MGMT 3004 Exam 1 UMN Final Test Verified Questions And Answers.

What makes an industry attractive? (PORTER'S 5 FORCES ARE LOW) - correct answer threat of entry is low threat of substitute products is low intensity of rivalry of existing firms is low bargaining power of suppliers is low or weak buyer power is low What makes an industry unattractive? - correct answer threat of entry is high threat of substitute products is high intensity of rivalry of existing firms is high bargaining power of buyers is strong bargaining power of suppliers is strong strategy - correct answer integrated and coordinated set of commitments and actions designed to gain a competitive advantage competitive advantage - correct answer a firm has a competitive advantage when its strategy leads to better performance than competitors ACHIEVE: unique aspect in your market above-average returns - correct answer returns in excess of what investors expect in comparison to other investments with similar risk; returns in excess of industry average what are the two models of strategy? - correct answer RBV & I/O Perspective Resource Based View - correct answer -reaction to IO Perspective -premise that internal capabilities matters -rents due to barriers to resource acquisition and imitation -some firms are more profitable than others I/O Perspective - correct answer -across industries -premise that industry structure matters most -rents due primarily to barriers to competition -some industries are more profitable than others Vision - correct answer where are we headed? -picture of what the firm wants to be and ultimately wants to achieve Mission - correct answer more concrete than vision -what the firm actually does, specific businesses in which the firm intends to compete and products/services it intends to provide I/O Advantages - correct answer -unique market position for distinct consumers -selection of industries- dominating particular market niche -look at different product markets SELECTION RBV Advantages - correct answer -distinctive resources -deliver unique economic value by exploiting strategic resources (assets/capabilities) that competitors don't have -emphasis is on breadth of activities (use resources in many different products and markets) general environment - correct answer socio/cultural, demographic, political, technological, macroeconomic, legal regulatory, ecological competitive (industry) environment - correct answer competitors, suppliers, and customers Porter's 5 Forces (what is is about) - correct answer questions about competitive pressure and how they impact a firm's prices Questions about Porter's 5 Forces - correct answer Threat of entry: -how much competitive pressure comes from potential new entrants? -how much are prices constrained by the risk that new entrants will enter and steal a business? Threat of substitution: -How much competitive pressure is applied by substitute industries? -How likely is it that consumers in this industry will switch to products from another industry? Internal Rivalry: