WPC 480 Capstone Midterm Questions With
Complete Solutions
average returns Equal to those an investor expects to earn from other investments with a
similar amount of risk
todays competitive markets 1. the global economy
2. globalization
3. rapid technological change
4. increasing importance of knowledge and people
global competitive landscape Increasing:
- market volatility and instability due to the rapid pace of change in markets
- blurring of market boundaries
- globalized flow of financial capital
- need for flexibility, speed, innovation, and integration in the use of technology
- strategic and operational complexity of global-scale competition
- rising product quality standards
Decreasing:
,WPC 480 Capstone Midterm Questions With
Complete Solutions
- traditional time for adapting to change
- traditional sources of competitive advantage
- traditional managerial mindset
strategic flexibility cope with fast moving markets, overcome organizational inertia
Firm Performance Determined primarily by two factors: favorable industry and specific
firm resources
IO Model Industrial Organization Model
- industry in which the firm chooses to compete will have a stronger influence on the firm's
performance than the choices made my managers
- how the firm will reach above-average returns
- environment-centric view of business performance
- nature v. NURTURE
- basis for Porter's Five Forces Model
example of competitive advantage erosion priceline- kayak, tripadvisor, cheap air
, WPC 480 Capstone Midterm Questions With
Complete Solutions
IO Model 1.) study external environment
2.) locate industry for high potential for above avg returns
3.) identify strategy
4.) develop and acquire skills and assets
5.) user firms strengths
Porter's Five Forces threat of entry, threat of substitute, supplier power, buyer power, and
competitive rivalry
Above average returns earned by produce same goods at lower costs (cost leadership)
produce different goods at a premium price (differentiation)
Resource Based Model -resource, capability (integrated set of resources) , and core
competence (source of competitive adv)
Capabilities become core competencies costly to imitate, rare, valuable, non substitutable
Complete Solutions
average returns Equal to those an investor expects to earn from other investments with a
similar amount of risk
todays competitive markets 1. the global economy
2. globalization
3. rapid technological change
4. increasing importance of knowledge and people
global competitive landscape Increasing:
- market volatility and instability due to the rapid pace of change in markets
- blurring of market boundaries
- globalized flow of financial capital
- need for flexibility, speed, innovation, and integration in the use of technology
- strategic and operational complexity of global-scale competition
- rising product quality standards
Decreasing:
,WPC 480 Capstone Midterm Questions With
Complete Solutions
- traditional time for adapting to change
- traditional sources of competitive advantage
- traditional managerial mindset
strategic flexibility cope with fast moving markets, overcome organizational inertia
Firm Performance Determined primarily by two factors: favorable industry and specific
firm resources
IO Model Industrial Organization Model
- industry in which the firm chooses to compete will have a stronger influence on the firm's
performance than the choices made my managers
- how the firm will reach above-average returns
- environment-centric view of business performance
- nature v. NURTURE
- basis for Porter's Five Forces Model
example of competitive advantage erosion priceline- kayak, tripadvisor, cheap air
, WPC 480 Capstone Midterm Questions With
Complete Solutions
IO Model 1.) study external environment
2.) locate industry for high potential for above avg returns
3.) identify strategy
4.) develop and acquire skills and assets
5.) user firms strengths
Porter's Five Forces threat of entry, threat of substitute, supplier power, buyer power, and
competitive rivalry
Above average returns earned by produce same goods at lower costs (cost leadership)
produce different goods at a premium price (differentiation)
Resource Based Model -resource, capability (integrated set of resources) , and core
competence (source of competitive adv)
Capabilities become core competencies costly to imitate, rare, valuable, non substitutable
