MSM 6650 FINAL EXAM QUESTIONS
AND ANSWERS
What are the 3 most salient value drivers? - Answer- Product features
Customer Service
Complements
What is often needed to create superior product features? - Answer- R&D
What are the most important cost drivers? - Answer- Cost of input factors
Economies of scale
Learning curve effects
Experience Curve effects
Cube-Square Rule - Answer- the volume of a body such as a pipe or a tank increases
disproportionately more than its surface
Minimum Efficient Scale - Answer- Output range needed to bring down the cost per unit
as much as possible, allowing a firm to stake out the lowest-cost position that is
achievable through economies of scale
The steeper the learning curve, the ______ - Answer- the more learning has occurred
The difference between two points on a learning curve is what? - Answer- The
cumulative output
Strategic Management - Answer- an integrative management field that combines
analysis, formulation, and implementation in the quest for competitive advantage
Strategy defined - Answer- the set of goal-directed actions a firm takes to achieve a
competitive advantage
To achieve superior performance, companies compete for what? - Answer- Resources
A good strategy is based on what 3 elements? - Answer- Competitive advantage
Guiding policy
Coherent actions
,Competitive advantage is always ________, not absolute. - Answer- Relative
To assess competitive advantage we compare a firm's performance to what? - Answer-
A benchmark - performance of other firms or the industry average
sustainable competitive advantage - Answer- outperforming competitors or the industry
average over a prolonged period of time
Apple iPhones are an example of what? - Answer- Sustainable competitive advantage
Competitive Disadvantage - Answer- underperformance relative to other competitors in
the same industry or the industry average
Competitive Parity - Answer- performance of two or more firms at the same level
What are the rewards of superior value creation? - Answer- Market share and
profitability
Strategic positioning - Answer- Obtaining a unique position within an industry while
providing value to customers and controlling costs
The greater the difference between value creation and cost, then the greater the
___________ - Answer- Economic contribution
Strategic positioning requires what? - Answer- Trade offs
A well devised strategy is based on what two things? - Answer- What to do
What not to do
Internal stakeholders - Answer- employees, stockholders, board members
External Stakeholders - Answer- customers, suppliers, alliance partners, creditors,
unions, communities, governments, media
Stakeholder Strategy - Answer- an integrative approach to managing a diverse set of
stakeholders effectively in order to gain and sustain competitive advantage
A firm that successfully executes a strategy benefits society how? - Answer-
Reinvesting profits and increasing employment
Creating value
Stakeholder strategy argues that focusing only on the needs of ______ places the firm
at risk of failure. - Answer- Shareholders
Effective stakeholder management helps a firm do what? - Answer- Build a strong
public reputation
, Stakeholder Impact Analysis - Answer- A decision tool with which managers can
recognize, prioritize, and address the needs of different stakeholders, enabling the firm
to achieve competitive advantage while acting as a good corporate citizen
Stakeholder impact analysis focuses on what 3 stakeholder attributes? - Answer- Power
Legitimacy
Urgency
When does a stakeholder have power over a company? - Answer- When it can get the
company to do something that it would not otherwise do
When does a stakeholder have a legitimate claim? - Answer- when it is perceived to be
legally valid or otherwise appropriate
When does a stakeholder have an urgent claim? - Answer- when it requires a
company's immediate attention and response
5 steps of stakeholder impact analysis - Answer- Identify stakeholders
Identify stakeholder's interests
Identify opportunities and threats
Identify social responsibilities
Address stakeholder concerns
When identifying stakeholders, a firm should focus on those stakeholders that
_________. - Answer- currently have, or could potentially have, a material effect on the
firm
Which of the four corporate social responsibilities is considered first and foremost for
business enterprises - Answer- Economic
Corporate Citizenship - Answer- The idea that firms should voluntarily give back to
society when they are able to do so
Global Strategy Formulation - Answer- managers examine where and how the firm
should compete around the world
Society expects ________ and _______ responisbilty - Answer- Ethical and
philanthropical
Society requires ________ and _________ responsibility - Answer- Economic and legal
In a nutshell, strategy is the art and science of _________ - Answer- Success and
failure
AND ANSWERS
What are the 3 most salient value drivers? - Answer- Product features
Customer Service
Complements
What is often needed to create superior product features? - Answer- R&D
What are the most important cost drivers? - Answer- Cost of input factors
Economies of scale
Learning curve effects
Experience Curve effects
Cube-Square Rule - Answer- the volume of a body such as a pipe or a tank increases
disproportionately more than its surface
Minimum Efficient Scale - Answer- Output range needed to bring down the cost per unit
as much as possible, allowing a firm to stake out the lowest-cost position that is
achievable through economies of scale
The steeper the learning curve, the ______ - Answer- the more learning has occurred
The difference between two points on a learning curve is what? - Answer- The
cumulative output
Strategic Management - Answer- an integrative management field that combines
analysis, formulation, and implementation in the quest for competitive advantage
Strategy defined - Answer- the set of goal-directed actions a firm takes to achieve a
competitive advantage
To achieve superior performance, companies compete for what? - Answer- Resources
A good strategy is based on what 3 elements? - Answer- Competitive advantage
Guiding policy
Coherent actions
,Competitive advantage is always ________, not absolute. - Answer- Relative
To assess competitive advantage we compare a firm's performance to what? - Answer-
A benchmark - performance of other firms or the industry average
sustainable competitive advantage - Answer- outperforming competitors or the industry
average over a prolonged period of time
Apple iPhones are an example of what? - Answer- Sustainable competitive advantage
Competitive Disadvantage - Answer- underperformance relative to other competitors in
the same industry or the industry average
Competitive Parity - Answer- performance of two or more firms at the same level
What are the rewards of superior value creation? - Answer- Market share and
profitability
Strategic positioning - Answer- Obtaining a unique position within an industry while
providing value to customers and controlling costs
The greater the difference between value creation and cost, then the greater the
___________ - Answer- Economic contribution
Strategic positioning requires what? - Answer- Trade offs
A well devised strategy is based on what two things? - Answer- What to do
What not to do
Internal stakeholders - Answer- employees, stockholders, board members
External Stakeholders - Answer- customers, suppliers, alliance partners, creditors,
unions, communities, governments, media
Stakeholder Strategy - Answer- an integrative approach to managing a diverse set of
stakeholders effectively in order to gain and sustain competitive advantage
A firm that successfully executes a strategy benefits society how? - Answer-
Reinvesting profits and increasing employment
Creating value
Stakeholder strategy argues that focusing only on the needs of ______ places the firm
at risk of failure. - Answer- Shareholders
Effective stakeholder management helps a firm do what? - Answer- Build a strong
public reputation
, Stakeholder Impact Analysis - Answer- A decision tool with which managers can
recognize, prioritize, and address the needs of different stakeholders, enabling the firm
to achieve competitive advantage while acting as a good corporate citizen
Stakeholder impact analysis focuses on what 3 stakeholder attributes? - Answer- Power
Legitimacy
Urgency
When does a stakeholder have power over a company? - Answer- When it can get the
company to do something that it would not otherwise do
When does a stakeholder have a legitimate claim? - Answer- when it is perceived to be
legally valid or otherwise appropriate
When does a stakeholder have an urgent claim? - Answer- when it requires a
company's immediate attention and response
5 steps of stakeholder impact analysis - Answer- Identify stakeholders
Identify stakeholder's interests
Identify opportunities and threats
Identify social responsibilities
Address stakeholder concerns
When identifying stakeholders, a firm should focus on those stakeholders that
_________. - Answer- currently have, or could potentially have, a material effect on the
firm
Which of the four corporate social responsibilities is considered first and foremost for
business enterprises - Answer- Economic
Corporate Citizenship - Answer- The idea that firms should voluntarily give back to
society when they are able to do so
Global Strategy Formulation - Answer- managers examine where and how the firm
should compete around the world
Society expects ________ and _______ responisbilty - Answer- Ethical and
philanthropical
Society requires ________ and _________ responsibility - Answer- Economic and legal
In a nutshell, strategy is the art and science of _________ - Answer- Success and
failure
