MGMT 466 Exam 1 - FLASHCARDS - Chapter 1
What is a strategy?
A strategy is an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage
True or false: when choosing a strategy, firms make choices among competing alternatives as the pathway for deciding how they will pursue strategic competitiveness?
TRUE
True or false: The chosen strategy indicates what the firm will and will not do?
TRUE
What are different forms of strategic positioning?
Walmart and Nordstrom. For example, walmart can get low skilled employees and has everyday low prices. Nordstrom on the other hand has to have superior customer service, in the luxury segment, and has professonal salespeople
What does a compatitive advantage do?
it creates superior value for customers
True or false: no competitive advantage is permenant?
TRUE
What are returns in excess of what an investor expects to earn from other investments with a similar amount of risk?
Above-average returns
What is an investor’s uncertainty about the economic gains or losses that will result from a particular investment?
Risk
What are returns equal to those an investor expects to earn from other investments with a similar amount of risk?
Average returns
What is is the full set of commitments, decisions, and actions firms take to achieve strategic competitiveness and earn above-average returns?
strategic management process
What does starategic management process involve?
Involves analysis, strategy, and performance (the A-S-P model).
What happens in the ASP model?
A firm analyzes the external environment and its internal organization, then formulates and implements strategies to achieve a desired level of performance
Tesla example slide
look at recording
Is the fundamental nature of competition in many of the world’s industries changing?
Yes
Are conventional sources of competitive advantage such as large advertising budgets and economies of scale, as effective as they once were in helping firms earn above-average returns?
No
With the competitive landscape, managers must adopt a new mind-set that values what things?
Flexibility
Speed
Innovation
Integration
The challenges flowing from constantly changing conditions
What is a condition where competitors engage in intense rivalry where markets change quickly and often and entry barriers are low?
Hypercompetition
True or false: hypercompetition makes it difficult for firms to maintain a competitive advantage?
TRUE
What are the two primary drivers of hypercompetition?
The emergence of a global economy
Rapid technological change
What is hypercompetition based on?
Price-quality positioning
Competition to create new know-how and establish first-mover advantage
Competition to protect or invade established product and/or geographic markets
What is an economy in which goods, services, people, skills, and ideas move freely across geographic borders?
Global economy
True or false: The global economy significantly expands and complicates a firm’s competitive environment?
TRUE
True or false: An understanding of the size of the economies in which a firm participates is important when studying the global environment?
TRUE
What is protectionism?
Involves actions taken by a government to protect its economy from adverse influences due to foreign trade
What is the increasing economic interdependence among countries and their organizations as reflected in the flow of products, financial capital, and knowledge across country borders?
Globalization
What is a product of a large number of firms competing against one another in an increasing number of global economies?
Globalization
What is a network of firms that spans multiple countries with the purpose of supplying goods and services?
Global supply chain
Globalization has led to higher performance standards with respect to multiple competitive dimensions, including what?
Quality
Cost
Productivity
Product introduction time
Operational efficiency
Does globalization have challenges?
Yes
What is the additional costs that multinational enterprises face when operating in foreign markets compared to local competitors?
Liability of foreignness
What are challenges of globalization?
The amount of time required to learn to compete in new markets
Entering too many global markets either simultaneously or too quickly
What is a reduction in participation in global supply and value chains?
Deglobalization
How do individuals acquire knowledge?
Individuals acquire knowledge through experience, observation, and inference
True or false: Knowledge is a key intangible asset that, when diffused quickly throughout a firm, contributes to efforts to outperform rivals?
TRUE
What refers to the data retrieved by firms that are increasing in volume, variety, and frequency?
Big data
What is the process of examining huge amounts of data to uncover hidden patterns and other information that can be used to improve decision making?
Big data analytics
True or false: Technology affects all aspects of how companies operate?
TRUE
What is the speed at which new technologies become available to firms and when firms choose to adopt them?
Technology diffusion
What term is used to describe how rapidly and consistently new, information-intensive technologies replace older ones?
Perpetual innovation
What are technologies that destroy the value of an existing technology and create new markets?
Disruptive technologies
What is the basis of technology and its application?
Knowledge
Is knowledge a valuable source of competitive advantage?
Yes
True or false: knowledge is an intangible resource?
TRUE
True or false: knowledge is developed by firms through training programs?
TRUE
True or false: knowledge is acquired by firms by hiring educated and experienced employees?
TRUE
True or false: big data refers to the data retrieved by firms that are increasing in volume, variety, and frequency?
TRUE
True or false: the internet increased low-cost data storage capacity and increased efficient processing technologies have made capturing and processing large volumes of data possible?
TRUE
True or false: “Cloud” technologies that link computer servers through the internet mean that many of these processes can be performed offsite rather than on local computers?
TRUE
What is a set of capabilities firms use to respond to various demands and opportunities existing in today’s dynamic and uncertain competitive environment?
Strategic flexibility
True or false: strategic flexibility involves coping with uncertainty and its accompanying risks?
TRUE
True or false: strategic flexibility requires developing the capacity for continuous learning and adapting to a changing environment?
TRUE
What means that a firm should not deplete or destroy natural elements upon which it depends for survival?
Sustainability
True or false: As a result of increasing interest in the social responsibility of businesses, many firms have emerged to track this sort of information, most often referred to with the title of ESG (environment, society, and governance)?
TRUE
What is performing activities better, faster, or with fewer inputs and defects than rivals?
Operational effectiveness
True or false: Strategic positioning attempts to achieve sustainable competitive advantage?
TRUE
How does strategic positioning attempt to achieve a sustainable competitive advantage?
- Preserving what is distinctive about a company.
- Performing different activities from rivals
- Performing similar activities in different ways
What is an example of serving few needs of many customers?
Jiffy Lube
What is an example of serving broad needs of a few customers?
customized financial service: high net worth customers
What is an example of serving broad needs of many customers in a narrow market?
IKEA
What is the creation of a unique and valuable position, involving a different set of activities?
Strategy
True or false: strategy requires you to make trade-offs in competing—to choose what “Not” to do?
TRUE
True or false: strategy involves creating a “fit” among a company’s activities?
TRUE
What has to do with the way a company’s activities interact and reinforce one another?
Fit
What is the I/O model?
Different industries lend themselves to different forms of profitability
What does the resource-based model of above average returns assume?
The resource-based model of above-average returns assumes that each organization is a collection of unique resources and capabilities. The uniqueness of resources and capabilities is the basis of a firm’s strategy and its ability to earn above-average returns
What are inputs into a firm’s production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers?
Resources
What three categories do firms use to classify their resources?
physical, human, and organizational capital
What are capabilities that serve as a source of competitive advantage for a firm over its rivals?
Core competencies?
True or false: While the I/O model focuses on industry, which is external to the organization, the resource-based model focuses on internal resources and capabilities?
TRUE
Can any competitive advantage be permanent?
No
What are individuals, groups, and organizations that can both influence and are affected by the objectives, actions, and outcomes of a firm?
Stakeholders
True or false: Stakeholders are internal and external constituencies that have a strong interest in the activities and outcomes of an organization and upon whom the organization relies on to achieve its own objectives?
TRUE
What type of stakeholders include all a firm’s employees, including both non-managerial and managerial personnel?
Internal stakeholders
What type of stakeholders are a diverse group and include the major suppliers of a firm’s capital as well as product market stakeholders—the firm’s customers, suppliers, host communities, and any unions representing the workforce?
External stakeholders
What type of stakeholders are directly involved in the value-creating processes of the firm?
Primary stakeholders
What type of stakeholders can both influence and are influenced by what the firm does, but they do not contribute directly to the value the firm creates?
Secondary stakeholders
What do primary stakeholders include?
Suppliers
Employees
Customers
The communities in which the firm operates
Financiers such as the firm’s shareholders and banks
Do all firms that manage for stakeholders have above-average returns?
No
What are arms-length transactions?
a firm doesn’t try to develop close relationships with stakeholders, but simply responds to market forces in buying and selling products and other resources.
Could be more efficient when innovation, loyalty, and higher levels of stakeholder motivation are not as important
What does the the Stakeholder Model of Above-Average Returns suggest?
This model suggests a firm should treat stakeholders better than competing firms but not with overzealousness that could lead to “giving away the store.”
True or falseL one of the keys to managing for stakeholders is determining how much is too much when it comes to allocations to stakeholders?
TRUE
True or false: because firms are not equally dependent on all stakeholders at all times, stakeholders possess different degrees of ability to influence an organization?
TRUE
What does greater dependence give stakeholders?
more potential influence over a firm’s commitments, decisions, and actions
What does a vision or mission statement inform stakeholders of?
What the firm is
What it seeks to accomplish
Who it seeks to serve
The vision and mission provide the foundation the firm needs to choose and implement one or more strategies
What is a picture of what the firm wants to be and, in broad terms, what it wants to achieve?
Vision
What articulates the ideal description of an organization and gives shapes to its intended future? Captures an organization’s aspiration
Vision statement
Does an effective vision stretch and challenge people to think?
Yes
Is a vision statement typically long?
No, it is short and concise
What is the current vision of Mays Business School?
BUILDING A BETTER FUTURE THROUGH BUSINESS
What specifies the businesses in which the firm intends to compete and the customers it intends to serve?
Mission
True or false: a firm’s mission is more concrete than a firm’s vision?
TRUE
Should a mission statement establish a firm’s individuality?
Yes
True or false: a firm’s mission should be inspiring and relevant to all stakeholders?
TRUE
True or false: a firm’s mission deals more directly with product markets and customers?
TRUE
Who should a firm’s mission be developed by?
should be developed by the CEO, top-level managers, and other organizational members
True or false: a firm’s mission has a higher probability of being effective when employees have a strong sense of ethics?
TRUE
What is the mission statement of Mays Business School?
MAYS BUSINESS SCHOOL’S MISSION IS TO DEVELOP LEADERS OF CHARACTER WHO MAKE A POSITIVE DIFFERENCE IN THE COMMUNITIES WHERE THEY LIVE, WORK, AND SERVE
Who are 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, fulfill its mission, and adhere to its values?
Strategic leaders
True or false: strategic leaders’ decisions and actions shape a firm’s culture?
TRUE
