Test 1

Question 1

Strategic Management

Answer 1

Study of why certain firms outperform their competitors

Question 2

what are the 2 fundamental questions when it comes to strategic decisions

Answer 2

• how can firm outperform competitors

- how to sustain competitive advantages

Question 3

4 attributes of strategic management

Answer 3

• directed towards overall company goals
• involves multiple stakeholders
• requires coordinating long and short term goals
• recognizes trade-offs between effectiveness and efficiency

Question 4

Corporate Governance

Answer 4

relationship among various participants in determining the direction and performance of a company

Question 5

Two views of the purpose of a company

Answer 5

maximize long-term return for shareholders vs considering all stakeholders

Question 6

2 kinds of strategies?

Answer 6

Deliberate (initial) and emergent (resulting)

Question 7

Hierarchy of goals

Answer 7

• company vision: overall goal
• Mission Statement: purpose and focus on means to compete
• Strategic Objectives: measurable and specific

Question 8

Perceptual Acuity

Answer 8

ability to sense what is coming from the external environment

Question 9

Tools to improve forecasting ability

Answer 9

• Environmental scanning: surveying environment to detect changes
• Environmental monitoring: track evolution of environmental trends
• Competitive intelligence: understand the industry and identify rival’s strengths and weaknesses

Question 10

Different types of environment

Answer 10

• general: composed of factors that effect a firm’s strategy
• Demographic: age, ethnicity, geographic, income levels
• Sociocultural: more women, more health conscious, more environmentally conscious
• Political: increase in minimum wage, taxation, affordable care act
• Technological: 3D printing, AI, nanotechnology, virtual tools
• Economic: interest rates, unemployment, CPI, stock market
• Global: global trade, emerging economies, trade agreements, terrorism

Question 11

What are porters 5 forces?

Answer 11

• Threat of new entrants: Profits eroded by competitors
• Bargaining power of buyers: Force down prices, bargain for higher quality or more services
• Bargaining Power of suppliers: can threaten to raise prices or reduce quality of goods
• Threat of substitute products/service: puts a ceiling on prices (price/performance ratio)
• rivalry among competitors in industry: price competition, advertising battles, increased customer service

Question 12

Value Chain analysis

Answer 12

sequential process of value creating activities

Question 13

Value Chain primary activities

Answer 13

• inbound logistics
• operations
• outbound logistics
• marketing and sales
• service

Question 14

Value Chain support activities

Answer 14

• general admin
• human resources
• technology development
• procurement

Question 15

Resource based view

Answer 15

• internal analysis within a company

- external analysis of industry and its competitive environment

Question 16

3 resources in resource based view

Answer 16

• tangible: physical and financial assets
• intangible: hard to imitate and account for (skills, procedures, experience)
• organizational capabilities: Competencies or skills firm uses to transform inputs to outputs

Question 17

Resource based analysis

Answer 17

is the resource: 
-valuable
-rare
-difficult to imitate
-difficult to substitute
(competitive disadvantage, competitive parity, temporary competitive advantage, sustainable competitive advantage)

Question 18

Swot analysis

Answer 18

Strengths, weaknesses, opportunities, threats

Question 19

Types of Competitive advantage and sustainability

Answer 19

• differentiation strategy: creating unique products/services
• Overall cost leadership: low cost relative to other firms
• Focus Strategy: focuses on narrow product lines or buyer segments (niche)

Question 20

Life Cycle of an industry

Answer 20

• introduction: develop product and generate exposure
• Growth: brand recognition, differentiation, financial resources to support value chain activities
• Maturity: efficient manufacturing and processes, low costs
• Decline: Harvesting, consolidating, maintaining, exiting the market

Question 21

Financial Ratio Analysis

Answer 21

• current ratio = current assets/current liabilities
• total debt ratio = (assets - equity)/assets)
• inventory turnover = COGS/inventory
• profit margin = net income/sales
• market to book ratio = market value per share/book value per share

Question 22

Balanced Scorecard

Answer 22

integrating financial analysis with stakeholder perspective