WPC 480 MIDTERM QUESTIONS AND
SOLUTIONS GRADED A+
◉ Tactic.
Answer: An action or strategy carefully planned to achieve a specific
end
◉ Average Returns.
Answer: returns equal to those an investor expects to earn from
other investments with a similar amount of risk
◉ Hyper-competition.
Answer: describes competition that is excessive such that it creates
inherent instability
◉ What are two primary drivers of hyper competition?.
Answer: Emergence of a global economy and development of
technology.
◉ Global Competitive economy increases:.
Answer: Market volatility, globalized flow of financial capital,
strategic/operational complexity, need for
flexibility/speed/innovation, product standards
,◉ Global Competitive economy decreases:.
Answer: time to adapt to change, traditional sources of competitive
advantage, traditional managerial mindsets
◉ perpetual innovation.
Answer: describes rapidly and consistently new, information-
intensive technologies replace older ones
◉ liability of foreignness.
Answer: The inherent disadvantage that foreign firms experience in
host countries because of their non-native status
◉ external environment.
Answer: All relevant forces outside a firm's boundaries
◉ What is an I/O model.
Answer: Industrial organization view of strategy that assumes the
external environment determines what actions a firm can take.
◉ Resource mobility causes what two things.
Answer: short lived differences, similar strategy pursuits
, ◉ what is used to measure industry attractiveness?.
Answer: Average industry returns
◉ What example was used to understand the I/O Model?.
Answer: Nokia taken over by Motorola taken over by
Samsung/Apple
◉ What is the Five Forces Model.
Answer: Threat of new entrants, Substitute goods, Buyer power,
seller power, intensity of rivalry
◉ General environment.
Answer: firms can't control but can try to understand effects on
industry
◉ Industry environment.
Answer: factors and conditions influencing industry profitability
◉ competitor environment.
Answer: predicting what will be competitors' actions, responses and
intentions
SOLUTIONS GRADED A+
◉ Tactic.
Answer: An action or strategy carefully planned to achieve a specific
end
◉ Average Returns.
Answer: returns equal to those an investor expects to earn from
other investments with a similar amount of risk
◉ Hyper-competition.
Answer: describes competition that is excessive such that it creates
inherent instability
◉ What are two primary drivers of hyper competition?.
Answer: Emergence of a global economy and development of
technology.
◉ Global Competitive economy increases:.
Answer: Market volatility, globalized flow of financial capital,
strategic/operational complexity, need for
flexibility/speed/innovation, product standards
,◉ Global Competitive economy decreases:.
Answer: time to adapt to change, traditional sources of competitive
advantage, traditional managerial mindsets
◉ perpetual innovation.
Answer: describes rapidly and consistently new, information-
intensive technologies replace older ones
◉ liability of foreignness.
Answer: The inherent disadvantage that foreign firms experience in
host countries because of their non-native status
◉ external environment.
Answer: All relevant forces outside a firm's boundaries
◉ What is an I/O model.
Answer: Industrial organization view of strategy that assumes the
external environment determines what actions a firm can take.
◉ Resource mobility causes what two things.
Answer: short lived differences, similar strategy pursuits
, ◉ what is used to measure industry attractiveness?.
Answer: Average industry returns
◉ What example was used to understand the I/O Model?.
Answer: Nokia taken over by Motorola taken over by
Samsung/Apple
◉ What is the Five Forces Model.
Answer: Threat of new entrants, Substitute goods, Buyer power,
seller power, intensity of rivalry
◉ General environment.
Answer: firms can't control but can try to understand effects on
industry
◉ Industry environment.
Answer: factors and conditions influencing industry profitability
◉ competitor environment.
Answer: predicting what will be competitors' actions, responses and
intentions
