MGMT 4900 EXAM 1 QUESTIONS & ANSWERS
What is the industrial organization model? - Answer -Above average returns are
determined largely by external characteristics
Focus on industry structure
Assume firms are homogeneous
Most firms competing in industry have similar strategies and resources
What is the resource based model? - Answer -Above average returns are determined
by internal characteristics
Focus on firms resources, capabilities, and competencies
Assume firms are heterogeneous
Resources may not be mobile across firms ie; human intelligence
Resources can lead to competitive advantage when they are valuable, rare, costly to
imitate, non substitutable
Who are an organizations stakeholders? - Answer -Stakeholders are individuals who
can affect, and are affected by the strategic outcomes achieved
Capital Market Stakeholder - Answer -Shareholders
Product Market Stakeholder - Answer -Customers
Organizational Market Stakeholder - Answer -Employees
Why is it important to study and understand the external environment of the firm? -
Answer -Must identify opportunities and threats
Demographic Segment - Answer -Population, age, structure, income
Economic segment - Answer -Inflation, interest, GDP
Technological segment - Answer -Product innovations, communication technology
Global segment - Answer -Global outsourcing, emerging global markets
Sociocultural - Answer -Workforce diversity, attitude about work
Political/Legal Segment - Answer -Tax laws, labor laws, antitrust laws
What are the implications of Porters 5 forces model for strategy making? - Answer -
Managers must position the company to defend against competitive forces
Be proactive
Threat of New Entrants - Answer -Barriers to entry:
What is the industrial organization model? - Answer -Above average returns are
determined largely by external characteristics
Focus on industry structure
Assume firms are homogeneous
Most firms competing in industry have similar strategies and resources
What is the resource based model? - Answer -Above average returns are determined
by internal characteristics
Focus on firms resources, capabilities, and competencies
Assume firms are heterogeneous
Resources may not be mobile across firms ie; human intelligence
Resources can lead to competitive advantage when they are valuable, rare, costly to
imitate, non substitutable
Who are an organizations stakeholders? - Answer -Stakeholders are individuals who
can affect, and are affected by the strategic outcomes achieved
Capital Market Stakeholder - Answer -Shareholders
Product Market Stakeholder - Answer -Customers
Organizational Market Stakeholder - Answer -Employees
Why is it important to study and understand the external environment of the firm? -
Answer -Must identify opportunities and threats
Demographic Segment - Answer -Population, age, structure, income
Economic segment - Answer -Inflation, interest, GDP
Technological segment - Answer -Product innovations, communication technology
Global segment - Answer -Global outsourcing, emerging global markets
Sociocultural - Answer -Workforce diversity, attitude about work
Political/Legal Segment - Answer -Tax laws, labor laws, antitrust laws
What are the implications of Porters 5 forces model for strategy making? - Answer -
Managers must position the company to defend against competitive forces
Be proactive
Threat of New Entrants - Answer -Barriers to entry:
