MHR 423 Midterm 1 Questions with
Verfied Answers
Strategic Management - ANSWERSfull set of analysis, decisions, and actions that a
firm make
Competitive
Advantage - ANSWERSbusiness edge or property that creates value for customers and
that competitors are unable to imitate or find too costly to imitate
A Successful Vision - ANSWERSwhat the firm wants to be and expects to achieve in
the future
reflects the firm's values and aspirations
most effect when development includes all stakeholder
An Effective Mission - ANSWERSspecifies the present business and businesses in
which the firm intends to compete and customers it intends to serve
has more concrete, near term focus on current product markets and customer's than
firm's vision
General Environment - ANSWERScomposed of dimensions in the broader society that
influences an industry and the firm within it
stakeholders - ANSWERSthe individuals and groups who can affect and are affected by
the strategic outcomes achieved and who have claims on the firm's performance
General Environment Characteristics - ANSWERSDemographic: population
characteristics (age, income, ethnicity, etc)
Economic: economic indicators (GDP, employment rate, interest rate, inflation,
currency)
Political/Legal: laws of federal, state, county, city (lobbying/PR)
Sociocultural: characteristics of the culture (values and norms)
Technological: destroy existing markets and create new ones
Global: globalization or barriers to it (protectionism, tariffs, embargos)
Physical
, Industry Environment - ANSWERSthe set of factors that directly influences a firm and its
competitive actions and responses
Porter's Five Forces - ANSWERS1. The Threat of new entrants
2. The power of suppliers
3. The power of buyers
4. The threat of substitutes
5. The intensity of competition
Industry - ANSWERSa group of firms producing products or services that satisfy the
same customer needs
Market - ANSWERSa place where individuals and firms trade goods or services -
generally by exchanging money
Goal of industry analysis - ANSWERSto determine how attractive/profitable an industry
is based on the 5 forces
Forces of an Attractive industry - ANSWERS1. high entry barriers = low threat of new
entrants
2. Weak power of buyers/suppliers
3. few substitutes
4. moderate competitor rivalry
--> opposite for unattractive
embeddness - ANSWERSneed to be embedded in external environment in order to
survive
resource dependence - ANSWERSneed resources from environment to survive
Avoid situations where BUYERS - ANSWERS1. buy a large portion of the industry's
output
2. purchase accounts for a large portion of revenue
3. buyers have low switching costs
4. buyers could integrate backwards
Avoid Situations where SUPPLIERS - ANSWERS1. are large and concentrated
2. sell critical goods to the industry firms' success
3. have no substitute for the supplier's product
4. industry firms are not important customers of the supplier
5. high switching costs for industry firms
6. suppliers could integrate forward
Five Forces for the CP Industry - ANSWERS1. Suppliers:
* not many inputs to the concentrate
* high bargaining power: can get the inputs for a variety of suppliers
Verfied Answers
Strategic Management - ANSWERSfull set of analysis, decisions, and actions that a
firm make
Competitive
Advantage - ANSWERSbusiness edge or property that creates value for customers and
that competitors are unable to imitate or find too costly to imitate
A Successful Vision - ANSWERSwhat the firm wants to be and expects to achieve in
the future
reflects the firm's values and aspirations
most effect when development includes all stakeholder
An Effective Mission - ANSWERSspecifies the present business and businesses in
which the firm intends to compete and customers it intends to serve
has more concrete, near term focus on current product markets and customer's than
firm's vision
General Environment - ANSWERScomposed of dimensions in the broader society that
influences an industry and the firm within it
stakeholders - ANSWERSthe individuals and groups who can affect and are affected by
the strategic outcomes achieved and who have claims on the firm's performance
General Environment Characteristics - ANSWERSDemographic: population
characteristics (age, income, ethnicity, etc)
Economic: economic indicators (GDP, employment rate, interest rate, inflation,
currency)
Political/Legal: laws of federal, state, county, city (lobbying/PR)
Sociocultural: characteristics of the culture (values and norms)
Technological: destroy existing markets and create new ones
Global: globalization or barriers to it (protectionism, tariffs, embargos)
Physical
, Industry Environment - ANSWERSthe set of factors that directly influences a firm and its
competitive actions and responses
Porter's Five Forces - ANSWERS1. The Threat of new entrants
2. The power of suppliers
3. The power of buyers
4. The threat of substitutes
5. The intensity of competition
Industry - ANSWERSa group of firms producing products or services that satisfy the
same customer needs
Market - ANSWERSa place where individuals and firms trade goods or services -
generally by exchanging money
Goal of industry analysis - ANSWERSto determine how attractive/profitable an industry
is based on the 5 forces
Forces of an Attractive industry - ANSWERS1. high entry barriers = low threat of new
entrants
2. Weak power of buyers/suppliers
3. few substitutes
4. moderate competitor rivalry
--> opposite for unattractive
embeddness - ANSWERSneed to be embedded in external environment in order to
survive
resource dependence - ANSWERSneed resources from environment to survive
Avoid situations where BUYERS - ANSWERS1. buy a large portion of the industry's
output
2. purchase accounts for a large portion of revenue
3. buyers have low switching costs
4. buyers could integrate backwards
Avoid Situations where SUPPLIERS - ANSWERS1. are large and concentrated
2. sell critical goods to the industry firms' success
3. have no substitute for the supplier's product
4. industry firms are not important customers of the supplier
5. high switching costs for industry firms
6. suppliers could integrate forward
Five Forces for the CP Industry - ANSWERS1. Suppliers:
* not many inputs to the concentrate
* high bargaining power: can get the inputs for a variety of suppliers
