MAN 4720 - DEVER/FSU - EXAM 1
QUESTIONS AND ANSWERS 100%
ACCURATE
Strategic Competitiveness - ANSWER-Achieved when a firm successfully formulates
and implements a value creating strategy
Strategy - ANSWER-an integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
Competitive advantage - ANSWER-implementation of a strategy that creates superior
value for customers and that the competitors are unable to duplicate or find it too costly
to try and imitate
Risk - ANSWER-is an investor's uncertainty about the economic gains or losses that will
result from a particular investment
above-average returns - ANSWER-are returns in excess of what an investor expects to
earn from other investments with a similar amount of risk
Average Returns - ANSWER-returns equal to those an investor expects to earn from
other investments with a similar amount of risk
Strategic Management Process Definition - ANSWER-The full set of commitments,
decisions, and actions required for a firm to achieve strategic competitiveness and earn
above-average returns.
Hypercompetition - ANSWER-competition that is excessive such that it creates inherent
instability and necessitates constant disruptive change for firms in the competitive
landscape.
It is a condition of rapidly escalating competition based on price-quality positioning,
competition to create new know-how and establish first-mover advantage, and
competition to protect or invade established product or geographic markets
Globalization - ANSWER-is the increasing economic interdependence among countries
and their organizations as reflected in the flow of goods and services, financial capital,
and knowledge across country borders.
- is a product of a large number of firms competing against one another in an increasing
number of global economies.
,Technology Diffusion - ANSWER-which is the speed at which new technologies become
available and are used, has increased substantially over the past 15 to 20 years.
Perpetual Innovation - ANSWER-describes how rapidly and consistently new,
information-intensive technologies replace older ones
Disruptive technologies - ANSWER-technologies that destroy the value of an existing
technology and create new markets
—surface frequently in today's competitive markets.
Information Age - ANSWER-a period in history where the production, distribution, and
control of information is the primary driver of the economy
Knowledge - ANSWER-a critical organizational resource and an increasingly valuable
source of competitive advantage.
- (information, intelligence, and expertise) is the basis of technology and its application.
strategic flexibility - ANSWER-a set of capabilities used to respond to various demands
and opportunities existing in a dynamic and uncertain competitive environment.
- to gain the competitive benefits of such flexibility, a firm has to develop the capacity to
learn.
Industrial Organization Model of Above-Average Returns - ANSWER-explains the
external environment's dominant influence on a firm's strategic actions.
- The model specifies that the industry in which a company chooses to compete has a
stronger influence on performance than do the choices managers make inside their
organizations.
I/O Model Assumptions - ANSWER-1. The external environment imposes pressures
and constraints that determine strategic choices.
2. Similarity in strategically relevant resources causes competitors to pursue similar
strategies.
3. Resource differences among competitors are short-lived due to resource mobility
across firms.
4. Strategic decision makers are rational and engage in profit-maximizing behaviors.
Five Forces Model of Competition - ANSWER-is an analytical tool used to help firms
find the industry that is the most attractive for them
The five forces model suggests that an industry's profitability is a function of interactions
among five forces:
,1. suppliers
2. buyers
3. competitive rivalry among firms currently in the industry
4. product substitutes
5. potential entrants to the industry.
The Resource-Based Model of Above-Average Returns - ANSWER-The model
assumes that each organization is a collection of unique resources and capabilities
The uniqueness of its resources and capabilities is the basis of a firm's strategy and its
ability to earn above-average returns.
What is a Resource? - ANSWER-are inputs into a firm's production process.
i.e. capital equipment, skills of employees, patents, finances, and talented managers.
What is a capability? - ANSWER-the capacity for a set of resources to perform a task or
an activity in an integrative manner
What is a Vision? - ANSWER-the picture of what a firm wants to be and, in broad terms,
what it wants to ultimately achieve.
Thus, a vision statement articulates the ideal description of an organization and gives
shape to its intended future.
In other words, a vision statement points the firm in the direction of where it would like to
be in the years to come.
What is a Mission? - ANSWER-specifies the businesses in which the firm intends to
compete and the customers it intends to serve.
- The firm's mission is more concrete than its vision.
- should establish a firm's individuality and should be inspiring and relevant to all
stakeholders.
Stakeholders - ANSWER-those who affect or are affected by a firms performance (i.e.
employees ,shareholders, managers)
Capital Market Stakeholders - ANSWER-Major suppliers of Capital and Shareholders
Product Market Stakeholders - ANSWER-the firm's primary customers, suppliers, host
communities (local gov, fed. Regulations placed through laws), and unions representing
the workforce
, Threat - ANSWER-is a condition in the general environment that may hinder a
company's efforts to achieve strategic competitiveness
Scanning - ANSWER-identifying early signals of environmental changes and trends
Monitoring - ANSWER-detecting meaning through ongoing observations of
environmental changes and trends
Forecasting - ANSWER-Developing projections of anticipated outcomes based on
monitored changes and trends
Assessing - ANSWER-Determining the timing and importance of environmental
changes and trends for firms' strategies and their management
Economic Environment - ANSWER-refers to the nature and direction of the economy in
which a firm competes or may compete.
Organizational Stakeholders - ANSWER--Employees—the firm's organizational
stakeholders
those groups, individuals, and organizations that are directly affected by the practices of
an organization and who therefore have a stake in its performance
Strategic Leaders - ANSWER-people located in different areas and levels of the firm
using the strategic management process to select strategic actions that help the firm
achieve its vision and fulfill its mission.
- are located at various levels throughout the firm.
- want the firm and its people to accomplish more.
- are innovative thinkers who promote innovation.
- can leverage relationships with external parties while simultaneously promoting
exploratory learning.
- have an ambicultural (global mindset) approach to management.
organizational culture - ANSWER-refers to the complex set of ideologies, symbols, and
core values that are shared throughout the firm and that influence how the firm conducts
business.
It is the social energy that drives—or fails to drive—the organization.
- Organizational culture also affects strategic leaders and their work. In turn, strategic
leaders' decisions and actions shape a firm's culture
external environment - ANSWER-Firms understand the external environment by
acquiring information about competitors, customers, and other stakeholders to build
their own base of knowledge and capabilities.
Three Major Parts of the External Environment
QUESTIONS AND ANSWERS 100%
ACCURATE
Strategic Competitiveness - ANSWER-Achieved when a firm successfully formulates
and implements a value creating strategy
Strategy - ANSWER-an integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
Competitive advantage - ANSWER-implementation of a strategy that creates superior
value for customers and that the competitors are unable to duplicate or find it too costly
to try and imitate
Risk - ANSWER-is an investor's uncertainty about the economic gains or losses that will
result from a particular investment
above-average returns - ANSWER-are returns in excess of what an investor expects to
earn from other investments with a similar amount of risk
Average Returns - ANSWER-returns equal to those an investor expects to earn from
other investments with a similar amount of risk
Strategic Management Process Definition - ANSWER-The full set of commitments,
decisions, and actions required for a firm to achieve strategic competitiveness and earn
above-average returns.
Hypercompetition - ANSWER-competition that is excessive such that it creates inherent
instability and necessitates constant disruptive change for firms in the competitive
landscape.
It is a condition of rapidly escalating competition based on price-quality positioning,
competition to create new know-how and establish first-mover advantage, and
competition to protect or invade established product or geographic markets
Globalization - ANSWER-is the increasing economic interdependence among countries
and their organizations as reflected in the flow of goods and services, financial capital,
and knowledge across country borders.
- is a product of a large number of firms competing against one another in an increasing
number of global economies.
,Technology Diffusion - ANSWER-which is the speed at which new technologies become
available and are used, has increased substantially over the past 15 to 20 years.
Perpetual Innovation - ANSWER-describes how rapidly and consistently new,
information-intensive technologies replace older ones
Disruptive technologies - ANSWER-technologies that destroy the value of an existing
technology and create new markets
—surface frequently in today's competitive markets.
Information Age - ANSWER-a period in history where the production, distribution, and
control of information is the primary driver of the economy
Knowledge - ANSWER-a critical organizational resource and an increasingly valuable
source of competitive advantage.
- (information, intelligence, and expertise) is the basis of technology and its application.
strategic flexibility - ANSWER-a set of capabilities used to respond to various demands
and opportunities existing in a dynamic and uncertain competitive environment.
- to gain the competitive benefits of such flexibility, a firm has to develop the capacity to
learn.
Industrial Organization Model of Above-Average Returns - ANSWER-explains the
external environment's dominant influence on a firm's strategic actions.
- The model specifies that the industry in which a company chooses to compete has a
stronger influence on performance than do the choices managers make inside their
organizations.
I/O Model Assumptions - ANSWER-1. The external environment imposes pressures
and constraints that determine strategic choices.
2. Similarity in strategically relevant resources causes competitors to pursue similar
strategies.
3. Resource differences among competitors are short-lived due to resource mobility
across firms.
4. Strategic decision makers are rational and engage in profit-maximizing behaviors.
Five Forces Model of Competition - ANSWER-is an analytical tool used to help firms
find the industry that is the most attractive for them
The five forces model suggests that an industry's profitability is a function of interactions
among five forces:
,1. suppliers
2. buyers
3. competitive rivalry among firms currently in the industry
4. product substitutes
5. potential entrants to the industry.
The Resource-Based Model of Above-Average Returns - ANSWER-The model
assumes that each organization is a collection of unique resources and capabilities
The uniqueness of its resources and capabilities is the basis of a firm's strategy and its
ability to earn above-average returns.
What is a Resource? - ANSWER-are inputs into a firm's production process.
i.e. capital equipment, skills of employees, patents, finances, and talented managers.
What is a capability? - ANSWER-the capacity for a set of resources to perform a task or
an activity in an integrative manner
What is a Vision? - ANSWER-the picture of what a firm wants to be and, in broad terms,
what it wants to ultimately achieve.
Thus, a vision statement articulates the ideal description of an organization and gives
shape to its intended future.
In other words, a vision statement points the firm in the direction of where it would like to
be in the years to come.
What is a Mission? - ANSWER-specifies the businesses in which the firm intends to
compete and the customers it intends to serve.
- The firm's mission is more concrete than its vision.
- should establish a firm's individuality and should be inspiring and relevant to all
stakeholders.
Stakeholders - ANSWER-those who affect or are affected by a firms performance (i.e.
employees ,shareholders, managers)
Capital Market Stakeholders - ANSWER-Major suppliers of Capital and Shareholders
Product Market Stakeholders - ANSWER-the firm's primary customers, suppliers, host
communities (local gov, fed. Regulations placed through laws), and unions representing
the workforce
, Threat - ANSWER-is a condition in the general environment that may hinder a
company's efforts to achieve strategic competitiveness
Scanning - ANSWER-identifying early signals of environmental changes and trends
Monitoring - ANSWER-detecting meaning through ongoing observations of
environmental changes and trends
Forecasting - ANSWER-Developing projections of anticipated outcomes based on
monitored changes and trends
Assessing - ANSWER-Determining the timing and importance of environmental
changes and trends for firms' strategies and their management
Economic Environment - ANSWER-refers to the nature and direction of the economy in
which a firm competes or may compete.
Organizational Stakeholders - ANSWER--Employees—the firm's organizational
stakeholders
those groups, individuals, and organizations that are directly affected by the practices of
an organization and who therefore have a stake in its performance
Strategic Leaders - ANSWER-people located in different areas and levels of the firm
using the strategic management process to select strategic actions that help the firm
achieve its vision and fulfill its mission.
- are located at various levels throughout the firm.
- want the firm and its people to accomplish more.
- are innovative thinkers who promote innovation.
- can leverage relationships with external parties while simultaneously promoting
exploratory learning.
- have an ambicultural (global mindset) approach to management.
organizational culture - ANSWER-refers to the complex set of ideologies, symbols, and
core values that are shared throughout the firm and that influence how the firm conducts
business.
It is the social energy that drives—or fails to drive—the organization.
- Organizational culture also affects strategic leaders and their work. In turn, strategic
leaders' decisions and actions shape a firm's culture
external environment - ANSWER-Firms understand the external environment by
acquiring information about competitors, customers, and other stakeholders to build
their own base of knowledge and capabilities.
Three Major Parts of the External Environment
