BSM 600 FINAL EXAM UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

BSM 600 FINAL EXAM UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS

Question:
1. What is Strategy?
Answer:
A plan to gain and sustain competitive advantage

Question:
2. What is Competitive Advantage?
Answer:
Operating with an attribute or set of attributes that allows an organization to outperform its rivals

Question:
3. What is Sustainable Competitive Advantage?
Answer:
One that is difficult for competitors to imitate

Question:
4. What are Successful Strategies?
Answer:
1) Where to compete, or the attractiveness of a market or customer segment in the targeted markets
2) How to offer unique value relative to the competition in the targeted markets
3) What resources or capabilities are necessary to deliver that unique value
4) How to sustain a competitive advantage once it has been achieved

Question:
5. What is the Strategy Process?
Answer:
The process by which organizations formulate a plan and allocate resources to achieve competitive
advantage

Question:
6. Strategy Process Involves Four Strategic Choices...
Answer:
1) Markets to compete in;
2) Unique value the firm will offer in those markets;
3) The resources and capabilities required to offer that unique value better than competitors;
4) Ways to sustain the advantage by preventing imitation

Question:
7. What are the Two Perspectives on Strategy?
Answer:
1) The external (from industrial economics)
2) The internal (resource-based view)

,Question:
8. What is the External Strategy Perspective?
Answer:
A firm's profitability is partially dependent on the industry which it operates

Question:
9. What is the Internal Strategy Perspective?
Answer:
Profitability comes from the stock of resources and capabilities

Question:
10. What are Porter's Five Forces?
Answer:
1) Rivalry among existing competitors
2) Threat of new entrants
3) The threat of substitute products or services
4) The bargaining power of suppliers
5) The bargaining power of buyers

Question:
11. What is Rivalry? (In Relation to Porter's Five Forces)
Answer:
Competition among firms within an industry
Typically, this involves firms putting pressure on each other and limiting each other's profit potential by
attempting to steal profits and/or market share

Question:
12. What are Substitutes? (In Relation to Porter's Five Forces)
Answer:
A product that is fundamentally different yet serves the same function or purpose as another product

Question:
13. What are Threats? (In Relation to Porter's Five Forces)
Answer:
Conditions in the competitive environment that endanger the profitability of a firm

Question:
14. What are Opportunities? (In Relation to Porter's Five Forces)
Answer:
Ways of taking advantage of conditions in the environment to become more profitable

Question:
15. What is Attractiveness of the Industry? (In Relation to Porter's Five Forces)
Answer:
The degree to which an average firm in the industry can earn good profits

, Question:
16. What is Rivalry Among Competitors?
Answer:
The more competitors there are in the industry, the more likely that one or more of them will take action to
gain profits at the expense of others

Question:
17. What is a Fragmented Industry?
Answer:
An industry with a lot of competitors

Question:
18. What is a Concentrated Industry?
Answer:
An industry with far fewer competitors and tends to be dominated by a few large firms

Question:
19. Factors Involved in the Business Environment?
Answer:
- Economic
- Social
- Technological
- Environmental
- Competitive
- Global

Question:
20. Why Does Internal Analysis Matter?
Answer:
- Determines if its resources and capabilities are likely sources of competitive advantage
- Establishes strategies that will exploit any sources of competitive advantage
- Understanding internal dynamics is essential for effective decision-making
- Regular internal analysis facilitates ongoing performance evaluation
- Internal analysis helps organizations gauge their capacity for innovation and adaptability

Question:
21. What is the Resource-Based View?
Answer:
Assumes that a firm's resources and capabilities are the primary drivers of competitive advantage and
economic performance

Question:
22. Why was the Resource-Based View Developed?
Answer:
It was developed to answer the following question;
Why do some firms achieve better economic performance than others?