WPC 480 MIDTERM COMPREHENSIVE STUDY
GUIDE WITH SOLUTIONS
◉ The Global competitive landscape.
Answer: Increasing:
-Market volatility and instability due to
the rapid pace of change in markets
-Globalized flow of financial capital
-Strategic and operational complexity
of global-scale competition
-Need for flexibility, speed, innovation,
and integration in the use of technology
-Rising product quality standards
Decreasing:
-Time for adapting to change
-Traditional sources of competitive advantage
-Traditional managerial mindset
◉ Technology and Technological Changes.
,Answer: Technology trends impacting the global competitive
environment
-Increasing rate of technology diffusion and the emergence
of disruptive technologies
-The information age: Internet and the global proliferation of low-
cost computing power
-Increasing knowledge intensity
as an intangible source of competitive advantage
◉ In order to cope with new marketplace....
Answer: Strategic Flexibility
-coping with the uncertainty and risks of hypercompetitive
environments.
-requires continuous learning and applying the new and updated
skills sets and competencies to the firm's competitive advantage.
--must overcome built-up organizational inertia.
◉ What is the marketplace like for today's firms?.
Answer: •A piece of it has moved online
•Globalization, firms were competing with local firms, now you're
competing with national firms
•Omni-channel
•More regulations trying to hold CEO's more accountable
,•Consumers are more demanding because there are so many other
options so they want better quality for cheaper price
•Pressure to innovate
-Hypercompetition
◉ Where do firm profits come from?.
Answer: o Sales revenue, brand recognition
o Firms that have something valuable internally make a lot of money
(resources, capabilities)
o The nature of the industry (some just picked an industry that just
isn't very profitable)
o Firm performance comes from
♣ 1. Industry (I/O, Porters 5 Forces)
♣ 2. Firm (e.g., Resource-Based Model)
◉ Can we model this?.
Answer: o Yes, the I/O Model = industry becomes homogeneous
◉ The I/O Model of Above Average Returns.
Answer: Model on pg. 15
, The External Environment --> An Attractive Industry --> Strategy
Formulation --> Assets and Skills --> Strategy Implementation -->
Superior Returns
◉ The external environment.
Answer: -The external environment imposes pressures and
constraints that determine strategic choices
--Similarity in resources causes competitors to pursue similar
strategies
--Resource differences among competitors are short-lived due to
resource mobility across firms
-Above average performance will be competed away quickly
--Industry attractiveness (average industry returns) is what matters
◉ Resources.
Answer: inputs into a firm's production process, such as capital
equipment, the skills of individual employees, patents, finances, and
talented managers.
◉ Capability.
Answer: capacity for a set of resources to perform a task or an
activity in an integrative manner
◉ Core competencies.
GUIDE WITH SOLUTIONS
◉ The Global competitive landscape.
Answer: Increasing:
-Market volatility and instability due to
the rapid pace of change in markets
-Globalized flow of financial capital
-Strategic and operational complexity
of global-scale competition
-Need for flexibility, speed, innovation,
and integration in the use of technology
-Rising product quality standards
Decreasing:
-Time for adapting to change
-Traditional sources of competitive advantage
-Traditional managerial mindset
◉ Technology and Technological Changes.
,Answer: Technology trends impacting the global competitive
environment
-Increasing rate of technology diffusion and the emergence
of disruptive technologies
-The information age: Internet and the global proliferation of low-
cost computing power
-Increasing knowledge intensity
as an intangible source of competitive advantage
◉ In order to cope with new marketplace....
Answer: Strategic Flexibility
-coping with the uncertainty and risks of hypercompetitive
environments.
-requires continuous learning and applying the new and updated
skills sets and competencies to the firm's competitive advantage.
--must overcome built-up organizational inertia.
◉ What is the marketplace like for today's firms?.
Answer: •A piece of it has moved online
•Globalization, firms were competing with local firms, now you're
competing with national firms
•Omni-channel
•More regulations trying to hold CEO's more accountable
,•Consumers are more demanding because there are so many other
options so they want better quality for cheaper price
•Pressure to innovate
-Hypercompetition
◉ Where do firm profits come from?.
Answer: o Sales revenue, brand recognition
o Firms that have something valuable internally make a lot of money
(resources, capabilities)
o The nature of the industry (some just picked an industry that just
isn't very profitable)
o Firm performance comes from
♣ 1. Industry (I/O, Porters 5 Forces)
♣ 2. Firm (e.g., Resource-Based Model)
◉ Can we model this?.
Answer: o Yes, the I/O Model = industry becomes homogeneous
◉ The I/O Model of Above Average Returns.
Answer: Model on pg. 15
, The External Environment --> An Attractive Industry --> Strategy
Formulation --> Assets and Skills --> Strategy Implementation -->
Superior Returns
◉ The external environment.
Answer: -The external environment imposes pressures and
constraints that determine strategic choices
--Similarity in resources causes competitors to pursue similar
strategies
--Resource differences among competitors are short-lived due to
resource mobility across firms
-Above average performance will be competed away quickly
--Industry attractiveness (average industry returns) is what matters
◉ Resources.
Answer: inputs into a firm's production process, such as capital
equipment, the skills of individual employees, patents, finances, and
talented managers.
◉ Capability.
Answer: capacity for a set of resources to perform a task or an
activity in an integrative manner
◉ Core competencies.
