Chapter 1: Strategic Management and Strategic Competitiveness

Question 1

Strategic Competitiveness

Answer 1

A business process to formulate and implement a value creating strategy.

Question 2

Strategy

Answer 2

An integrated & coordinated set of commitments & actions designed to exploit core competencies & gain a competitive advantage.

Question 3

Competitive Advantage

Answer 3

When a business implements a chosen strategy & creates superior value for customers and when competitors are not able to imitate the value the business’ products create or find it too expensive to attempt imitation.

Question 4

Above-average Returns

Answer 4

Returns in excess of what an investor expects to earn from other investments with a similar amount of risk.

Question 5

Risk

Answer 5

An investor’s uncertainty about the economic gains or losses that will result from a particular investment.

Question 6

Average Returns

Answer 6

Returns equal to those an investor expects to earn from other investments possessing a similar amount of risk.

Question 7

Strategic Management Process

Answer 7

The full set of commitments, decisions, and actions firms take to achieve strategic competitiveness and earn above-average returns.

Question 8

Hypercompetition

Answer 8

A condition where competitors engage in intense rivalry, markets change quickly and often, and entry barriers are low.

Question 9

Global Economy

Answer 9

An economy in which goods, services, people, skills, and ideas move freely across geographic borders.

Question 10

Strategic Flexibility

Answer 10

A set of capabilities firms use to respond to various demands and opportunities existing in today’s dynamic and uncertain competitive environment.

Question 11

Resources

Answer 11

Inputs into a firm’s production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers.

Question 12

Capability

Answer 12

The capacity for a set of resources to perform a task or an activity in an integrative mannter.

Question 13

Core Competencies

Answer 13

Capabilities that serve as a source of competitive advantage for a firm over its rivals.

Question 14

Vision

Answer 14

A picture of what the firm wants to be and, in broad terms, what it wants to achieve.

Question 15

Mission

Answer 15

Specifies the businesses in which the firm intends to compete and the customers it intends to serve.

Question 16

Stakeholders

Answer 16

Individuals, groups, and organizations that can affect the firm’s vision and mission, are affected by the strategic outcomes achieved, and have enforceable claims on the firm’s performance.

Question 17

Strategic Leaders

Answer 17

People located in different areas and levels of the firm using the strategic management process to select actions that help the firm achieve its vision and fulfill its mission.

Question 18

Organizational Structure

Answer 18

The complex set of ideologies, symbols, and core value that individuals throughout the firm share and that influence how the firm conducts business.