MGCR 423 - STRATEGIC MANAGEMENT STUDY
GUIDE
Strategy - Answers - an integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
Core Competencies - Answers - unique capabilities of a firm that service as a source of
competitive advantage for a firm over its rivals.
Strategic competitiveness - Answers - achieved when a firm successfully formulates
and implements a value-creating strategy
Competitive advantage - Answers - achieved when a firm's current and potential
competitors either are not able to simultaneously formulate and implement its value-
creating strategy, are unable to duplicate the benefits of the strategy, or find the strategy
too costly to imitate.
Above-average returns - Answers - returns that are in excess of what an investor
expects to earn from other investments with a similar level or amount of risk.
Risk - Answers - investors uncertainty about the economic gain that will result from an
investment
Strategic Management Process (definition) - Answers - the full set of commitments,
decisions and activities required for a firm to achieve strategic competitiveness and earn
above-average returns
Strategic Management Process (Steps) - Answers - STEP 1: Analyze external and
internal environment to determine resources, capabilities and core competencies.
Based on First Step (Analyze), firm develops mission and vision statement to come up
with which strategy to use.
STEP 2: Strategy Formulation and Implementation
STEP 3: Performance Outcome of Strategic Competitiveness and Above-Average
Returns
Hypercompetition - Answers - Characterized by inherent instability and change and
therefore market stability does not exist.
Condition of rapidly increasing competition based on multiple dimensions:
1) price-quality positioning
2)new knowledge
,3) first mover advantage
4) protect/invade new geographic/market territories
Drivers of Hypercompetition - Answers - 1) global economy
2) rapid technological change
Global Economy Characteristics - Answers - - goods, services people and skills move
freely between geographic boarders
- lack of tariffs
- higher performance standards
- partnerships of companies across boarders
Technology Changes - Trends - Answers - 1) Technology Diffusion & disruptive
technology
2) Information Age
3) Increasing Knowledge Intensity
Technology Diffusion - Answers - rate/ speeds at which new technologies become
available and used
Disruptive Technology - Answers - technology that destroys the value of an existing
technology and creates a new market
Perceptual Innovation - Answers - how rapidly and consistently new information
intensive technology is replaced
Information Age - Answers - ability to effectively access and use information have
become an important competitive advantage in this period
Increasing Knowledge Intensity - Answers - the ability to capture intelligence and
transform it into useable knowledge and difuse it rapidly
Knowledge Spillover - Answers - acquiring competitor information via hiring employees
from other companies
Strategic Flexibility - Answers - a set of capabilities used to respond to various demands
and opportunities existing in a dynamic and uncertain competitive environment
Vision - Answers - what the firm ultimately wants to achieve
Mission - Answers - specifies the business in which the firm competes and the
customers it intends to serve
Stakeholders - Answers - - individuals, groups and organization that an affect a firms
vision and mission
, - Are affected by the strategic outcomes achieved by the firm
- Can have enforceable claims
on the firm's performance
-Are influential when in control
of critical or valued resources
Types of Stakeholders - Answers - 1. Capital Market Stakeholders
2. Product Market Stakeholders
3. Organizational Stakeholders
Capital Market Stakeholders - Answers - shareholders, major suppliers of capital
Product Market Stakeholders - Answers - primary customers, suppliers, host
communities, unions
Organizational Stakeholders - Answers - employees, managers, non-managers
Strategic Leaders - Answers - people located in different areas and levels of the firm
using the strategic management process to select strategic actions that help the firm
achieve its vision and fulfil its mission
Characteristics of Strategic Leaders - Answers - - have a strong strategic orientation
that relies on thorough analysis when taking action.
- want the firm and its people to accomplish more
- innovative thinkers
- leverage relationships with external parties while simultaneously promoting exploratory
learning
- global mindset approach to management
Profit Pools - Answers - total profits earned in an industry at all points along the value
chain
4 Steps in Identifying Profit Pools - Answers - 1. Define Pool's boundary
2. Estimate the pools overall size
3. Estimate size of the value chain activity in the pool
4. reconcile calculations
I/O Model Assumptions - Answers - 1. The external environment (general, industry, and
competitor) imposes pressures and constraints that determine strategic choices.
2. Similarity in strategically relevant resources causes competitors to pursue similar
strategies.
GUIDE
Strategy - Answers - an integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
Core Competencies - Answers - unique capabilities of a firm that service as a source of
competitive advantage for a firm over its rivals.
Strategic competitiveness - Answers - achieved when a firm successfully formulates
and implements a value-creating strategy
Competitive advantage - Answers - achieved when a firm's current and potential
competitors either are not able to simultaneously formulate and implement its value-
creating strategy, are unable to duplicate the benefits of the strategy, or find the strategy
too costly to imitate.
Above-average returns - Answers - returns that are in excess of what an investor
expects to earn from other investments with a similar level or amount of risk.
Risk - Answers - investors uncertainty about the economic gain that will result from an
investment
Strategic Management Process (definition) - Answers - the full set of commitments,
decisions and activities required for a firm to achieve strategic competitiveness and earn
above-average returns
Strategic Management Process (Steps) - Answers - STEP 1: Analyze external and
internal environment to determine resources, capabilities and core competencies.
Based on First Step (Analyze), firm develops mission and vision statement to come up
with which strategy to use.
STEP 2: Strategy Formulation and Implementation
STEP 3: Performance Outcome of Strategic Competitiveness and Above-Average
Returns
Hypercompetition - Answers - Characterized by inherent instability and change and
therefore market stability does not exist.
Condition of rapidly increasing competition based on multiple dimensions:
1) price-quality positioning
2)new knowledge
,3) first mover advantage
4) protect/invade new geographic/market territories
Drivers of Hypercompetition - Answers - 1) global economy
2) rapid technological change
Global Economy Characteristics - Answers - - goods, services people and skills move
freely between geographic boarders
- lack of tariffs
- higher performance standards
- partnerships of companies across boarders
Technology Changes - Trends - Answers - 1) Technology Diffusion & disruptive
technology
2) Information Age
3) Increasing Knowledge Intensity
Technology Diffusion - Answers - rate/ speeds at which new technologies become
available and used
Disruptive Technology - Answers - technology that destroys the value of an existing
technology and creates a new market
Perceptual Innovation - Answers - how rapidly and consistently new information
intensive technology is replaced
Information Age - Answers - ability to effectively access and use information have
become an important competitive advantage in this period
Increasing Knowledge Intensity - Answers - the ability to capture intelligence and
transform it into useable knowledge and difuse it rapidly
Knowledge Spillover - Answers - acquiring competitor information via hiring employees
from other companies
Strategic Flexibility - Answers - a set of capabilities used to respond to various demands
and opportunities existing in a dynamic and uncertain competitive environment
Vision - Answers - what the firm ultimately wants to achieve
Mission - Answers - specifies the business in which the firm competes and the
customers it intends to serve
Stakeholders - Answers - - individuals, groups and organization that an affect a firms
vision and mission
, - Are affected by the strategic outcomes achieved by the firm
- Can have enforceable claims
on the firm's performance
-Are influential when in control
of critical or valued resources
Types of Stakeholders - Answers - 1. Capital Market Stakeholders
2. Product Market Stakeholders
3. Organizational Stakeholders
Capital Market Stakeholders - Answers - shareholders, major suppliers of capital
Product Market Stakeholders - Answers - primary customers, suppliers, host
communities, unions
Organizational Stakeholders - Answers - employees, managers, non-managers
Strategic Leaders - Answers - people located in different areas and levels of the firm
using the strategic management process to select strategic actions that help the firm
achieve its vision and fulfil its mission
Characteristics of Strategic Leaders - Answers - - have a strong strategic orientation
that relies on thorough analysis when taking action.
- want the firm and its people to accomplish more
- innovative thinkers
- leverage relationships with external parties while simultaneously promoting exploratory
learning
- global mindset approach to management
Profit Pools - Answers - total profits earned in an industry at all points along the value
chain
4 Steps in Identifying Profit Pools - Answers - 1. Define Pool's boundary
2. Estimate the pools overall size
3. Estimate size of the value chain activity in the pool
4. reconcile calculations
I/O Model Assumptions - Answers - 1. The external environment (general, industry, and
competitor) imposes pressures and constraints that determine strategic choices.
2. Similarity in strategically relevant resources causes competitors to pursue similar
strategies.
