SEVI EXAM 1- 2 QUESTIONS & ANSWERS
what is Strategy? - Answer -set of goal-directed actions a firm take to sustain superior
performance relative to competitors (outcome of strategic management)
what are the 3 elements of a "good" strategy? - Answer -1. Diagnosis of competitive
strategy
2. guiding policy to address the challenge
3. set of coherent actions to implement policy
what is the competitive challenge exhibited by Tesla? - Answer --zero emission
vehicles that are attractive and affordable (affordable compared to gasoline is tough)
how did Tesla back up their competitive challenge with their guiding policy? - Answer -
policy: build cost competitive mass market vehicles which was backed by a strategic
commitment of investing in new battery plants called giga factories
what coherent actions did tesla set up to back up their guiding policy? - Answer -
retooling manufacturing faciility for cheaper mass production, gigafactories, not
introducing any new vehicles to focus on mass production of already released products
what are strategic commitments? - Answer --key to guiding policy
- significant investments resulting in fundamental changes to organizations structure
what is competitive parity? - Answer -performance of two or more firms at the same
level
what is an example a competitive parity? - Answer -Company A generating similar
income as company B (a competitor)
What is AFI Strategy Framework? - Answer -a model that links strategy analysis,
strategy formulation, strategy implementation, which helps managers plan and
implement a good strategy
what is the the main focus for the goal of a good strategy? - Answer -Creating superior
value while containing costs
What is strategic management? - Answer -integrative management field that combines
analysis, formulation, and implementation in the quest for competitive advantage
what increases firm's likelihood of gaining competitive advantage? - Answer -greater
economic contribution ( difference between value creation and cost)
how can core values impact employee behavior? - Answer -can serve as ethical
standards (moral compass) and norms to guide behavior and keep company on track
toward strategy
,what are the two main strategies for a competitive advantage? - Answer -1. higher
value same cost (product differentiation) 2. same value lower cost (cost differentiation)
how is strategic positioning formed? - Answer -trade-offs for value and cost
what is the Red Queen Effect? - Answer -in order to do better then competitors, you
have to make a step up not just trying to mimic successful actions or it will just spin in a
circle not make any ground
what is stakeholder power? - Answer -the capacity of the stakeholder to positively or
negatively affect the operations of the organization
what is stakeholder legitimacy? - Answer -claim is valid or appropriate
what is urgent claim for a stakeholder? - Answer -requires immediate company
attention and response
what is the main difference between stockholders and stakeholders? - Answer -
Stakeholders can be both internal and external (employees and customers) while
stockholders own shares of a firm and are classified as internal to the firm
which 3 important stakeholder attributes should mangers pay attention to in order to
better understand stakeholder impact analysis? - Answer -power, legitimacy, and
urgency
what are the steps of stakeholder impact analysis? - Answer -1. Who are our
shareholders 2. What are their interests and claims 3. what opportunities and threats do
stakeholders represent 4. what economic, legal, ethical and philanthropic
responsibilities do we have to our stakeholders? 5. what should we do to address
stakeholder concerns?
what is the pyramid of corporate social responsibility in order of first to last (bottom to
top) - Answer -Economic (gain and sustain competitive advantage) , Legal (laws and
regulation or minimum acceptable standard), Ethical (do what is right and just and fair),
Philanthropic (corporate citizenship)
which tool is good for determining competitors and crafting and implementing a strategy
for a competitive advantage? - Answer -AFI Framework
what are the 4 components of corporate social responsibility? - Answer -Economic,
Legal, Ethical, Philanthropic
How can superior performance of a company benefit society? - Answer -reinvesting
profits, growth in the market, providing more employment and career opportunities
, what are the benefits of a purpose-driven vision? - Answer -employee motivation,
intrinsic value, forward-looking statement
what goes into strategic intent? - Answer -development of core competencies
which type of perspective is better for employee problem solving? - Answer -customer-
oriented instead of product-oriented
what is an example of a customer-oriented statement? - Answer -Ford's Statement is to
"provide personal mobility for people around the world" - doesn't even mention
automobiles
when is there a positive relationship between vision statement and performance -
Answer -when it's customer oriented, internal stakeholders are invested in defining a
purpose-driven vision, organizational structures such as compensation systems align
with the firm's vision
what is the difference between a vision statement and a mission statement? - Answer -
vision statement explains the company goals and what the company wants to be while a
mission statement is the how and action embedded in a vision statement
what is an effect of the internet lowering barriers to entry in most industries? - Answer -
Threat of new entrants
what is perceptual acuity? - Answer -the ability to sense what is coming before the fog
clears
how could someone improve their perceptual acuity? - Answer --interacting with people
in the external environment, learning from previous mistakes, systemize those
conversations with other people to keep an inflow of conversation (CEO focus group)
what is a potential danger of forecasting? - Answer -managers may view uncertainty as
black and white while ignoring important grey areas
what is environmental forecasting? - Answer -the development of plausible projections
about the direction, scope, speed, and intensity of environmental change
when is buyer power greater? - Answer -when is is concentrated or when a buyer
group purchases large volume relative to seller sales // products purchased are
standard or undifferentiated // fewer switching costs // industry product is unimportant to
the quality of the buyer products or services
when is supplier power greater? - Answer --fewer firms in the industry
-no competition from subsitute products
-differentiated products and have switching costs
what is Strategy? - Answer -set of goal-directed actions a firm take to sustain superior
performance relative to competitors (outcome of strategic management)
what are the 3 elements of a "good" strategy? - Answer -1. Diagnosis of competitive
strategy
2. guiding policy to address the challenge
3. set of coherent actions to implement policy
what is the competitive challenge exhibited by Tesla? - Answer --zero emission
vehicles that are attractive and affordable (affordable compared to gasoline is tough)
how did Tesla back up their competitive challenge with their guiding policy? - Answer -
policy: build cost competitive mass market vehicles which was backed by a strategic
commitment of investing in new battery plants called giga factories
what coherent actions did tesla set up to back up their guiding policy? - Answer -
retooling manufacturing faciility for cheaper mass production, gigafactories, not
introducing any new vehicles to focus on mass production of already released products
what are strategic commitments? - Answer --key to guiding policy
- significant investments resulting in fundamental changes to organizations structure
what is competitive parity? - Answer -performance of two or more firms at the same
level
what is an example a competitive parity? - Answer -Company A generating similar
income as company B (a competitor)
What is AFI Strategy Framework? - Answer -a model that links strategy analysis,
strategy formulation, strategy implementation, which helps managers plan and
implement a good strategy
what is the the main focus for the goal of a good strategy? - Answer -Creating superior
value while containing costs
What is strategic management? - Answer -integrative management field that combines
analysis, formulation, and implementation in the quest for competitive advantage
what increases firm's likelihood of gaining competitive advantage? - Answer -greater
economic contribution ( difference between value creation and cost)
how can core values impact employee behavior? - Answer -can serve as ethical
standards (moral compass) and norms to guide behavior and keep company on track
toward strategy
,what are the two main strategies for a competitive advantage? - Answer -1. higher
value same cost (product differentiation) 2. same value lower cost (cost differentiation)
how is strategic positioning formed? - Answer -trade-offs for value and cost
what is the Red Queen Effect? - Answer -in order to do better then competitors, you
have to make a step up not just trying to mimic successful actions or it will just spin in a
circle not make any ground
what is stakeholder power? - Answer -the capacity of the stakeholder to positively or
negatively affect the operations of the organization
what is stakeholder legitimacy? - Answer -claim is valid or appropriate
what is urgent claim for a stakeholder? - Answer -requires immediate company
attention and response
what is the main difference between stockholders and stakeholders? - Answer -
Stakeholders can be both internal and external (employees and customers) while
stockholders own shares of a firm and are classified as internal to the firm
which 3 important stakeholder attributes should mangers pay attention to in order to
better understand stakeholder impact analysis? - Answer -power, legitimacy, and
urgency
what are the steps of stakeholder impact analysis? - Answer -1. Who are our
shareholders 2. What are their interests and claims 3. what opportunities and threats do
stakeholders represent 4. what economic, legal, ethical and philanthropic
responsibilities do we have to our stakeholders? 5. what should we do to address
stakeholder concerns?
what is the pyramid of corporate social responsibility in order of first to last (bottom to
top) - Answer -Economic (gain and sustain competitive advantage) , Legal (laws and
regulation or minimum acceptable standard), Ethical (do what is right and just and fair),
Philanthropic (corporate citizenship)
which tool is good for determining competitors and crafting and implementing a strategy
for a competitive advantage? - Answer -AFI Framework
what are the 4 components of corporate social responsibility? - Answer -Economic,
Legal, Ethical, Philanthropic
How can superior performance of a company benefit society? - Answer -reinvesting
profits, growth in the market, providing more employment and career opportunities
, what are the benefits of a purpose-driven vision? - Answer -employee motivation,
intrinsic value, forward-looking statement
what goes into strategic intent? - Answer -development of core competencies
which type of perspective is better for employee problem solving? - Answer -customer-
oriented instead of product-oriented
what is an example of a customer-oriented statement? - Answer -Ford's Statement is to
"provide personal mobility for people around the world" - doesn't even mention
automobiles
when is there a positive relationship between vision statement and performance -
Answer -when it's customer oriented, internal stakeholders are invested in defining a
purpose-driven vision, organizational structures such as compensation systems align
with the firm's vision
what is the difference between a vision statement and a mission statement? - Answer -
vision statement explains the company goals and what the company wants to be while a
mission statement is the how and action embedded in a vision statement
what is an effect of the internet lowering barriers to entry in most industries? - Answer -
Threat of new entrants
what is perceptual acuity? - Answer -the ability to sense what is coming before the fog
clears
how could someone improve their perceptual acuity? - Answer --interacting with people
in the external environment, learning from previous mistakes, systemize those
conversations with other people to keep an inflow of conversation (CEO focus group)
what is a potential danger of forecasting? - Answer -managers may view uncertainty as
black and white while ignoring important grey areas
what is environmental forecasting? - Answer -the development of plausible projections
about the direction, scope, speed, and intensity of environmental change
when is buyer power greater? - Answer -when is is concentrated or when a buyer
group purchases large volume relative to seller sales // products purchased are
standard or undifferentiated // fewer switching costs // industry product is unimportant to
the quality of the buyer products or services
when is supplier power greater? - Answer --fewer firms in the industry
-no competition from subsitute products
-differentiated products and have switching costs
