MGMT 399 Practice Questions with Correct
Solutions
Strategic Management
the integrative management field that combines analysis, formulation, and
implementation in the quest for competitive advantage.
Strategy
Set of goal-directed and integrate actions a firm takes to gain and sustain superior
performance relative to the competition.
Good Strategy
Enables a firm to achieve superior performance and sustainable competitive
advantage relative to competition.
1: A diagnosis to identify the competitive advantage
2: A guiding policy to address the advantage through strategy formulation
3: A set of coherent actions to implement the firm's guiding policy
What are the three components of a good strategy?
A good strategy must define an organization's competitive challenge through
a critical and honest assessment of the status quo.
,A good strategy provides a game plan for dealing with the competitive
challenge identified. The firm needs a guiding policy that clearly guides all
employees.
A good strategy requires effective implementation through a coherent and
consistent set of actions.
In review, to craft a winning strategy, three steps are crucial in the strategic
management process:
Competitive Advantage
Superior performance relative to other competitors in the same industry or the
industry average
Benchmark
The performance of other firms in the same industry
Sustainable Competitive Advantage
Situation that occurs when a firm outperforms its competitors or the industry
average over a prolonged period.
Competitive Disadvantage
Happens when a firm underperforms its rivals or the industry average.
, Competitive Party
Two or more firms perform at the same level.
A firm provides goods or services or services that consumers value more than
it's competitors offerings at a similar cost (differentiation strategy)
A firm furnishes goods and services similar to competitors but at a lower cost
(a cost leadership strategy)
Two distinct strategies form the basic for competitive advantage:
Grandiose statements (We will be no. 1)
Failure to face a competitive challenge
Tactical tools (AI, branding, skills)
Strategy is not:
Red Queen Effect
A situation in which everyone runs faster but there are no changes in relative
strategic positions. Usually results when a firm copies strategy efforts from the
competition to try and gain advantage (which fails).
Value Creation
Solutions
Strategic Management
the integrative management field that combines analysis, formulation, and
implementation in the quest for competitive advantage.
Strategy
Set of goal-directed and integrate actions a firm takes to gain and sustain superior
performance relative to the competition.
Good Strategy
Enables a firm to achieve superior performance and sustainable competitive
advantage relative to competition.
1: A diagnosis to identify the competitive advantage
2: A guiding policy to address the advantage through strategy formulation
3: A set of coherent actions to implement the firm's guiding policy
What are the three components of a good strategy?
A good strategy must define an organization's competitive challenge through
a critical and honest assessment of the status quo.
,A good strategy provides a game plan for dealing with the competitive
challenge identified. The firm needs a guiding policy that clearly guides all
employees.
A good strategy requires effective implementation through a coherent and
consistent set of actions.
In review, to craft a winning strategy, three steps are crucial in the strategic
management process:
Competitive Advantage
Superior performance relative to other competitors in the same industry or the
industry average
Benchmark
The performance of other firms in the same industry
Sustainable Competitive Advantage
Situation that occurs when a firm outperforms its competitors or the industry
average over a prolonged period.
Competitive Disadvantage
Happens when a firm underperforms its rivals or the industry average.
, Competitive Party
Two or more firms perform at the same level.
A firm provides goods or services or services that consumers value more than
it's competitors offerings at a similar cost (differentiation strategy)
A firm furnishes goods and services similar to competitors but at a lower cost
(a cost leadership strategy)
Two distinct strategies form the basic for competitive advantage:
Grandiose statements (We will be no. 1)
Failure to face a competitive challenge
Tactical tools (AI, branding, skills)
Strategy is not:
Red Queen Effect
A situation in which everyone runs faster but there are no changes in relative
strategic positions. Usually results when a firm copies strategy efforts from the
competition to try and gain advantage (which fails).
Value Creation
