MGM 399 EXAM 1 UPDATED QUESTIONS AND CORRECT ANSWERS

MGM 399 EXAM 1 UPDATED QUESTIONS AND
CORRECT ANSWERS

Question:
1. Strategy research
Answer:
How and why some firms outperform others?

Question:
2. Strategy
Answer:
A set of goal-directed actions a firm takes to gain and sustain superior performance (relative) to
competitors

Question:
3. What are the fundamental questions that need to be addressed to develop strategies
Answer:
- Where do firms compete
- What resources and capabilities do firms have?
- Who is in charge of using resources that a firm has

Question:
4. Analysis definition
Answer:
- A diagnosis of the competitive challenge and strength

Question:
5. Formulation definition
Answer:
- A guiding policy to address the competitive challenge and to maximize your strength

Question:
6. Implementation definition
Answer:
- A set of coherent actions to implement the firm's guiding policy

Question:
7. What does AFI stand for?
Answer:
- Analysis, formulation, implementation

Question:
8. Analysis

,Answer:
- Diagnosis of the competitive challenge
- Analysis of the firms internal and external environments

Question:
9. Formulation
Answer:
- Effective guiding policy to address the competitive challenge
- Firms corporate, business, and functional strategies
- Backed by strategic commitments o Investments o Changes

Question:
10. Competitive advantage
Answer:
- Superior performance (relative) to other competitors in the same industry or the industry average o
Always relative, not absolute
- Assess competitive advantage o Compare firm to competitors in the same industry o Compare firm to
industry average

Question:
11. Competitive disadvantage
Answer:
- Under performing its rivals or the industry average o Example: Is 15% ROIC superior? § Depends on the
industry § 20% ROIC is expected in the consulting industry
- Competitive parity o Performance of two or more firms at the same level

Question:
12. Strategic positioning
Answer:
- A unique position within an industry that allows the firm to provide value to customers, while controlling
costs
- Value-costs= economic contribution o The greater, the better

Question:
13. Strategic positioning requires trade-offs
Answer:
- Managers must make conscious trade-offs
- Example: retail industry o Walmart- Cost leader § Big box outlet/low prices o Nordstrom- Differentiator
§ Professional salespeople/luxury setting o Their customer segments overlap a little

Question:
14. The key to successful strategy
Answer:
- requires combining activities for a unique position in an industry

Question:
15. Competitive advantage has to come from:

, Answer:
- performing different activities or
- performing the same activities differently than rivals

Question:
16. Defining vision, mission, and values
Answer:
- the first step in gaining and sustaining a competitive advantage

Question:
17. Vision definition
Answer:
- organizational goals that evoke compelling mental images of a shared future o what do we want to
accomplish ultimately?

Question:
18. Mission definition
Answer:
- organizational goals that include the organization's current purpose o how do we accomplish our goals?

Question:
19. Values definition
Answer:
- organizational ethical standard

Question:
20. vision
Answer:
- an organization's aspiration
- the long-term objective
- forward looking and inspiring

Question:
21. mission
Answer:
- what an organization actually does
- how the vision is accomplished

Question:
22. values
Answer:
- organizational core values o ethical standards and norms

Question:
23. Q1: ___________ are best described as the ethical standards and norms that govern the behavior of
individuals with a firm