BUSINESS STRATEGY EXAM 9 QUESTIONS
WITH 100% CORRECT ANSWERS!!
Successful Strategy
Long term goals
Understanding competitive environment
Objective assessment of resources
Business/ Competitive Strategy
Building a competitive advantage and doing value creation and understanding
-> how to compete
Corporate Strategy
About the growth of the firm and its boundaries
-> where to compete
Value Captured
The difference between revenues (price charged) and costs
Value Creation
Benefits flowing to stakeholders
Competitive Advantage
Ability to outperform competitors by creating more value for customers or operating more
efficiently
Industry
A set of companies selling a similar or related products
Profitable: for existing industry companies (incumbents)
Attractive: for possible new competitors (entrants)
Porter's 5 forces
, 1. Industry rivalry - concentration, diversity of competition, product differentiation, excess
capacity, exit barriers, cost conditions, Herfindahl Index (HHI) sum of squares of all market
shares
2. Supplier power - price power, bargaining power
3. Buyer power - price sensitivity, bargaining power
4. Threat of substitutes -
5. Threat of new entrants - capital requirements, economies of scale, cost advantage, product
differentiation, barriers
Application of 5 forces
Application of 5 forces:
Forecasting Profitability
Strategies to improve profitability
Attractiveness
Extensions to industry analysis
1. Complementors in the value chain
2. Industry evolution and life cycles
3. Strategic groups analysis
Value Chain
Raw materials
Suppliers
Industry (+ complements)
Channels
Buyers (+ complements)
Life Cycle
Introduction
Growth
Maturity
Decline
WITH 100% CORRECT ANSWERS!!
Successful Strategy
Long term goals
Understanding competitive environment
Objective assessment of resources
Business/ Competitive Strategy
Building a competitive advantage and doing value creation and understanding
-> how to compete
Corporate Strategy
About the growth of the firm and its boundaries
-> where to compete
Value Captured
The difference between revenues (price charged) and costs
Value Creation
Benefits flowing to stakeholders
Competitive Advantage
Ability to outperform competitors by creating more value for customers or operating more
efficiently
Industry
A set of companies selling a similar or related products
Profitable: for existing industry companies (incumbents)
Attractive: for possible new competitors (entrants)
Porter's 5 forces
, 1. Industry rivalry - concentration, diversity of competition, product differentiation, excess
capacity, exit barriers, cost conditions, Herfindahl Index (HHI) sum of squares of all market
shares
2. Supplier power - price power, bargaining power
3. Buyer power - price sensitivity, bargaining power
4. Threat of substitutes -
5. Threat of new entrants - capital requirements, economies of scale, cost advantage, product
differentiation, barriers
Application of 5 forces
Application of 5 forces:
Forecasting Profitability
Strategies to improve profitability
Attractiveness
Extensions to industry analysis
1. Complementors in the value chain
2. Industry evolution and life cycles
3. Strategic groups analysis
Value Chain
Raw materials
Suppliers
Industry (+ complements)
Channels
Buyers (+ complements)
Life Cycle
Introduction
Growth
Maturity
Decline
