MGMT 449 EXAM 1 QUESTIONS WITH VERIFIED
ANSWERS
Strategy - Answers - set of actions that managers take to out perform competitors and
achieve superior profitability
What are the three aspects of good strategy? - Answers - Analysis, formulation, and
implementation
Analysis - Answers - - businesses's environment and industry conditions
- firm's financial and competitive capabilities
Formulation - Answers - create a vision for the firm's future direction
Implementation - Answers - crafting an action plan and doing it
How do firms compete differently from rivals? - Answers - - do what they don't or do it
better
- do what they can't
- do things that attract customers and set it apart from competitors
- do what the firm must do and know what it must not do
Competitive advantage - Answers - provide buyers with superior value or offers product
at same value to rival, but lower cost to firm
Sustainable competitive advantage - Answers - basis for advantage persists despite
best efforts of competitors to match/surpass its advantage (ex: Apple)
Why do firms modify strategy? - Answers - - market conditions change
- advancing technology
- fresh moves of competitors
- shifting buyer needs
- emerging market opportunities
- new ideas for improving strategies
Business model - Answers - how a strategy will create value for the customer while
creating revenue to cover costs and create a profit
What are some common examples of business models? - Answers - - razor-razorblade
- subscription
- pay-as-you-go
- freemium
- wholesale
, - agency
- bundling
Why is executing and crafting a strategy important? - Answers - - prescription for doing
business
- roadmap to competitive advantage
- plan for pleasing customers
- long term-standout marketplace performance
What are the five stages of strategy making and execution process? - Answers - 1.
Develop a strategic vision, mission statement, and a set of core values.
2. Set objectives.
3. Craft a strategy
4. Execute the strategy
5. Evaluate performance and initiating corrective adjustments
Strategic vision - Answers - describes management's aspirations for the company's
future and the course and direction charted to achieve them
Mission statement - Answers - uses specific language to give the firm it's own unique
identity. "Who we are, what we do, why we are here."
What are examples of specific language used in a mission statement? - Answers - -
identify firm's products or services
- specifies buyer needs it seeks to satisfy
- identifies customer groups/markets to serve
- set firm apart from rivals
- clarifies the firm's business to stakeholders
- specifies its approach to pleasing customers
What is the primary difference between a firm's strategic vision and its mission? -
Answers - a strategic vision portrays a firm's aspirations for its FUTURE.
a mission describes the scope and purpose of its PRESENT business
Core values - Answers - the beliefs, traits, and behavioral norms that the firm's
personnel are expected to display in conducting the firm's business and pursuing its
strategic vision and mission
What are the four characteristics of objectives? - Answers - - specific
- quantifiable (measurable)
- challenging (motivating)
- deadline for achievement
How does a firm evaluate performance? - Answers - it decides whether the enterprise is
passing the three tests of a winning strategy
ANSWERS
Strategy - Answers - set of actions that managers take to out perform competitors and
achieve superior profitability
What are the three aspects of good strategy? - Answers - Analysis, formulation, and
implementation
Analysis - Answers - - businesses's environment and industry conditions
- firm's financial and competitive capabilities
Formulation - Answers - create a vision for the firm's future direction
Implementation - Answers - crafting an action plan and doing it
How do firms compete differently from rivals? - Answers - - do what they don't or do it
better
- do what they can't
- do things that attract customers and set it apart from competitors
- do what the firm must do and know what it must not do
Competitive advantage - Answers - provide buyers with superior value or offers product
at same value to rival, but lower cost to firm
Sustainable competitive advantage - Answers - basis for advantage persists despite
best efforts of competitors to match/surpass its advantage (ex: Apple)
Why do firms modify strategy? - Answers - - market conditions change
- advancing technology
- fresh moves of competitors
- shifting buyer needs
- emerging market opportunities
- new ideas for improving strategies
Business model - Answers - how a strategy will create value for the customer while
creating revenue to cover costs and create a profit
What are some common examples of business models? - Answers - - razor-razorblade
- subscription
- pay-as-you-go
- freemium
- wholesale
, - agency
- bundling
Why is executing and crafting a strategy important? - Answers - - prescription for doing
business
- roadmap to competitive advantage
- plan for pleasing customers
- long term-standout marketplace performance
What are the five stages of strategy making and execution process? - Answers - 1.
Develop a strategic vision, mission statement, and a set of core values.
2. Set objectives.
3. Craft a strategy
4. Execute the strategy
5. Evaluate performance and initiating corrective adjustments
Strategic vision - Answers - describes management's aspirations for the company's
future and the course and direction charted to achieve them
Mission statement - Answers - uses specific language to give the firm it's own unique
identity. "Who we are, what we do, why we are here."
What are examples of specific language used in a mission statement? - Answers - -
identify firm's products or services
- specifies buyer needs it seeks to satisfy
- identifies customer groups/markets to serve
- set firm apart from rivals
- clarifies the firm's business to stakeholders
- specifies its approach to pleasing customers
What is the primary difference between a firm's strategic vision and its mission? -
Answers - a strategic vision portrays a firm's aspirations for its FUTURE.
a mission describes the scope and purpose of its PRESENT business
Core values - Answers - the beliefs, traits, and behavioral norms that the firm's
personnel are expected to display in conducting the firm's business and pursuing its
strategic vision and mission
What are the four characteristics of objectives? - Answers - - specific
- quantifiable (measurable)
- challenging (motivating)
- deadline for achievement
How does a firm evaluate performance? - Answers - it decides whether the enterprise is
passing the three tests of a winning strategy
