MGT 4394: Exam 2 Questions and
Already Passed Answers.
Mission - Answer The purpose of a company, why it exists.
Vision - Answer The aspiration of a company, what it wants to become or accomplish.
Broader than the mission. Usually begins with to.
Values - Answer The boundaries for accomplishing the Mission & Vision. How the company
will reach those items.
Industry Group - Answer All companies doing business within a broad product area.
Strategic Groups - Answer The closest rivals based on set criteria. Used to set the base level
strategy, ID the rivals for Porter's 5 forces, and drive competitive tactics.
Strategic Issue - Answer Identifies the issue blocking the Mission/Vision. Usually stated "How
does....in order to...."
Cost Leadership Strategy - Answer - Is either focused or broad
- Has the lowest cost
- Similar in value to competitors
- Has a low price or high margin
- Need Economies of Scale
Best Cost - Answer - Tries to balance both Cost Leadership & Differentiation
- Hard to Implement
The Differenetiation Strategy - Answer - Is either focused or broad
- More features
- Unique benefits
- Higher price
- Higher profits
The Cost Leadership Goal - Answer Reduce the firm's cost below its competitors
,The Differentiation Goal - Answer Creates unique features/benefits that increase the
perceived value of goods or srevices versus competitor
The Cost Leadership Tactic - Answer This offers adequate features for the price
The Differentiation Tactic - Answer This offers more benefits that consumers deem valuable
The Cost Leadership Resource Focus - Answer Optimizes process to maximize effiiency,
simplification for speed & high turnover
The Differenentiation Resource Focus - Answer User experience, marketing, customer
service, R&D/new products
The Cost Leadership Result - Answer A lower price for customers or higher profit for the firm
The Differentiation Result - Answer Higher prices and profits for the firm
The Cost Leadership Advantages - Answer - Better able to weather economic downturns,
inflation, and competitive challenges.
- Lower margins and higher costs to obtain EOS discourages competitors
The Differentiation Advantages - Answer - The customer loyalty to the brand.
- Fewer customers are needed to maintain margins.
- A higher barrier of entry due to cost to implement/support.
- Competitive advantage is usually sustainable
The Cost Leadership Disadvantages - Answer - Requires large customer volume and
production
- Economies of scale
- Simplified offering can limit flexibility to environmental changes
- Lack of research could cause firm to miss trends
- Reputation could suffer if perceived quality/value declines
The Differentiation Disadvantages - Answer - Increased R&D, manufacturing tools, and
employee training
- More items to maintain/plan making business processes more complex and vulnerable to
breakdown
, Narrow/Focused Generic Strategy - Answer Engaging a narrow target makret, not a narrow
product line
Amazon Go Generic Business Strategy - Answer A Focused Differentiation strategy
Amazon Corporate Strategy - Answer Broad Cost Leadership Strategy
Horizontal Diversification - Answer - Related
- Unrelated
- Geographic
Related Diversification - Answer - Similar product lines - adjacent segment
- Gains economies of scale
- Gains market power
Unrelated Diversification - Answer - Value creation comes mostly from secondary activities
- Gives better protection if one leg has a downturn
- Highest area of failure, especially with M&A
Geographic Diversification - Answer - Exporting successful business process/product
- Leverage global scale with suppliers
- Need to be aware of cultural differences
Vertical Diversification - Answer Acquisition of another company upstream (supplier) or
downstream (buyer) in the value chain of the same industry in which the corporation operates.
- Raw Material
- Manufacturing
- Distribution
- Retail
- After Sales Service
Backward Integration - Answer Buying or entering the supplier
- Distribution into manufacturing and raw materials
Already Passed Answers.
Mission - Answer The purpose of a company, why it exists.
Vision - Answer The aspiration of a company, what it wants to become or accomplish.
Broader than the mission. Usually begins with to.
Values - Answer The boundaries for accomplishing the Mission & Vision. How the company
will reach those items.
Industry Group - Answer All companies doing business within a broad product area.
Strategic Groups - Answer The closest rivals based on set criteria. Used to set the base level
strategy, ID the rivals for Porter's 5 forces, and drive competitive tactics.
Strategic Issue - Answer Identifies the issue blocking the Mission/Vision. Usually stated "How
does....in order to...."
Cost Leadership Strategy - Answer - Is either focused or broad
- Has the lowest cost
- Similar in value to competitors
- Has a low price or high margin
- Need Economies of Scale
Best Cost - Answer - Tries to balance both Cost Leadership & Differentiation
- Hard to Implement
The Differenetiation Strategy - Answer - Is either focused or broad
- More features
- Unique benefits
- Higher price
- Higher profits
The Cost Leadership Goal - Answer Reduce the firm's cost below its competitors
,The Differentiation Goal - Answer Creates unique features/benefits that increase the
perceived value of goods or srevices versus competitor
The Cost Leadership Tactic - Answer This offers adequate features for the price
The Differentiation Tactic - Answer This offers more benefits that consumers deem valuable
The Cost Leadership Resource Focus - Answer Optimizes process to maximize effiiency,
simplification for speed & high turnover
The Differenentiation Resource Focus - Answer User experience, marketing, customer
service, R&D/new products
The Cost Leadership Result - Answer A lower price for customers or higher profit for the firm
The Differentiation Result - Answer Higher prices and profits for the firm
The Cost Leadership Advantages - Answer - Better able to weather economic downturns,
inflation, and competitive challenges.
- Lower margins and higher costs to obtain EOS discourages competitors
The Differentiation Advantages - Answer - The customer loyalty to the brand.
- Fewer customers are needed to maintain margins.
- A higher barrier of entry due to cost to implement/support.
- Competitive advantage is usually sustainable
The Cost Leadership Disadvantages - Answer - Requires large customer volume and
production
- Economies of scale
- Simplified offering can limit flexibility to environmental changes
- Lack of research could cause firm to miss trends
- Reputation could suffer if perceived quality/value declines
The Differentiation Disadvantages - Answer - Increased R&D, manufacturing tools, and
employee training
- More items to maintain/plan making business processes more complex and vulnerable to
breakdown
, Narrow/Focused Generic Strategy - Answer Engaging a narrow target makret, not a narrow
product line
Amazon Go Generic Business Strategy - Answer A Focused Differentiation strategy
Amazon Corporate Strategy - Answer Broad Cost Leadership Strategy
Horizontal Diversification - Answer - Related
- Unrelated
- Geographic
Related Diversification - Answer - Similar product lines - adjacent segment
- Gains economies of scale
- Gains market power
Unrelated Diversification - Answer - Value creation comes mostly from secondary activities
- Gives better protection if one leg has a downturn
- Highest area of failure, especially with M&A
Geographic Diversification - Answer - Exporting successful business process/product
- Leverage global scale with suppliers
- Need to be aware of cultural differences
Vertical Diversification - Answer Acquisition of another company upstream (supplier) or
downstream (buyer) in the value chain of the same industry in which the corporation operates.
- Raw Material
- Manufacturing
- Distribution
- Retail
- After Sales Service
Backward Integration - Answer Buying or entering the supplier
- Distribution into manufacturing and raw materials
