Strategic Management CHPT 3

Question 0

E

Answer 0

W

Question 0

Value-chain analysis

Answer 0

a strategic analysis of an organization that uses value creating activities.
Value is the amount that buyers are willing to pay for what a firm provides them and is measured by total revenue

Question 1

The Limitations of SWOT Analysis

Answer 1

Strengths may not lead to an advantage
SWOT’s focus on the external environment is too narrow
SWOT gives a one-shot view of a moving target
SWOT overemphasizes a single dimension of strategy

Question 2

Primary activities

Answer 2

contribute to the physical creation of the product or service, its sale and transfer to the buyer, and its service after the sale.
inbound logistics, operations, outbound logistics, marketing and sales, and service

Question 3

Support activities

Answer 3

activities of the value chain that either add value by themselves or add value through important relationships with both primary activities and other support activities
procurement, technology development, human resource management, and general administration

Question 4

Inbound Logistics

Answer 4

Associated with receiving, storing and distributing inputs to the product
Location of distribution facilities
Warehouse layout and designs

Question 5

Operations

Answer 5

Associated with transforming inputs into the final product form
Efficient plant operations
Incorporation of appropriate process technology
Efficient plant layout and workflow design

Question 6

Outbound Logistics

Answer 6

Associated with collecting, storing, and distributing the product or service to buyers
Effective shipping processes to provide quick delivery and minimize damages
Shipping of goods in large lot sizes to minimize transportation costs.

Question 7

Marketing and Sales

Answer 7

Associated with purchases of products and services by end users and the inducements used to get them to make purchases
Innovative approaches to promotion and advertising
Proper identification of customer segments and needs

Question 8

Service

Answer 8

Associated with providing service to enhance or maintain the value of the product
Quick response to customer needs and emergencies
Quality of service personnel and ongoing training

Question 9

Procurement

Answer 9

Function of purchasing inputs used in the firm’s value chain
Procurement of raw material inputs
Development of collaborative “win-win” relationships with suppliers
Analysis and selection of alternate sources of inputs to minimize dependence on one supplier

Question 10

Human Resource Management

Answer 10

Activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel
Effective recruiting, development, and retention mechanisms for employees
Quality relations with trade unions
Reward and incentive programs to motivate all employees

Question 11

Technology Development

Answer 11

Related to a wide range of activities and those embodied in processes and equipment and the product itself
Effective R&D activities for process and product initiatives
Positive collaborative relationships between R&D and other departments
Excellent professional qualifications of personnel

Question 12

General Administration

Answer 12

Typically supports the entire value chain and not individual activities
Effective planning systems
Excellent relationships with diverse stakeholder groups
Effective information technology to integrate value-creating activities

Question 13

Interrelationships among Value-Chain Activities within and across Organizations

Answer 13

Two levels

1. Interrelationships among activities within the firm
2. Relationships among activities within the firm and with other organization (e.g., customers and suppliers)

Question 14

Resource-based view of the firm

Answer 14

perspective that firms’ competitive advantages are due to their endowment of strategic resources that are valuable, rare, costly to imitate, and costly to substitute.

Question 15

Resource-based view of the firm

Two perspectives

Answer 15

The internal analysis of phenomena within a company

An external analysis of the industry and its competitive environment

Question 16

Tangible resources

.

Answer 16

organizational assets that are relatively easy to identify, including physical assets, financial resources, organizational resources, and technological resources

Question 17

Intangible resources organizational

Answer 17

assets that are difficult to identify and account for and are typically embedded in unique routines and practices, including human resources, innovation resources, and repu

Question 18

Organizational capabilities

Answer 18

The competencies and skills that a firm employs to transform inputs into outputs.

Question 19

Firm Resources and Sustainable Competitive Advantages

Answer 19

First, the resource must be valuable in the sense that it exploits opportunities and/or neutralizes threats in the firm’s environment.
Second, it must be rare among the firm’s current and potential competitors.
Third, the resource must be difficult for competitors to imitate.
Fourth, the resource must have no strategically equivalent substitutes.

Question 20

Sources of Inimitability

Answer 20

Physical uniqueness
Path dependency
Causal ambiguity
Social complexity

Question 21

The Generation and Distribution of a Firm’s Profits

Answer 21

Four factors help explain the extent to which employees and managers will be able to obtain a proportionately high level of the profits that they generate

1. Employee bargaining power
2. Employee replacement cost
3. Employee exit costs
4. Manager bargaining power

Question 22

Evaluating Firm Performance: Financial ratio analysis

Answer 22

Balance sheet
Income statement
Historical comparison
Comparison with industry norms
Comparison with key competitors

Question 23

Evaluating Firm Performance: Stakeholder

Answer 23

perspective
Employees
Customers
Owners

Question 24

Five types of financial ratios

Answer 24

Short-term solvency or liquidity
Long-term solvency measures
Asset management (or turnover)
Profitability
Market value

Question 25

Financial Ratio Analysis

Answer 25

Historical comparisons
Comparison with industry norms
Comparison with key competitors

Question 26

The Balance Scorecard

Answer 26

Provides a meaningful integration of many issues that come into evaluating a firm’s performance

Question 27

The Balance Scorecard

Four key perspectives

Answer 27

How do customers see us?
What must we excel at?
Can we continue to improve and create value?
How do we look to shareholders?

Question 28

Customer Perspective

Answer 28

Time
Quality
Performance and service
Cost

Question 29

Internal Business Perspective

Answer 29

Processes
Decisions
Actions
Coordination
Resources and capabilities

Question 30

Innovation and Learning Perspective

Answer 30

Introduction of new products and services
Greater value for customers
Increased operating efficiencies

Question 31

Financial Perspective

Answer 31

Profitability
Growth
Shareholder value
Increased market share
Reduced operating expenses
Higher asset turnover

Question 32

Potential Limitations of the Balanced Scorecard

Answer 32

Lack of a clear strategy
Limited or ineffective executive sponsorship
Too much emphasis on financial measures rather than non-financial measures
Poor data on actual performance
Inappropriate links to scorecard measures to compensation
Inconsistent or inappropriate terminology