MGMT 466 Exam 1 - FLASHCARDS - Chapter 1 Flashcards by Stu Diaz

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

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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

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True or false: The chosen strategy indicates what the firm will and will not do?

TRUE

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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

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What does a compatitive advantage do?

it creates superior value for customers

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True or false: no competitive advantage is permenant?

TRUE

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What are returns in excess of what an investor expects to earn from other investments with a similar amount of risk?

Above-average returns

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What is an investor’s uncertainty about the economic gains or losses that will result from a particular investment?

Risk

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What are returns equal to those an investor expects to earn from other investments with a similar amount of risk?

Average returns

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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

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What does starategic management process involve?

Involves analysis, strategy, and performance (the A-S-P model).

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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

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Tesla example slide

look at recording

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Is the fundamental nature of competition in many of the world’s industries changing?

Yes

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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?

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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

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What is a condition where competitors engage in intense rivalry where markets change quickly and often and entry barriers are low?

Hypercompetition

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True or false: hypercompetition makes it difficult for firms to maintain a competitive advantage?

TRUE

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What are the two primary drivers of hypercompetition?

The emergence of a global economy
Rapid technological change

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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

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What is an economy in which goods, services, people, skills, and ideas move freely across geographic borders?

Global economy

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True or false: The global economy significantly expands and complicates a firm’s competitive environment?

TRUE

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True or false: An understanding of the size of the economies in which a firm participates is important when studying the global environment?

TRUE

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What is protectionism?

Involves actions taken by a government to protect its economy from adverse influences due to foreign trade

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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?

1. Preserving what is distinctive about a company. 2. Performing different activities from rivals 3. 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?

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?

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