WPC 480 CAPSTONE MIDTERM STUDY GUIDE
strategy - Answers - integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
Strategic Competitiveness - Answers - formulating and implementing programmed
actions to outperform competitors in the LT
competitive advantage - Answers - competitors are unable to recreate value of the firms
product (too hard or too expensive)
-never permanent (everything always changing)
above average returns - Answers - in excess of what an investor expects to earn from
other investments with a similar amount of risk
average returns - Answers - Equal to those an investor expects to earn from other
investments with a similar amount of risk
todays competitive markets - Answers - 1. the global economy
2. globalization
3. rapid technological change
4. increasing importance of knowledge and people
global competitive landscape - Answers - Increasing:
- market volatility and instability due to the rapid pace of change in markets
- blurring of market boundaries
- globalized flow of financial capital
- need for flexibility, speed, innovation, and integration in the use of technology
- strategic and operational complexity of global-scale competition
- rising product quality standards
Decreasing:
- traditional time for adapting to change
- traditional sources of competitive advantage
- traditional managerial mindset
strategic flexibility - Answers - cope with fast moving markets, overcome organizational
inertia
Firm Performance - Answers - Determined primarily by two factors: favorable industry
and specific firm resources
IO Model - Answers - Industrial Organization Model
- industry in which the firm chooses to compete will have a stronger influence on the
firm's performance than the choices made my managers
, - how the firm will reach above-average returns
- environment-centric view of business performance
- nature v. NURTURE
- basis for Porter's Five Forces Model
example of competitive advantage erosion - Answers - priceline- kayak, tripadvisor,
cheap air
IO Model - Answers - 1.) study external environment
2.) locate industry for high potential for above avg returns
3.) identify strategy
4.) develop and acquire skills and assets
5.) user firms strengths
Porter's Five Forces - Answers - threat of entry, threat of substitute, supplier power,
buyer power, and competitive rivalry
Above average returns earned by - Answers - produce same goods at lower costs (cost
leadership)
produce different goods at a premium price (differentiation)
Resource Based Model - Answers - -resource, capability (integrated set of resources) ,
and core competence (source of competitive adv)
Capabilities become core competencies - Answers - costly to imitate, rare, valuable,
non substitutable
Firm Driver - Answers - 1.) identify firms resources/ strengths
2.) determine firms capabilities
3.) determine potential competitive adv
4.) locate attractive industry
5.) select a strategy that works to firms advantage
Vision / mission - Answers - 1.) what the firm is
2.) what it seeks to accomplish
3.) who it serves
Vision - Answers - broad vision of what the firm wants to be and achieve
mission - Answers - specifies the businesses in which the firm intends to compete and
the customers it intends to serve
general environment - Answers - dimensions in the broader society that influence an
industry and the firms within it (firms can't control)
strategy - Answers - integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
Strategic Competitiveness - Answers - formulating and implementing programmed
actions to outperform competitors in the LT
competitive advantage - Answers - competitors are unable to recreate value of the firms
product (too hard or too expensive)
-never permanent (everything always changing)
above average returns - Answers - in excess of what an investor expects to earn from
other investments with a similar amount of risk
average returns - Answers - Equal to those an investor expects to earn from other
investments with a similar amount of risk
todays competitive markets - Answers - 1. the global economy
2. globalization
3. rapid technological change
4. increasing importance of knowledge and people
global competitive landscape - Answers - Increasing:
- market volatility and instability due to the rapid pace of change in markets
- blurring of market boundaries
- globalized flow of financial capital
- need for flexibility, speed, innovation, and integration in the use of technology
- strategic and operational complexity of global-scale competition
- rising product quality standards
Decreasing:
- traditional time for adapting to change
- traditional sources of competitive advantage
- traditional managerial mindset
strategic flexibility - Answers - cope with fast moving markets, overcome organizational
inertia
Firm Performance - Answers - Determined primarily by two factors: favorable industry
and specific firm resources
IO Model - Answers - Industrial Organization Model
- industry in which the firm chooses to compete will have a stronger influence on the
firm's performance than the choices made my managers
, - how the firm will reach above-average returns
- environment-centric view of business performance
- nature v. NURTURE
- basis for Porter's Five Forces Model
example of competitive advantage erosion - Answers - priceline- kayak, tripadvisor,
cheap air
IO Model - Answers - 1.) study external environment
2.) locate industry for high potential for above avg returns
3.) identify strategy
4.) develop and acquire skills and assets
5.) user firms strengths
Porter's Five Forces - Answers - threat of entry, threat of substitute, supplier power,
buyer power, and competitive rivalry
Above average returns earned by - Answers - produce same goods at lower costs (cost
leadership)
produce different goods at a premium price (differentiation)
Resource Based Model - Answers - -resource, capability (integrated set of resources) ,
and core competence (source of competitive adv)
Capabilities become core competencies - Answers - costly to imitate, rare, valuable,
non substitutable
Firm Driver - Answers - 1.) identify firms resources/ strengths
2.) determine firms capabilities
3.) determine potential competitive adv
4.) locate attractive industry
5.) select a strategy that works to firms advantage
Vision / mission - Answers - 1.) what the firm is
2.) what it seeks to accomplish
3.) who it serves
Vision - Answers - broad vision of what the firm wants to be and achieve
mission - Answers - specifies the businesses in which the firm intends to compete and
the customers it intends to serve
general environment - Answers - dimensions in the broader society that influence an
industry and the firms within it (firms can't control)
