OIM 210, EXAM 1 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. Sustainable competitive advantage
Answer:
financial performance that consistently outperforms industry peers.
Question:
2. Basics of strategy & competitive advantage
Answer:
Operational Effectiveness Strategic Positioning Characteristics of assets that may yield competitive
advantage (above industry profits for a long period of time)
Question:
3. Operational Effectiveness
Answer:
performing the same tasks better than your rivals. (think UPS and the left turns and FedEx)
Question:
4. Strategic Positioning
Answer:
attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
(think Zara and fresh direct)
Question:
5. Lower prices from suppliers without scale?
Answer:
Buy Direct Save by eliminating middleman Give suppliers what they want Unlimited "shelf space" Pay
'em faster Co Branding Share the data!
Question:
6. Inventory Turns
Answer:
the # of times inventory is sold or used during a given period (such as a year or a quarter). Higher -> +
profit -> paying suppliers faster
Question:
7. Fresh direct:
, Answer:
Cheaper Real Estate 1 facility, 5 football fields, servicing equiv. of entire city of Boston. Labor Costs -
60% lower Lower Energy 12 separate climate controlled rooms set for food, not people (bonus: fresher
food) Less Waste - saves at least 5% total revenue Typical grocers: 1 in 7 truckloads wasted (~14%) v.
~1% at FreshDirect Buy from suppliers or prepare based on orders, not walk-in-traffic speculation AI
systems & 7 miles of fiber optics monitor & guide Inventory turns / yr. 197 vs. 40 (less spoilage + fresher
food) Inv. T -> every 2 days Seafood: 1 day vs. 7-9 days Unmatched freshness & food safety
Question:
8. How Do We Know if Assets Yield Sustainable Advantage?
Answer:
Rareness Value Imperfectly imitable Non-Substitutable
Question:
9. Key Resources for Competitive Advantage
Answer:
Imitation-resistant Value Chain Organization Brand Scale Data - Differentiation & Switching Costs
Network Effects Distribution Channels Alliances (with complementary firms & competitors) Patents?
Question:
10. Straddling:
Answer:
When a firm adopts more than one method of doing business (occupies more than one position) yet fails to
gain the full advantages of any of these efforts.
Question:
11. Value Chain
Answer:
The value chain is the set of activities that bring a something to the market Inbound logistics Operations
Outbound logistics Marketing and sales Service Really not a thing to restart a value chain
Question:
12. Brand
Answer:
Brand is given in customer experience in the idea that your customers are not ready to leave you. The
symbolic embodiment of all the information connected with a product or service.
Question:
13. Viral Market
Answer:
Leveraging consumers to promote a product or service.
Question:
14. Scale Advantages
Answer:
advantages related to size
CORRECT ANSWERS
Question:
1. Sustainable competitive advantage
Answer:
financial performance that consistently outperforms industry peers.
Question:
2. Basics of strategy & competitive advantage
Answer:
Operational Effectiveness Strategic Positioning Characteristics of assets that may yield competitive
advantage (above industry profits for a long period of time)
Question:
3. Operational Effectiveness
Answer:
performing the same tasks better than your rivals. (think UPS and the left turns and FedEx)
Question:
4. Strategic Positioning
Answer:
attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company
(think Zara and fresh direct)
Question:
5. Lower prices from suppliers without scale?
Answer:
Buy Direct Save by eliminating middleman Give suppliers what they want Unlimited "shelf space" Pay
'em faster Co Branding Share the data!
Question:
6. Inventory Turns
Answer:
the # of times inventory is sold or used during a given period (such as a year or a quarter). Higher -> +
profit -> paying suppliers faster
Question:
7. Fresh direct:
, Answer:
Cheaper Real Estate 1 facility, 5 football fields, servicing equiv. of entire city of Boston. Labor Costs -
60% lower Lower Energy 12 separate climate controlled rooms set for food, not people (bonus: fresher
food) Less Waste - saves at least 5% total revenue Typical grocers: 1 in 7 truckloads wasted (~14%) v.
~1% at FreshDirect Buy from suppliers or prepare based on orders, not walk-in-traffic speculation AI
systems & 7 miles of fiber optics monitor & guide Inventory turns / yr. 197 vs. 40 (less spoilage + fresher
food) Inv. T -> every 2 days Seafood: 1 day vs. 7-9 days Unmatched freshness & food safety
Question:
8. How Do We Know if Assets Yield Sustainable Advantage?
Answer:
Rareness Value Imperfectly imitable Non-Substitutable
Question:
9. Key Resources for Competitive Advantage
Answer:
Imitation-resistant Value Chain Organization Brand Scale Data - Differentiation & Switching Costs
Network Effects Distribution Channels Alliances (with complementary firms & competitors) Patents?
Question:
10. Straddling:
Answer:
When a firm adopts more than one method of doing business (occupies more than one position) yet fails to
gain the full advantages of any of these efforts.
Question:
11. Value Chain
Answer:
The value chain is the set of activities that bring a something to the market Inbound logistics Operations
Outbound logistics Marketing and sales Service Really not a thing to restart a value chain
Question:
12. Brand
Answer:
Brand is given in customer experience in the idea that your customers are not ready to leave you. The
symbolic embodiment of all the information connected with a product or service.
Question:
13. Viral Market
Answer:
Leveraging consumers to promote a product or service.
Question:
14. Scale Advantages
Answer:
advantages related to size
