Chapter 6

Question 1

What are the 2 most common tools to analyze the external enviroment of a firm.

Answer 1

Porters five forces model and stakeholder analysis.

Question 2

What are the five forces of Porters model?

Answer 2

1. The degree of existing rivalry.
2. Threat of potential entrants.
3. Bargaining power of suppliers.
4. Bargaining power of buyers.
5. Threat of substitutes.

Question 3

What is meant by switching costs?

Answer 3

Factors that make it difficult or expensive to change suppliers or buyers, such as investments in specialized assets to work with a particular supplier or buyer.

Question 4

What is meant by vertical integration? (forward or backwards)

Answer 4

Getting into the business of one’s suppliers (backward vertical integration) or one’s buyers (forward vertical integration)

Question 5

What are 3 internal strategy formation models?

Answer 5

Resource base view, core competencies and dynamic capabilities.

Question 6

What can give a resources a sustained competitive advantage?

Answer 6

They must be rare, valuable, durable and inimitable.

Question 7

What does causal ambiguity mean?

Answer 7

The relationship between a resource and the outcome it produces is poorly understood (the causal mechanism is ambiguous)

Question 8

What are the 3 questions to identify core competencies?

Answer 8

Is it a source of competitive differentation?
Does it transcend a single business?
Is it hard to imitate for competitors?

Question 9

What is meant by dynamic capabilities?

Answer 9

A set of abilities that make a firm more agile and responsive to
change.

Question 10

What is the critique for the resource based view?

Answer 10

That markets change very fast and are evolving.

Question 11

What is meant by a strategic intent?

Answer 11

A company’s strategic intent is a long-term goal that is ambitious, builds upon and stretches the firm’s existing core competencies, and draws from all levels of the organization.