Chapter 1 reading

Question 1

Example: even though the company is successful it must be constantly aware of changing conditions that might impact its costs, demand, and ability to perform.

Answer 1

Mcdonald’s

Question 2

above average-returns exceed investors’ expected levels of return…

Answer 2

for given risk levels

Question 3

Point out that in the long run, firms must earn_______ and provide investors with ______ if they are to survive.

Answer 3

at least average returns, average returns

Question 4

If a firm earns below-average returns and provides investors with below-average returns, investors will _____

Answer 4

withdraw their funds and place them in investments that earn at least average returns.

Question 5

In smaller new venture firms, performance is sometimes measured in terms of the _____ and ______ rather than more traditional profitability measures

Answer 5

amount, speed of growth

Question 6

A framework that can assist firms in their quest for strategic competitiveness is the

Answer 6

strategic management process

Question 7

______ among the three primary elements indicate the dynamic nature of the strategic management process: strategic inputs, strategic actions, and strategic outcomes

Answer 7

Feedback linkages

Question 8

_____ links the elements of the strategic management process together and helps firms continuously adjust or revise strategic inputs and strategic actions in order to achieve desired strategic outcomes.

Answer 8

Feedback

Question 9

two approaches to the strategic management process

Answer 9

industrial organization model

resource based model

Question 10

The _______ can be described as one in which the fundamental nature of competition is changing in a number of the world’s industries

Answer 10

competitive landscape

Question 11

The contemporary competitive landscape thus implies that traditional sources of competitive advantage—______ and ________—may not be as important in the future as they were in the past

Answer 11

economies of scale and large advertising budgets

Question 12

_______, a condition that results from the dynamics of strategic moves and countermoves among innovative, global firms

Answer 12

hypercompetition

Question 13

____ is seen as an extremely competitive market in which local market-seeking MNCs (multinational corporations) fiercely compete against other MNCs and local low-cost producers

Answer 13

China

Question 14

____ is now an exporter of local management talent.

example:

Answer 14

China, procter & gamble

Question 15

_________ is illustrated by the following: Financial capital might be obtained in one national market and used to buy raw materials in another one

Answer 15

globalization

Question 16

_________ is illustrated by the following: Manufacturing equipment bought from another market produces products sold in yet another market

Answer 16

globalization

Question 17

Global competition has increased performance standards in many dimensions, including:

Answer 17

quality, cost, productivity, product intro time, operational efficiency

Question 18

In the twenty-first century competitive landscape, only firms that meet, and perhaps exceed, ______ are likely to earn strategic competitiveness.

Answer 18

global standards

Question 19

Risks of globalization

Answer 19

liability of foreignness

overdiversification

Question 20

entry into international markets requires proper use of the _______.

Answer 20

strategic management process

Question 21

example of shorter product life cycles resulting from rapid diffusion of innovation

Answer 21

computer industry: hard disk drives

Question 22

The rapid diffusion of innovation may have made patents a source of competitive advantage only in the_______ and _______

Answer 22

pharmaceutical and chemical industries

Question 23

______ can destroy the value of existing technologies by replacing them with new ones. Current examples include _________

Answer 23

Disruptive technologies

the success of iPods, PDAs, and WiFi.

Question 24

number of PCs is expected to grow to ______ by 2015

Answer 24

2.3 billion

Question 25

there is a strong link between ____ and _____

Answer 25

knowledge and innovation

Question 26

• Shareholder value is increasingly influenced by the value of a firm’s _____

Answer 26

intangible assets

Question 27

This means that to achieve competitive advantage in the information-intensive competitive landscape, firms must move beyond accessing information to exploiting information by:

Answer 27

• Capturing intelligence
• Transforming intelligence into usable knowledge
• Embedding it as organizational learning
• Diffusing it rapidly throughout the organization

Question 28

However, those working within firms to develop strategic flexibility should understand that the task is not an easy one, largely because of _____ that can build up over time.

A firm’s focus and past core competencies may actually slow ______

Answer 28

inertia

change and strategic flexibility.

Question 29

______, which was a dominant paradigm from the 1960s through the 1980s

Answer 29

I/O model

Question 30

The I/O model has been supported by research indicating:
• ___% of firm profitability can be explained by industry characteristics
• ___% of firm profitability can be attributed to firm characteristics and the actions taken by the firm
• Overall, this indicates a _____ relationship—or even an _______—between industry characteristics (attractiveness) and firm strategies that result in firm performance

Answer 30

20
36
reciprocal
interrelationship

Question 31

_____ are inputs into a firm’s production process, such as capital equipment, individual employee’s skills, patents, brand names, finance, and talented managers

Answer 31

Resources

Question 32

_____ are the capacity for a set of resources to perform—integratively or in combination—a task or activity

Answer 32

Capabilities

Question 33

strategies should be selected that enable the firm to best exploit its core competencies, relative to opportunities in the external environment. One example of this is the experience of _____

Answer 33

Amazon that used its capabilities to market and distribute books using the Internet successfully to capture a 20-month first-mover advantage in this new marketplace

Question 34

Often related to functional skills (e.g., marketing at Philip Morris), ______—when developed, nurtured, and applied throughout a firm—may result in strategic competitiveness.

Answer 34

core competencies

Question 35

_____is “big picture” thinking with passion that helps people feel what they are supposed to be doing

Answer 35

vision

Question 36

• Rely on input from multiple key stakeholders

Answer 36

vision

Question 37

• Our vision is to be the world’s best quick service restaurant.

Answer 37

mcdonald’s vision statement

Question 38

• To make the automobile accessible to every American

Answer 38

ford’s vision

Question 39

the most effective vision statement results when the CEO…

Answer 39

involves a host of people to develop it

Question 40

A _____ should be clearly tied to the conditions in the firm’s external and internal environments and it must be achievable

Answer 40

vision statement

Question 41

A firm’s ___ is an externally focused application of its vision that states the firm’s unique purpose and the scope of its operations in product and market terms

Answer 41

mission

Question 42

host communities primary expectation

Answer 42

long term employment, tax revenues, minimum use of public support services

Question 43

At the level of _____, firms must at least minimally satisfy all stakeholders.

Answer 43

average returns

Question 44

When returns are ____, some stakeholders can be minimally satisfied, while others may be dissatisfied

Answer 44

below average