Hoofdstuk 1

Question 1

Strategy

Answer 1

Theory about how to gain competitive advantages

Question 2

Assumptions and hypotheses

Answer 2

How competition in the industry evolves for a competitive advantage

Question 3

Strategic management process

Answer 3

Sequential set of analyses and choices to increase the change of a good strategy and competitive advantages

Question 4

Framework order

Answer 4

Mission –> Objectives –> External and Internal analysis –> Strategic Choice –> Strategy Implementation –> Competitive advantage

Question 5

Mission

Answer 5

Long-term purpose (not too broad or inwardly focused)

Question 6

Objectives

Answer 6

Specific measurable targets to measure mission

Question 7

External analysis

Answer 7

Critical threats and opportunities in its competitive environment

Question 8

Internal analysis

Answer 8

Organizational strengths and weaknesses

Question 9

Strategic choice

Answer 9

Theory of how to gain competitive advantage
Business-level strategy: single market or industry
Corporate-level strategy: multiple markets or industries simultaneously
Support the firm’s mission, be consistent with objectives, exploit opportunities in a firm’s environment with a firm’s strengths, and neutralize threats in a firm’s environment while avoiding a firm’s weaknesses

Question 10

Strategy implementation

Answer 10

A firm adopts organizational policies and practices (organizational structure, management control system and compensation policies) that are consistent with its strategy

Question 11

Competitive advantage

Answer 11

Create more economic value than rival firms

Question 12

Economic value

Answer 12

The difference between the perceived benefits gained by a customer that purchases a firm’s products or services and the full economic cost of these products or services

Question 13

Measuring competitive advantage

Answer 13

Accounting measures: using information from a firm’s published P&L and balance sheet. Compare to average of other firms in the same industry. Profitability, liquidity, leverage and activity ratios
Economic measures: compare a firm’s level of return to its cost of capital (pay suppliers of capital). WACC: debt x cost of debt + equity x cost of equity

Question 14

Types of strategies

Answer 14

Intended: a strategy a firm through it was going to pursue
Deliberate: An intended strategy a firm actually implements
Realized strategy: the strategy a firm is actually pursuing
Unrealized strategy: an intended strategy that is not implemented
Emergent strategy: A strategy that emerges over time or that has been radically reshaped once implemented