STRATEGIC MANAGEMENT 14 QUESTION SET
WITH RATIONALES AND CORPORATE
STRATEGY AND COMPETITIVE ADVANTAGE
REVIEW 2026
◉ Define strategy in the context of strategic management.
Answer: An integrated and coordinated set of commitments and
actions designed to exploit core competencies and gain a
competitive advantage.
◉ What constitutes a competitive advantage?
Answer: When a firm implements a strategy that creates superior
value for customers and that its competitors cannot duplicate or find
too costly to imitate.
◉ What are above-average returns?
Answer: Returns in excess of what an investor expects to earn from
other investments with a similar amount of risk.
◉ How is organizational culture defined?
Answer: The complex set of ideologies, symbols, and core values
shared throughout the firm that influence how the firm conducts
business.
,◉ What is risk in investment terms?
Answer: An investor's uncertainty about the economic gains or
losses that will result from a particular investment.
◉ What are average returns?
Answer: Returns equal to those an investor expects to earn from
other investments with a similar amount of risk.
◉ What is the strategic management process?
Answer: The full set of commitments, decisions, and actions
required for a firm to achieve strategic competitiveness and earn
above-average returns.
◉ What does the Industrial Organization (I/O) model focus on?
Answer: The external environment (industry) as the primary
determinant of a firm's strategic actions.
◉ What are the underlying assumptions of the I/O model?
Answer: The external environment imposes pressures and
constraints that determine strategies for above-average returns.
◉ What is the Five Forces Tool used for?
, Answer: To identify industry attractiveness by analyzing the power
of suppliers, buyers, competitive rivalry, product substitutes, and
potential entrants.
◉ What does the resource-based model emphasize?
Answer: The internal organization (resources/capabilities) as the
basis for a firm's strategy.
◉ What are core competencies?
Answer: Capabilities that serve as a source of competitive advantage
over rivals.
◉ What are the VRIN criteria for sustainable competitive advantage?
Answer: Resources must be Valuable, Rare, Costly to Imitate, and
Non-substitutable.
◉ What is the purpose of vision and mission statements?
Answer: To inform stakeholders of what the firm is and what it seeks
to accomplish.
◉ What is the difference between vision and mission?
Answer: Vision is a picture of what the firm wants to be, while
mission specifies the businesses in which the firm intends to
compete.
WITH RATIONALES AND CORPORATE
STRATEGY AND COMPETITIVE ADVANTAGE
REVIEW 2026
◉ Define strategy in the context of strategic management.
Answer: An integrated and coordinated set of commitments and
actions designed to exploit core competencies and gain a
competitive advantage.
◉ What constitutes a competitive advantage?
Answer: When a firm implements a strategy that creates superior
value for customers and that its competitors cannot duplicate or find
too costly to imitate.
◉ What are above-average returns?
Answer: Returns in excess of what an investor expects to earn from
other investments with a similar amount of risk.
◉ How is organizational culture defined?
Answer: The complex set of ideologies, symbols, and core values
shared throughout the firm that influence how the firm conducts
business.
,◉ What is risk in investment terms?
Answer: An investor's uncertainty about the economic gains or
losses that will result from a particular investment.
◉ What are average returns?
Answer: Returns equal to those an investor expects to earn from
other investments with a similar amount of risk.
◉ What is the strategic management process?
Answer: The full set of commitments, decisions, and actions
required for a firm to achieve strategic competitiveness and earn
above-average returns.
◉ What does the Industrial Organization (I/O) model focus on?
Answer: The external environment (industry) as the primary
determinant of a firm's strategic actions.
◉ What are the underlying assumptions of the I/O model?
Answer: The external environment imposes pressures and
constraints that determine strategies for above-average returns.
◉ What is the Five Forces Tool used for?
, Answer: To identify industry attractiveness by analyzing the power
of suppliers, buyers, competitive rivalry, product substitutes, and
potential entrants.
◉ What does the resource-based model emphasize?
Answer: The internal organization (resources/capabilities) as the
basis for a firm's strategy.
◉ What are core competencies?
Answer: Capabilities that serve as a source of competitive advantage
over rivals.
◉ What are the VRIN criteria for sustainable competitive advantage?
Answer: Resources must be Valuable, Rare, Costly to Imitate, and
Non-substitutable.
◉ What is the purpose of vision and mission statements?
Answer: To inform stakeholders of what the firm is and what it seeks
to accomplish.
◉ What is the difference between vision and mission?
Answer: Vision is a picture of what the firm wants to be, while
mission specifies the businesses in which the firm intends to
compete.
