Exam 1

Question 1

What are the elements of strategy proposed by Hambrick and Fredrickson?

Answer 1

Arenas, Vehicles, Differentiators, Staging, Economic Logic

Question 2

According to Hambrick and Fredrickson, what several factors influence the strategic element of staging?

Answer 2

Resources, urgency, achievement of credibility, pursuit of early wins.

Question 3

Which five characteristics define the arena a company plays in according to Hambrick and Fredrickson?

Answer 3

Product categories, market segments, geographic areas, core technologies, value creation stages.

Question 4

Name two case studies from Hambrick and Fredrickson.

Answer 4

The New York Times achieves economic logic by offering a superior product at a premium. GKN Sinter Metals leverages systemic advantages to maintain low production costs.

Question 5

According to Porter’s, “CEO as a Strategist”, what three key principles underly strategic positioning?

Answer 5

The creation of a unique and valuable position involving a different set of activities. Making strategic trade-offs. Ensuring that strategic activities fit or reinforce one another.

Question 6

Generally speaking, what does Porter say is the role of the CEO as it pertains to strategy?

Answer 6

The CEO is responsible for providing the discipline required to sustain a unique position over time.

Question 7

According to Porter, if a business’s activities are easily imitated, how else can it be distinctive?

Answer 7

It can perform those activities in ways that are different from competitors.

Question 8

Broadly speaking, what are three ways Porter says businesses can create a unique position.

Answer 8

Serve few needs of many customers. Serve many needs of a few customers. Serve many needs of many customers in a narrow market.

Question 9

According to Rumelt, what is the difference between a list of things to accomplish and strategy?

Answer 9

Strategy is not merely a list of things to accomplish. Strategy requires a business to focus resources and attention on one or a few pivotal objectives that lead to a cascade of favorable outcomes.

Question 10

According to Rumelt, what is the kernel of a good strategy?

Answer 10

Diagnosis, Guiding Policy, Coherent Actions

Question 11

According to Rumelt, what is one company that exemplifies the kernel model well, and how did it do that?

Answer 11

Nvidia. Diagnosis: 3-D chip industry was advancing quickly, with new chips coming out every 18 months. Guiding Policy: Nvidia’s objective is to come out with a new chip every 6 months, 3x the industry average. Coherent Actions: Nvidia established 3 development teams whose timelines overlapped, and invested in simulation and emulation facilities to avoid delays.

Question 12

In “Closing the Gap Between Strategy and Execution”, what does Sull say is the best strategic framework?

Answer 12

It is best to approach strategy as a loop because a loop accommodates a more iterative and adaptive strategy.

Question 13

What are the four discussion types Sull says enable the loop approach to strategy?

Answer 13

Informal and formal. Short and long. One on one. Group.

Question 14

What does Sull say are the six steps to the loop model.

Answer 14

Conduct research and develop a view, but retain a tone of inquiry rather than advocacy. Sense-making discussions. Start making sense. Make decisions using rules as a way to choose among good options. Make it happen using promises, which are public, voluntary, actively negotiated, explicit, and linked to corporate priorities. Finally, make revisions by exploring the difference between what was expected and what happened.

Question 15

What is the insight deficit?

Answer 15

Something your company sees but no one else does. It is foundational to competitive advantage.

Question 16

In Harris and Tayler’s, “Don’t Let Metrics Undermine Your Business”, what is the surrogate problem.

Answer 16

When employee’s performance is measured by certain metrics rather than the extent to which they are contributing to the company’s strategy, metrics become a surrogate for strategy. This can lead to perverse incentives.

Question 17

According to Gadiesh and Gilbert, what are profit pools?

Answer 17

The pattern of profit concentration in an industry is often different from the pattern of revenue concentration in an industry. A profit pool is the total profits earned in an industry at all points along the industry’s value chain.

Question 18

According to Gadiesh and Gilbert, what does a profit pool map show?

Answer 18

A profit pool map shows the share of margin (vertical) compared with the share of revenues (horizontal) for each revenue-earning activity in a value chain.

Question 19

According to Gadiesh and Gilbert, what are choke points? What is an example of a chokepoint?

Answer 19

Chokepoints are particular business activities that control the flow of profits throughout an industry. An example of a chokepoint is what Microsoft tried to generate when it attempted to acquire Intuit in the 1990s. It would have been able to control an important platform for online banking, meaning it would take a share of every banking transaction performed over the internet.

Question 20

What are two examples of companies taking advantage of profit pools, according to Gadiesh and Gilbert?

Answer 20

Dell identified a valuable profit pool in selling PCs using a DTC model rather than retail. Dell wanted to grow revenues, so it transitioned to the retail market. In retail, Dell couldn’t make the same margins, and so it failed financially.

Anheuser Busch transitioned to canning their beers and scaling their premium business, recognizing the profit pools that existed in selling premium beers. By achieving rapid scale, they created a barrier to entry for other businesses.

Question 21

According to Bingham, Eisenhardt, & Furr, “Which Strategy When?” (BE&F), what are the 3 types of strategies? In each strategy model, how are resources utilized?

Answer 21

Position Strategies, Leverage Strategies, and Opportunity Strategies.

A position strategy depends on tightly interlocked, reinforcing mundane resources. A leverage strategy depends on loosely combined, unique, strategic resources. An opportunity strategy depends on loosely combined resources, applied using a few strategic processes and simple rules designed to capture new opportunities.

Question 22

What are the 3 things Bingham, Eisenhardt, & Furr say businesses should consider in choosing their strategy?

Answer 22

Circumstances, Resources, and Combination of Resources.

Question 23

According to Heracleous and Wirtz, what is Singapore Airlines able to achieve that Porter would say is an “exception to the rule.”

Answer 23

Singapore Airlines is able to achieve a dual strategy, in which there is no trade-off between low cost and quality.

Question 24

Which four paradoxes, according to H&W, does Singapore Airlines manage in achieving its dual strategy?

Answer 24

Providing excellent service in a cost-effective manner. Achieving innovation in both a centralized and decentralized way. Being a technology leader and follower. Achieving both standardization and personalization in its approach to customer service.

Question 25

What are four ways, according to H&W, businesses can achieve a dual strategy?

Answer 25

Harness power of people and culture. Take advantage of technology. Utilize power of business ecosystems. Make strategic investment decisions.

Question 26

According to Jacobides, what are ecosystems?

Answer 26

Ecosystems are constructive alliances among industry peers that provide mutual benefits.

Question 27

According to Jacobides, what are 3 reasons ecosystems emerge?

Answer 27

Rollback of regulator protections. Blurring of separations between products and services. Technology that revolutionizes how companies service customers.

Question 28

According to Clemons and Santamaria (Maneuver Warfare), what are four words that might describe both a business and war environment?

Answer 28

Friction, Uncertainty, Fluidity, Disorder.

Question 29

According to Clemons and Santamaria (CS), what are 6 tactics businesses or armies might use?

Answer 29

Boldness, Surprise, Focus, Decentralized Decisionmaking, Rapid Tempo, Combined Arms.

Question 30

What is Coyne and Horn’s 3 part approach to predicting a competitor’s response to a strategic move?

Answer 30

Will the competitor react at all? What options will the competitor actively consider? Which option will the competitor most likely choose?

Question 31

What are 4 determinations businesses should make when projecting if a competitor will react at all, according to Coyne and Horn?

Answer 31

Will your rival see your actions? Will your rival feel threatened? Will mounting a response be a priority for your rival? Can your rival overcome organizational inertia?

Question 32

According to Kandybin, what is market dislocation?

Answer 32

When new products and services enter your market from other directions, each distinct in how, where, and when it affects your business

Question 33

According to Kandybin, from which directions can a new competitor move into and disrupt a market.

Answer 33

From the top (high end), from the right (improved value at same cost) and from the bottom (low cost).

Question 34

According to Kandybin, what are four ways incumbents can deal with disruption? Under which circumstances is each suitable?

Answer 34

Match the threat (any direction). Absorb the threat (any direction). Leapfrogging (top and right). Ignoring (bottom).