SEVI 3013 Exam Study Guide Questions And Answers
Graded A+ 2025/2026
Knowledge intensity - consists of information, intelligence, and expertise; basis of
technology and its application
Stakeholders - individuals/entities who may be affected by or affect the firms outcomes
Strategic leaders - people located in different levels of the firm to select actions that help
the firm achieve its vision and fulfill its mission; decisive and committed to creating value
Above average returns - investors get yields that exceed what they expect from other
investments with similar risks
Key elements of Industrial Organizational (IO) model - industry-based, external
environment, attractive industry, strategy formulation, assets and skills, strategy
implementation, superior returns
5 forces model - threat of new entrants, rivalry among competing firms, bargaining
power of suppliers, bargaining power of buyers, threat of substitute products
Industry - set of firms that produce similar products
Industry boundaries - can change rapidly; helps executives determine the arena in
which their firm is competing
How strategic managers deal with changing industry boundaries - be willing to change
your perception of industry and have multiple perceptions of your industry
Components of general environment - ecological, economic, political, sociocultural,
legal, technological, global, demographic
Members of an industry - industry and its buyers and suppliers
Suppliers of an industry - set of firms that supplies raw materials to the industry
5 Forces Model key objectives - determines the future and current profitability of the
industry
Criticisms of IO model - IO model makes the following assumptions which are not
realistic:
-There is only one strategy that can be successful in an industry.
-All firms can (and ought to) adopt the above strategy
Strategic groups - set of firms following similar strategies
Competitor analysis - focuses on each company against which a firm competes directly
,Competitor analysis key elements - capabilities, current strategies, assumptions, future
objectives, response
Resource based model key elements - resources, capability, competitive advantage,
attractive industry, strategy formulation and implantation, superior returns
Resources - broad in scope; cover a spectrum of individual, social, and organizational
phenomena
Capabilities - bundles of resources or organizational capability to deploy bundles of
resources; allow an organization to perform certain aspects of its business well
Core competencies - capabilities that are rare, valuable, imperfectly-imitable /non-
substitutable and organized to capture value
Tangible resources - Relatively easy to identify, and include physical and financial
assets used to create value for customers
-Physical assets (Ex. plants & facilities)
-Financial assets (ex. cash & borrowing capability)
-Technoligical resources (ex.patents, copyrights)
-Organizational resources (ex. effective planning processes)
Intangible resources - not easy to define and measure
-Human resources (ex. trust, experience, managerial skills, etc.)
-Innovation resources (ex. innovation capabilities, tech & scientific expertise)
-Reputation Resources (ex. brand names)
VRIO framework - value, rarity, imitability, and organization; categorize resources to
determine which are a competitive advantage
Entry tickets - competencies that a firm must necessarily have to survive in the industry;
valuable and non-substitutable capabilities
Core rigidities - former core competencies that now generate inertia and stifle innovation
Forms of imitation - direct imitation, bells and whistles, stripping, substitution
Why competitive advantage may/not diminish over time - sustainable competitive
advantage must be valuable, rare, imperfectly inimitable, and non-substitutable
Value chain analysis - allows the firm to understand the parts of its operations that
create value and those that do not
, Value chain analysis key elements - consists of primary and support activities
Outsourcing - purchase of a value-creating activity or support function from an external
supplier
Building blocks of a business level strategy (aka generic strategy) - Which customers
will we serve? What needs of the target customers will be served? And how will those
needs be served?
Reach - access to customers
Richness - depth and detail of communications with customers
Affiliation - facilitation of customer relationship
Different generic business level strategies - Cost Leadership, Differentiation, Focused
low cost, Focused differentiation, stuck in the middle, and integrated cost differentiation
strategies
Cost leadership - standardized products for typical customers; low cost products with
competitive levels of differentiation; focus on efficiency to keep costs lower than
competitors
Differentiation - products that have different, valued features that are sold at a premium
price; differentiate the products along as many dimensions as possible; less product
similarity helps insulate company from competition with rivals
Focus strategies - integrated set of actions taken to produce goods or services that
serve the needs of a particular competitive segment; serves the needs of a specific
customer segment of industry segment
Stuck in the middle - can't produce sufficient low cost or differentiation; compete at a
disadvantage; are unable to earn more than average returns
Integrated cost/differentiation - provide low cost products with valued differentiated
features; use primary and support activities to produce differentiated products at
relatively low costs
How do the different strategies help companies deal with adverse conditions such as
high bargaining power of suppliers and other factors? - develop a long-term relationship
with suppliers, build trust, increase prices, reduce cost, gain more information
Cost - amount of money that a firm pays to deliver products or services to the customer
Price - what the customer pays to obtain the product/service
Graded A+ 2025/2026
Knowledge intensity - consists of information, intelligence, and expertise; basis of
technology and its application
Stakeholders - individuals/entities who may be affected by or affect the firms outcomes
Strategic leaders - people located in different levels of the firm to select actions that help
the firm achieve its vision and fulfill its mission; decisive and committed to creating value
Above average returns - investors get yields that exceed what they expect from other
investments with similar risks
Key elements of Industrial Organizational (IO) model - industry-based, external
environment, attractive industry, strategy formulation, assets and skills, strategy
implementation, superior returns
5 forces model - threat of new entrants, rivalry among competing firms, bargaining
power of suppliers, bargaining power of buyers, threat of substitute products
Industry - set of firms that produce similar products
Industry boundaries - can change rapidly; helps executives determine the arena in
which their firm is competing
How strategic managers deal with changing industry boundaries - be willing to change
your perception of industry and have multiple perceptions of your industry
Components of general environment - ecological, economic, political, sociocultural,
legal, technological, global, demographic
Members of an industry - industry and its buyers and suppliers
Suppliers of an industry - set of firms that supplies raw materials to the industry
5 Forces Model key objectives - determines the future and current profitability of the
industry
Criticisms of IO model - IO model makes the following assumptions which are not
realistic:
-There is only one strategy that can be successful in an industry.
-All firms can (and ought to) adopt the above strategy
Strategic groups - set of firms following similar strategies
Competitor analysis - focuses on each company against which a firm competes directly
,Competitor analysis key elements - capabilities, current strategies, assumptions, future
objectives, response
Resource based model key elements - resources, capability, competitive advantage,
attractive industry, strategy formulation and implantation, superior returns
Resources - broad in scope; cover a spectrum of individual, social, and organizational
phenomena
Capabilities - bundles of resources or organizational capability to deploy bundles of
resources; allow an organization to perform certain aspects of its business well
Core competencies - capabilities that are rare, valuable, imperfectly-imitable /non-
substitutable and organized to capture value
Tangible resources - Relatively easy to identify, and include physical and financial
assets used to create value for customers
-Physical assets (Ex. plants & facilities)
-Financial assets (ex. cash & borrowing capability)
-Technoligical resources (ex.patents, copyrights)
-Organizational resources (ex. effective planning processes)
Intangible resources - not easy to define and measure
-Human resources (ex. trust, experience, managerial skills, etc.)
-Innovation resources (ex. innovation capabilities, tech & scientific expertise)
-Reputation Resources (ex. brand names)
VRIO framework - value, rarity, imitability, and organization; categorize resources to
determine which are a competitive advantage
Entry tickets - competencies that a firm must necessarily have to survive in the industry;
valuable and non-substitutable capabilities
Core rigidities - former core competencies that now generate inertia and stifle innovation
Forms of imitation - direct imitation, bells and whistles, stripping, substitution
Why competitive advantage may/not diminish over time - sustainable competitive
advantage must be valuable, rare, imperfectly inimitable, and non-substitutable
Value chain analysis - allows the firm to understand the parts of its operations that
create value and those that do not
, Value chain analysis key elements - consists of primary and support activities
Outsourcing - purchase of a value-creating activity or support function from an external
supplier
Building blocks of a business level strategy (aka generic strategy) - Which customers
will we serve? What needs of the target customers will be served? And how will those
needs be served?
Reach - access to customers
Richness - depth and detail of communications with customers
Affiliation - facilitation of customer relationship
Different generic business level strategies - Cost Leadership, Differentiation, Focused
low cost, Focused differentiation, stuck in the middle, and integrated cost differentiation
strategies
Cost leadership - standardized products for typical customers; low cost products with
competitive levels of differentiation; focus on efficiency to keep costs lower than
competitors
Differentiation - products that have different, valued features that are sold at a premium
price; differentiate the products along as many dimensions as possible; less product
similarity helps insulate company from competition with rivals
Focus strategies - integrated set of actions taken to produce goods or services that
serve the needs of a particular competitive segment; serves the needs of a specific
customer segment of industry segment
Stuck in the middle - can't produce sufficient low cost or differentiation; compete at a
disadvantage; are unable to earn more than average returns
Integrated cost/differentiation - provide low cost products with valued differentiated
features; use primary and support activities to produce differentiated products at
relatively low costs
How do the different strategies help companies deal with adverse conditions such as
high bargaining power of suppliers and other factors? - develop a long-term relationship
with suppliers, build trust, increase prices, reduce cost, gain more information
Cost - amount of money that a firm pays to deliver products or services to the customer
Price - what the customer pays to obtain the product/service
