BUSMHR 4490 EXAM 1 QUESTIONS AND
ANSWERS
Strategic Management - Correct Answers -the integrative management field that
combines analysis, formulation, and implementation in the quest for competitive
advantage
Strategy - Correct Answers -a set of goal-directed actions a firm takes to gain and
sustain superior performance relative to competitors
3 Elements of a "good strategy" - Correct Answers -1. Diagnosis
2. Guiding Policy
3. Set of Coherent Actions
Competitive Advantage - Correct Answers -Superior performance relative to other
competitors in the same industry or the industry average
SCP Model - Correct Answers -Structure-Conduct-Performance; a theoretical
framework from IO economics that helps us explain differences in industry performance
Basic View of the SCP Model - Correct Answers -Industry structure affects how firms
behave
4 types of industries - Correct Answers -1. Perfect Competition
2. Monopolistic Competition
3. Oligopoly
4. Monopoly
Perfect Competition - Correct Answers -fragmented and has many small firms, a
commodity product, easy entrance, little ability to raise prices;mediocre pizza
Monopolistic Competition - Correct Answers -little bit of pricing power and profits are
higher than in perfect competition; emphasis on product differentiation; Jeni's icecream
Sustainable Competitive Advantage - Correct Answers -outperforming competitors or
the industry average over a prolonged period of time
Competitive Parity - Correct Answers -performance of two or more firms at the same
level
, Strategic Positioning - Correct Answers -when managers stake out a unique position
within an industry that allows the firm to provide value to customers, while controlling
costs
Differentiation strategy - Correct Answers -focuses on delivering unique features &
service
Cost-leadership strategy - Correct Answers -focused on lowering costs
Firm performance is primarily determined by - Correct Answers -1. Industry effects
2. Firm effects
Black Swan Events - Correct Answers -incidents that describe highly improbably but
high-impact events; 9/11
Internal Stakeholders - Correct Answers -stockholders, employees, board members
External Stakeholders - Correct Answers -Customers, suppliers, alliance partners,
creditors, media, etc.
Stakeholder Strategy - Correct Answers -an integrative approach to managing a diverse
set of stakeholders effectively in order to gain & sustain competitive advantage
Stakeholders have 3 important attributes: - Correct Answers -1. Power
2. Legitimacy
3. Urgency
5 Steps in Stakeholder Impact Analysis - Correct Answers -1. Identify Stakeholders
2. Identify their claims & interests
3. identify Opp and threats they may present
4. Identify social responsibilities
5. Address stakeholder concern
Corporate Social Responsibility (CSR) - Correct Answers -a framework (pyramid) that
helps firm recognize and address the economic, legal, social/ethical, and philanthropic
expectations that society has
AFI Strategy Framework - Correct Answers -Analyze, formulate, implement; explains &
predict differences in firm performance and helps managers formulate & implement a
strategy
Business Strategy - Correct Answers -How to build a sustainable competitive advantage
in a discrete & identifiable market
Corporate Strategy - Correct Answers -The overall plan for a diversified company
ANSWERS
Strategic Management - Correct Answers -the integrative management field that
combines analysis, formulation, and implementation in the quest for competitive
advantage
Strategy - Correct Answers -a set of goal-directed actions a firm takes to gain and
sustain superior performance relative to competitors
3 Elements of a "good strategy" - Correct Answers -1. Diagnosis
2. Guiding Policy
3. Set of Coherent Actions
Competitive Advantage - Correct Answers -Superior performance relative to other
competitors in the same industry or the industry average
SCP Model - Correct Answers -Structure-Conduct-Performance; a theoretical
framework from IO economics that helps us explain differences in industry performance
Basic View of the SCP Model - Correct Answers -Industry structure affects how firms
behave
4 types of industries - Correct Answers -1. Perfect Competition
2. Monopolistic Competition
3. Oligopoly
4. Monopoly
Perfect Competition - Correct Answers -fragmented and has many small firms, a
commodity product, easy entrance, little ability to raise prices;mediocre pizza
Monopolistic Competition - Correct Answers -little bit of pricing power and profits are
higher than in perfect competition; emphasis on product differentiation; Jeni's icecream
Sustainable Competitive Advantage - Correct Answers -outperforming competitors or
the industry average over a prolonged period of time
Competitive Parity - Correct Answers -performance of two or more firms at the same
level
, Strategic Positioning - Correct Answers -when managers stake out a unique position
within an industry that allows the firm to provide value to customers, while controlling
costs
Differentiation strategy - Correct Answers -focuses on delivering unique features &
service
Cost-leadership strategy - Correct Answers -focused on lowering costs
Firm performance is primarily determined by - Correct Answers -1. Industry effects
2. Firm effects
Black Swan Events - Correct Answers -incidents that describe highly improbably but
high-impact events; 9/11
Internal Stakeholders - Correct Answers -stockholders, employees, board members
External Stakeholders - Correct Answers -Customers, suppliers, alliance partners,
creditors, media, etc.
Stakeholder Strategy - Correct Answers -an integrative approach to managing a diverse
set of stakeholders effectively in order to gain & sustain competitive advantage
Stakeholders have 3 important attributes: - Correct Answers -1. Power
2. Legitimacy
3. Urgency
5 Steps in Stakeholder Impact Analysis - Correct Answers -1. Identify Stakeholders
2. Identify their claims & interests
3. identify Opp and threats they may present
4. Identify social responsibilities
5. Address stakeholder concern
Corporate Social Responsibility (CSR) - Correct Answers -a framework (pyramid) that
helps firm recognize and address the economic, legal, social/ethical, and philanthropic
expectations that society has
AFI Strategy Framework - Correct Answers -Analyze, formulate, implement; explains &
predict differences in firm performance and helps managers formulate & implement a
strategy
Business Strategy - Correct Answers -How to build a sustainable competitive advantage
in a discrete & identifiable market
Corporate Strategy - Correct Answers -The overall plan for a diversified company
