WPC 480- FINAL EXAM STUDY GUIDE
What is Strategy? - Answers - What you will and will not do
Strategy Definition - Answers - Integrated and coordinated set of actions that exploit
core competencies
Competitive Advantage - Answers - Something you do better than anyone else
Sustainable Competitive Advantage Components (GOING TO BE A SHORT ANSWER,
THINK OF UBER) - Answers - Cost to imitate, valuable, rare, and non-substitutable
Costly to Imitate - Answers - a unique, historical event
Casually Ambigous - Answers - Competitors don't know how you do what you do
Social Complexity - Answers - Personal and interpersonal relationships give advantage
Valuable - Answers - What is the firm really good at?
Rare - Answers - Not easy to imitate
Does a sustainable competitive advantage last forever? - Answers - No.
Liability of Foreigness - Answers - Risk of participating outside a firm's domestic market
that's new to them (culture, laws & regulations, and currency)
I/O Model (Industrial Organization) - Answers - External Model: demographics,
economic, political, legal, sociocultural, tech, global, and physical environment
Resource Based Model - Answers - Internal Model: process improvement, analyze
activities along supply chain, finance HR, IT
(how can we do more with less)
Five Force Model - Answers - Threats of new entry, bargaining power of customers,
bargaining power of suppliers, threat of substitutes, and rivalry among competitors
Economies of Scale - Answers - Spread your cost among many different divisions
Switching Costs - Answers - Costs incurred by the customer when they decide to switch
to another product (describe in one sentence)
Why did the 1st snapple acquisition failed? - Answers - Trying to only use them for their
warm/cold dist. network
, went from healthy to nonhealthy
lost its uniqueness
fired famous spokespeople
lost credibility when people discovered it was water and sugar
people didn't buy in bulk
only sold top 15 best selling flavors
Merger - Answers - Two companies combine/integrate
Acquisition - Answers - One company gets controlling interest of another
Down-Scoping (Cost Saving Method) - Answers - closing or spinning off a division or
product line that is underperforming
Down-Sizing (Cost Saving Method) - Answers - Reduce the size of your operations
(headcount, people)
Re-structure (Cost Saving Method) - Answers - Changing one's business or financial
operations (completely change such as closing U.S. manufacturing and outsourcing it
all overseas)
Why do many mergers, acquisitions, and takeovers fail? (GOING TO BE A SHORT
ANSWER, FOCUS ON SNAPPLE) - Answers - cultures do not align, interests do not
align, too much diversification, systems don't align, winner's curse, due diligence failed,
and merged entities become too large
Competitive Blindspot - Answers - Firm being surprised by a competitor's actions
resulting in a negative consequence (Blockbuster and Netflix)
Resource Similarity - Answers - If two company's resources are very similar, it becomes
challenging to differ
Resource Similarity Solutions - Answers - Either innovate a better product or process or
drive your prices down
Drivers of competitive behavior - Answers - awareness, motivation, ability
Awareness - Answers - Do I know what my competitor is doing?
Motivation - Answers - Do I care?
What is Strategy? - Answers - What you will and will not do
Strategy Definition - Answers - Integrated and coordinated set of actions that exploit
core competencies
Competitive Advantage - Answers - Something you do better than anyone else
Sustainable Competitive Advantage Components (GOING TO BE A SHORT ANSWER,
THINK OF UBER) - Answers - Cost to imitate, valuable, rare, and non-substitutable
Costly to Imitate - Answers - a unique, historical event
Casually Ambigous - Answers - Competitors don't know how you do what you do
Social Complexity - Answers - Personal and interpersonal relationships give advantage
Valuable - Answers - What is the firm really good at?
Rare - Answers - Not easy to imitate
Does a sustainable competitive advantage last forever? - Answers - No.
Liability of Foreigness - Answers - Risk of participating outside a firm's domestic market
that's new to them (culture, laws & regulations, and currency)
I/O Model (Industrial Organization) - Answers - External Model: demographics,
economic, political, legal, sociocultural, tech, global, and physical environment
Resource Based Model - Answers - Internal Model: process improvement, analyze
activities along supply chain, finance HR, IT
(how can we do more with less)
Five Force Model - Answers - Threats of new entry, bargaining power of customers,
bargaining power of suppliers, threat of substitutes, and rivalry among competitors
Economies of Scale - Answers - Spread your cost among many different divisions
Switching Costs - Answers - Costs incurred by the customer when they decide to switch
to another product (describe in one sentence)
Why did the 1st snapple acquisition failed? - Answers - Trying to only use them for their
warm/cold dist. network
, went from healthy to nonhealthy
lost its uniqueness
fired famous spokespeople
lost credibility when people discovered it was water and sugar
people didn't buy in bulk
only sold top 15 best selling flavors
Merger - Answers - Two companies combine/integrate
Acquisition - Answers - One company gets controlling interest of another
Down-Scoping (Cost Saving Method) - Answers - closing or spinning off a division or
product line that is underperforming
Down-Sizing (Cost Saving Method) - Answers - Reduce the size of your operations
(headcount, people)
Re-structure (Cost Saving Method) - Answers - Changing one's business or financial
operations (completely change such as closing U.S. manufacturing and outsourcing it
all overseas)
Why do many mergers, acquisitions, and takeovers fail? (GOING TO BE A SHORT
ANSWER, FOCUS ON SNAPPLE) - Answers - cultures do not align, interests do not
align, too much diversification, systems don't align, winner's curse, due diligence failed,
and merged entities become too large
Competitive Blindspot - Answers - Firm being surprised by a competitor's actions
resulting in a negative consequence (Blockbuster and Netflix)
Resource Similarity - Answers - If two company's resources are very similar, it becomes
challenging to differ
Resource Similarity Solutions - Answers - Either innovate a better product or process or
drive your prices down
Drivers of competitive behavior - Answers - awareness, motivation, ability
Awareness - Answers - Do I know what my competitor is doing?
Motivation - Answers - Do I care?
