Strategy and Organization

Question 1

PESTEL analysis

Answer 1

political, economical, sociocultural, technological, environmental, legal

Question 2

Political factors

Answer 2

important for companies entering a new market, government policies, tax regulations

Question 3

Economic factors

Answer 3

inflation rates, growth of local and national economies, unemployment rates

Question 4

Sociocultural factors

Answer 4

local languages, dominant religions, leisure time, age and lifespan

Question 5

Environmental factors

Answer 5

waste, pollution, which packaging is biodegradable or recyclable

Question 6

Legal factors

Answer 6

laws and regulations

Question 7

globalization

Answer 7

the evolution of distinct geographic product markets into a state of globally interdependent product markets

Question 8

4 categories to determine whether an industry has globalized or is in the process of globalizing

Answer 8

market, cost, government, and competition

Question 9

KSFs

Answer 9

such as the ability to meet competitive pricing, extensive distribution capabilities, marketing skills to raise consumer brand awareness, global presence

Question 10

industry

Answer 10

a firm or group of firms that produce and sell the same or similar products to the same market

Question 11

concentrated

Answer 11

duopoly(dominated by two firms) or oligopoly(a few large firms) the industry is concentrated

Question 12

fragmented

Answer 12

industries in which there is no clear leader is fragmented

Question 13

five-forces model

Answer 13

framework for evaluating industry structure according to the effects of rivalry, the threat of entry, supplier/buyer power, and threat of substitutes

Question 14

rivalry

Answer 14

the intensity of the competition

Question 15

buyer power

Answer 15

the degree to which firms in the buyers’ industry can dictate favorable terms on the purchase agreements that extract some of the profit that would otherwise be available to competitors in the focal industry

Question 16

supplier power

Answer 16

degree to which firms in the supply industry can dictate favorable contract terms and thereby extract some of the profit that would otherwise be available to competitors in the focal industry

Question 17

threat of new entry

Answer 17

degree to which new competitors may enter an industry and make rivalry more intense

Question 18

barriers to entry

Answer 18

conditions that make it difficult to enter an industry

Question 19

exit barriers

Answer 19

barriers that impose a high cost on the abandonment of a market or product(airlines)

Question 20

threat of substitutes

Answer 20

products in other industries which can satisfy the same demand as the products of the focal industry

Question 21

complementors

Answer 21

players who provide complementary rather than competing products and services

Question 22

differentiator

Answer 22

what makes you different than the competition

Question 23

VRINE model

Answer 23

valuable, rare, inimitable, non-substitutable, exploitable

Question 24

resources

Answer 24

the inputs that firms use to create a good or service

Question 25

intangible resources

Answer 25

like knowledge, location, trademarks, and reputation

Question 26

tangible resources

Answer 26

physical resources

Question 27

capabilities

Answer 27

a firm’s skill in using its resources to create goods or services (competencies)

Question 28

value chain

Answer 28

a total of value-adding activities by which a firm produces, distributes and markets a product

Question 29

outsourcing

Answer 29

contracting with external suppliers to perform certain parts of a company’s normal value chain of activities

Question 30

distinctive capabilities

Answer 30

capabilities that set a firm apart from other

Question 31

core capabilities

Answer 31

capabilities that are central to the main business operations of the firm

Question 32

valuable resource

Answer 32

a resource is valuable if it enables a firm to take advantage of opportunities or to fend off threads in the environment

Question 33

rarity

Answer 33

is defined as scarcity relative to demand

Question 34

inimitability and non-substitutability

Answer 34

if competitors cannot acquire the resource quickly or if they face cost disadvantage; if a competitor cannot achieve the same benefit using different combinations of resources and capabilities

Question 35

casual ambiguity

Answer 35

a condition whereby difficulty in identifying or understanding a resource, or capability makes it valuable, rare, and inimitable

Question 36

exploitability

Answer 36

a company’s ability to get value out of any resource or capability that it may generate

Question 37

dynamic capabilities

Answer 37

processes by which a firm integrates, reconfigures, acquires, or divests resources in order to achieve new configurations of resources and capabilities

Question 38

primary activities

Answer 38

inbound logistics, operations, marketing, logistics, sales and service

Question 39

support activities

Answer 39

human resources, accounting, finance operations, technology