Business Strategy Game Exam 1 Practice Questions and Answers

Strategic CompetitivenessWhen a firm successfully formulates and implements a value-creating strategy. StrategyAn integrated and coordinated set of commitment and actions designed to exploit core competencies and gain a competitive advantage. Competitive AdvantageWhen a firm implements a strategy that its competitors are unable to duplicate or find too costly to try to imitate. RiskAn investor's uncertainty about the economic gains or losses that will result from a particular event. Average ReturnsReturns equal to those an investor expects to earn from other investments with a similar amount of risk. Above-average returnsReturns in excess of what an investor expects to earn from other investments with a similar amount. Strategic Management ProcessA full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness. Dominance of the External EnvironmentIndustry in which a firm competes has a stronger influence on the firm's performance that do the choices managers make inside their organizations. 4 Assumptions of the I/O ModelExternal environment imposes pressures and constraints that determine strategies leading to above average returns. Most firms competing in an industry control similar strategically relevant resources and pursue similar strategies. Resources used to implement strategies are highly mobile across firms. Organizational decision makers are assumed to be rational and committed to acting in the firm's best interest (Profit-Maximizing) A sustained or sustainable competitive advantage requires that:other companies not be able to duplicate the strategy. Investors in a company judge the adequacy of the returns on their investment in relation to:the returns on other investments of similar risk..