Exam 1

Question 0

Strategy

Answer 0

An organizations overall direction to gain and sustain a competitive advantage to achiever mission and purpose

Question 1

What is the big picture

Answer 1

Why do some organizations succeed and others fail?

Question 2

Strategic leadership

Answer 2

Creating competitive advantage through amazement of an effective strategy making process

Question 3

Strategy formulation

Answer 3

Selecting strategies based on analysis of an organizations external and internal environment

Question 4

Strategic thinking

Answer 4

Plan, pattern, position, perspective, process

Question 5

ROIC

Answer 5

Return on investment capital

Question 6

Strategy is the link between what and what

Answer 6

The firm and it’s environment

Question 7

Components of a mission statement

Answer 7

Mission, vision, values, major goals

Question 8

Vision vs mission

Answer 8

Strategic vision concerns an organizations future, a mission conveys current business of the organization

Question 9

Cognitive bias

Answer 9

Systematic errors in the human decision making process that arise from the way people process information

Question 10

Prior hypothesis bias

Answer 10

Occurs wen decision makers already have a strong beliefs from something that has occurred before

Question 11

Escalating commitment

Answer 11

Cognitive bias that occurs when decision makers commit even more after they hear that a project is failing

Question 12

Reasoning by analogy

Answer 12

Use of simple analogies to make sense out of complex problems

Question 13

Representativeness

Answer 13

Bias rooted in the tendency to generalize from a small sample or even a single vivid anecdote

Question 14

Illusion of control

Answer 14

Cognitive bias rooted in the tendency to overestimate ones ability to control events

Question 15

Availability error

Answer 15

Bias that arises from our predisposition to estimate the probability of an outcome based on how easy the outcome is to imagine

Question 16

Techniques to improve decision making

Answer 16

Decision making, dialect inquiry, and outside view

Question 17

Dialect inquiry

Answer 17

Generalization of a plan and a counter plan that reflect plausible but conflicting courses of action

Question 18

Outside view

Answer 18

Identification of past failed/successful strategic initiatives to determine if they will work for current project

Question 19

Process of identifying opportunities and threats

Answer 19

Scanning, monitoring, forecasting, assessing

Question 20

Economies of scale

Answer 20

Reductions in unit costs attributed to a larger output

Question 21

Absolute cost advantage

Answer 21

Used by leaders of an industry so new entrants cannot expect to match

Question 22

Switching costs

Answer 22

Cost consumers beat to switch from the products offered by established companies to products offered by a new entrant

Question 23

Risk of entry by potential competitors

Answer 23

Economies of scale, absolute cost advantage, brand loyalty, and switching costs

Question 24

Unattractive industry conditions

Answer 24

Low entry barriers, suppliers and buyers have strong positions, strong threats from substitute products, intense rivalry among competitors

Question 25

Mobility barriers

Answer 25

Factors that inhibit movement of a company between strategic groups

Question 26

Building blocks of competitive advantage

Answer 26

Superior: quality, efficiency, innovation, and customer responsiveness

Question 27

Ways to increase ROUC

Answer 27

Increase company’s return on sales, increase sales revenue from invested capital

Question 28

4 types of generic business strategies

Answer 28

Broad low cost, broad differentiation, focused low cost, focused differentiation

Question 29

Broad low cost

Answer 29

Company establishes a cost structure that allows it to provide goods and services at lower unit costs than competitors, does not try to be industry innovator, positions product to appeal to average consumer

Question 30

Broad differentiation

Answer 30

Creates a product that is distinct from competitors in a unique way, concentrates on innovation or quality

Question 31

Focus business level strategy

Answer 31

Strives to serve the need of a target market segment

Question 32

Differentiation

Answer 32

When a company positions itself to have low prices and deliver differentiated products

Question 33

Primary activities

Answer 33

Related to the design, creation, and delivery if the product, it’s marketing and it’s support and after sales service

Question 34

Support activities

Answer 34

Activities of the value chain that provide inputs that allow the primary activities to take place

Question 35

4 functions of support activities

Answer 35

Materials management, human resources, information systems, company infrastructure

Question 36

Competitive advantage building blocks

Answer 36

Efficiency, quality, innovation, customer responsiveness