MIDTERM

Question 1

Define Strategy:

The set of ____-_________ actions a _____ takes to gain and sustain superior performance relative to its ______________.

Answer 1

The set of GOAL-ORIENTED actions a FIRM takes to gain and sustain superior performance relative to its COMPETITORS.

Question 2

Purpose of Strategic Mgmt:

Enables you to view an ____________ in its ________. It also enables you to think like a ________ ________ to help position your organization for superior performance.

Answer 2

Enables you to view an ORGANIZATION in its ENTIRETY. It also enables you to think like a GENERAL MANAGER to help position your organization for superior performance.

Question 3

3 Levels of Strategy…

Answer 3

AFI -

(Analysis -)
…Vision, Mission, Values
…External Analysis
… Internal Analysis

(Formulation -)
… Corporate Strategy
… Business Strategy
… Function Strategy

(Implementation -)
… Structure, Culture, Control
… Corporate Governance & Business Ethics

Question 4

Define competitive advantage:

_________ performance relative to other competitors in the same ________ or the ________ average.

Answer 4

SUPERIOR performance relative to other competitors in the same INDUSTRY or the INDUSTRY average.

Question 5

Relationship among mission, vision, and strategy:

Building on the _______, organizations establish a _______…

Firms need to back up their _______ and _______ with _______ commitments…

How? =
What? =
Why? =

Answer 5

Vision - What
Mission - Why
Strategy - How

Building on the VISION, organizations establish a MISSION…

Firms need to back up their VISIONS and MISSIONS with STRATEGIC commitments…

Question 6

Value Chain - Primary Activities

Answer 6

1. Inbound logistics
2. Manufacturing
3. Outbound logistics
4. Marketing and Sales
5. Sales Service

Question 7

Value Chain - Support Activities

Answer 7

1. R and D
2. Information Systems
3. HR
4. Accounting and Finance
5. Policies, Processes, and Procedures

Question 8

Strategy Components:

Answer 8

Mission
Vision
Values

Question 9

Macro PEST elements:

Answer 9

P - Political
E - Economical
S - Sociocultural
T - Technological

Question 10

Porter’s Five Forces:

Answer 10

1. Threat of Entry (top)
2. Power of Suppliers (left)
3. Power of Buyers (right)
4. Threat of Substitutes (bottom)
5. Rivalry Among Competitors (center)

Question 11

Life Cycle Stages:

Answer 11

1. Emerging
2. Growing/growth
3. Maturity
4. Decline

Used to identify trends/stage trend is in.

Question 12

Strategic Group Analysis:

Group A - ___ Cost
Group B - _____________

Definition - a framework that explains ____________ in firm performance within the same industry.

X-axis: _______
Y-axis: _____ _________
(Low bottom/left… high top/right)

Answer 12

Group A - LOW Cost
Group B - DIFFERENTIATED

Definition - a framework that explains DIFFERENCES in firm performance within the same industry.

X-axis: ROUTES
Y-axis: COST STRUCTURE
(Low bottom/left… high top/right)

Question 13

3 Standards to Measure:

Answer 13

1. Accounting Profitability
2. Shareholder Value
3. Economic Value

Question 14

What is RBV?

… a model that sees certain types of ___________ as key to superior ____ performance.

Answer 14

Resource-Based View

… a model that sees certain types of RESOURCES as key to superior FIRM performance.

Question 15

What is RBV good for?

Answer 15

Analyzing internal strengths and weaknesses.

Question 16

2 Assumptions for RBV?

Answer 16

1. Resource heterogeneity

2. Resource Immobility

Question 17

VRIO framework… what’s the acronym?

Answer 17

V - Valuable
R - Rare
I - Imitation Costly
O - Organized to Capture Value

Question 18

What is the VRIO decision tree?

Answer 18

A firm must answer yes to all four of the VRIO tree Qs for its resource in question to be a core competency.

Question 19

4 Approaches to better protect your companies competitive advantage:

Answer 19

1. Path dependence 2. Causal ambiguity 3. Intellectual Property (IP) protection 4. Social complexity

Question 20

Total Economic Value:

Value creation because of superior product ______________.

Answer 20

Value creation because of superior product DIFFERENTIATION.

Can charge more

Question 21

Producer’s Surplus:

Another term for ________.

Answer 21

Another term for PROFIT.

Price charged - cost to produce (P-C)

Question 22

Consumer Surplus:

Answer 22

Difference between value a consumer attaches to a good or service and what he or she paid for it (V-P)

Question 23

Triple Bottom Line:

Answer 23

Combination of Economic, Social, and Ecological (profit, people, planet) concerns — that can lead to a sustainable strategy.