B AD 4013 - BOLINO - EXAM 1 || 100% Accurate Solutions.
Concept of Strategy correct answers A firm's theory about how to gain sustainable
competitive advantage
Concept of Strategy correct answers The mechanism by which firms aim to exploit core
competencies and gain a competitive advantage
Concept of Strategy correct answers The art and science of formulating, implementing, and
evaluating cross-functional decisions that enable an organization to achieve its objectives
Concept of Strategy correct answers Decisions made in order to obtain outcomes consistent
with mission/goals
Concept of Strategy correct answers Management's"game plan"to achieve organizational
objectives, conduct operations, compete successfully
In 1988, Henry Mintzberg concludes that there are five types of strategies: correct answers
Strategy as plan - a directed course of action to achieve an intended set of goals
Strategy as pattern - a consistent pattern of past behavior, with a strategy realized over time
rather than planned or intended. Where the realized pattern was different from the intent, he
referred to the strategy as emergent
Strategy as position - locating brands, products, or companies within the market
Strategy as ploy - a specific maneuver intended to outsmart a competitor
Strategy as perspective - executing strategy based on a "theory of the business"
Strategy can be used as... correct answers Action, Aspiration, Vision
Key objectives of the firm correct answers Sustainable competitive advantage, Above-
average returns
Sustainable competitive advantage correct answers Occurs when a firm implements a value-
creating strategy and other companies are unable to duplicate it or find it too costly to imitate
(i.e., the ability to create more economic value than competitors)
Most dangerous competitors? correct answers Your most dangerous competitors are those
that are most like you. The differences b/t you and your competitors are the basis of your
advantages.
Above average returns correct answers are returns in excess of what an investor expects to
earn from another investment with a similar amount of risk.
ROIC correct answers return on invested capital - The fundamental goal of a company is
superior long-term return on investment
, A competitive advantage has three key characteristics: correct answers 1. it provides superior
value to customers
2. it is hard to imitate
3. it enhances one's ability to respond to changes in the environment.
Measuring Competitive Advantage: Accounting correct answers ROA, ROS, ROE, EPS, etc.
that exceed industry averages
Measuring Competitive Advantage: Economic correct answers earning a return in excess of
the cost of capital (WACC: weighted average cost of capital)
BCG Matrix correct answers Question marks - Risky, a few become stars others divest
Stars - Rapid growth and expansion. Increase investment
Cash cows - Milk" to finance question marks and stars
Dogs - No investment. Divest
I/O (industrial organization) model of above-average returns (AAR) (Porter 1980s) correct
answers industry in which firm chooses to compete has a stronger influence on the firm's
performance than do choices made by managers inside the organization
Industry properties for I/O: correct answers Economies of scale, barriers to market entry,
diversification, product differentiation
I/O model has four underlying assumptions: correct answers The external environment is
assumed to impose pressure/constraints
Most firms competing in an industry are assumed to control similar resources
Resources are highly mobile across firms
Decision makers are assumed to be rational and acting in the firm's best interest
The "secret" for AAR: correct answers a cost leadership or a differentiated strategy (generic
corporate strategies)
I/O Model of Above-Average Returns correct answers
Limits of the Porter Framework correct answers Market power versus efficiency
Industry versus firm effects
The cost of entering "attractive" industries
Central conclusion: It is not possible to evaluate the attractiveness of an industry independent
of the resources a firm brings to that industry.
Concept of Strategy correct answers A firm's theory about how to gain sustainable
competitive advantage
Concept of Strategy correct answers The mechanism by which firms aim to exploit core
competencies and gain a competitive advantage
Concept of Strategy correct answers The art and science of formulating, implementing, and
evaluating cross-functional decisions that enable an organization to achieve its objectives
Concept of Strategy correct answers Decisions made in order to obtain outcomes consistent
with mission/goals
Concept of Strategy correct answers Management's"game plan"to achieve organizational
objectives, conduct operations, compete successfully
In 1988, Henry Mintzberg concludes that there are five types of strategies: correct answers
Strategy as plan - a directed course of action to achieve an intended set of goals
Strategy as pattern - a consistent pattern of past behavior, with a strategy realized over time
rather than planned or intended. Where the realized pattern was different from the intent, he
referred to the strategy as emergent
Strategy as position - locating brands, products, or companies within the market
Strategy as ploy - a specific maneuver intended to outsmart a competitor
Strategy as perspective - executing strategy based on a "theory of the business"
Strategy can be used as... correct answers Action, Aspiration, Vision
Key objectives of the firm correct answers Sustainable competitive advantage, Above-
average returns
Sustainable competitive advantage correct answers Occurs when a firm implements a value-
creating strategy and other companies are unable to duplicate it or find it too costly to imitate
(i.e., the ability to create more economic value than competitors)
Most dangerous competitors? correct answers Your most dangerous competitors are those
that are most like you. The differences b/t you and your competitors are the basis of your
advantages.
Above average returns correct answers are returns in excess of what an investor expects to
earn from another investment with a similar amount of risk.
ROIC correct answers return on invested capital - The fundamental goal of a company is
superior long-term return on investment
, A competitive advantage has three key characteristics: correct answers 1. it provides superior
value to customers
2. it is hard to imitate
3. it enhances one's ability to respond to changes in the environment.
Measuring Competitive Advantage: Accounting correct answers ROA, ROS, ROE, EPS, etc.
that exceed industry averages
Measuring Competitive Advantage: Economic correct answers earning a return in excess of
the cost of capital (WACC: weighted average cost of capital)
BCG Matrix correct answers Question marks - Risky, a few become stars others divest
Stars - Rapid growth and expansion. Increase investment
Cash cows - Milk" to finance question marks and stars
Dogs - No investment. Divest
I/O (industrial organization) model of above-average returns (AAR) (Porter 1980s) correct
answers industry in which firm chooses to compete has a stronger influence on the firm's
performance than do choices made by managers inside the organization
Industry properties for I/O: correct answers Economies of scale, barriers to market entry,
diversification, product differentiation
I/O model has four underlying assumptions: correct answers The external environment is
assumed to impose pressure/constraints
Most firms competing in an industry are assumed to control similar resources
Resources are highly mobile across firms
Decision makers are assumed to be rational and acting in the firm's best interest
The "secret" for AAR: correct answers a cost leadership or a differentiated strategy (generic
corporate strategies)
I/O Model of Above-Average Returns correct answers
Limits of the Porter Framework correct answers Market power versus efficiency
Industry versus firm effects
The cost of entering "attractive" industries
Central conclusion: It is not possible to evaluate the attractiveness of an industry independent
of the resources a firm brings to that industry.
