Strategic Management Midterm

Question 1

Define being strategic, strategy and strategic management.

Answer 1

Being strategic: Understanding, responding, and shaping the external and internal forces that affect the focal entity

Strategy: Decisions, plans, etc. that we make to understand, respond, and shape the external and internal forces that affect the focal entity

Strategic Management: A system or process through which a firm develops strategies, to understand, respond and shape the external and internal forces that affect the focal entity, with the objective of achieving firm-level competitiveness

Question 2

What are some of the most important concepts of business level strategy?

Answer 2

Creating value through serving customers.

Cost leadership, differentiation, focused strategies.

Porter’s Five Forces: Threat of Entrants, Bargaining Power of Suppliers/Buyers, Threat of Substitution, Industry Competitors.

SWOT Analysis: SO, WO, ST, WT (opportunities and threats)

Business level-strategy: An integrated and coordinated set of commitments and actions the firm uses to
gain a competitive advantage by exploiting core competencies in specific product markets.

Focused on a single business unit that serves specific product market.

Question 3

What are some of the most important concepts of corporate level strategy?

Answer 3

Creating value through enabling and enhancing business-level strategies

Specifies actions taken by the firm to gain a competitive advantage by selecting and managing a group of different businesses competing in different product markets

VRIN - Valuable, Rare, Inimitable, Non-substitutable

Question 4

What are the components of an internal analysis?

Answer 4

• Resources
• Capabilities
• Core Competencies
• VRIN
• Value Chain analysis
• Competitive Advantage
• Strategic Competitiveness