitive battlefield?
the constant rivalry of firms to strengthen their standing with buyers and win a competitive edge over rivals
A company's resources and capabilities represent
the firm's competitive assets that determine its competitiveness and ability to succeed in the marketplace.
The most powerful and widely used conceptual tool for diagnosing the principal competitive pressures in a market is
the five forces framework.
Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where
the market is composed of distinctly different buyer groups who have different needs or use the product in different ways.
Which of the following is NOT one of the five forces of competitive pressures?
the power and influence of social/demographic trends
A company's realized strategy evolves from one version to the next due to
the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms.
The biggest and most important differences among the competitive strategies of different companies boil down to
whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation.
Which of the following is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies?
whether to employ a market share leadership strategy
A company's mission statement typically addresses which of the following questions?
Who are we and what do we do?
It is normal for a company's strategy to end up being
a blend of proactive actions to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions.
Every strategy needs
a distinctive element that attracts customers and produces a competitive edge.
For every emerging opportunity there exists
a market penetration curve, and this typically has an inflection point where the business model falls into place.
The difference between the concept of a company mission statement and the concept of a strategic vision is that
a mission statement typically concerns a company's purpose and its present business scope, whereas the principal concern of a strategic vision is a company's aspirations for its future.
A linked and closely integrated set of competitive assets centered around one or more cross-functional capabilities is termed
a resource bundle.
The difference between a resource and a capability is
a resource is a productive input or competitive asset, whereas a capability is the capacity of the firm to perform some internal activity competently.
What are value drivers?
a set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect
Which of the following generic types of competitive strategies is typically the "best" strategy for a company to employ?
a strategy that is well matched to a company's internal situation; underpinned by an appropriate set of resources, know-how, and competitive capabilities; and difficult for rivals to match
Which of the following is NOT an example of a defensive move to protect a company's market position and restrict a challenger's options for initiating a competitive attack?
challenging struggling runner-up firms that are on the verge of going under
In evaluating how well a company's strategy is working, the best place to start is with a
clear view of what that strategy entails.
A company that has competitive assets that are central to its company strategy and superior to those of rival firms creates a
competitive advantage over other companies.
A company's strategic vision concerns
A company's directional path and future product-market-customer-technology focus
Perceived value and signaling value are often an important part of a successful differentiation strategy because
buyers seldom will pay for value they don't perceive, no matter how real the value of the differentiating extras may be.
Why should long-run objectives take precedence over short-run objectives?
The focus is placed on improving performance in the near term.
The best indicator of how well a company's strategy is working is whether the company is
achieving its stated financial and strategic objectives, its financial performance is better than the industry average, and it is gaining customers and increasing its market share.
Adapting to new conditions like new innovations by competitors, fast-changing technological developments, and constantly evaluating what is working result in
an emergent strategy.
The "driving forces" in an industry
are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.
Winning a sustainable competitive edge over competitors does NOT hinge on which of the following?
building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost
Using the five forces model of competition to determine the character and strength of the competitive forces within a given industry involves
building the picture of competition in three steps: (1) identify the different parties involved, along with specific factors that bring about competitive pressures; (2) evaluate how strong the pressures stemming from each of the five forces are (strong, moderate or weak); and (3) determining whether the collective impact of the five competitive forces is conducive to earning attractive profits in the industry.
