MBA 705 ERIN MCLAUGHLIN FINAL EXAM 2026

MBA 705 ERIN MCLAUGHLIN FINAL EXAM 2026 Strength-opportunity - "offensive" alternatives, utilize a strength to address an opportunity. Weaknesses-threat - "defensive" alternatives, eliminate or minimize a weakness in order to minimize the effect of a threat. Strength-threat - utilize a strength to minimize the effect of a threat. Weakness-opportunity - shore up a weakness to enable the organization to take advantage of an opportunity. Issues in strategy formulation – Strategic change: do the benefits outweigh the costs? Social responsibility and ethics: is the strategy compatible? What effect does the change in strategy have on existing resources? How will competitors respond when the change is implemented? Blue ocean strategy - a growth strategy contingent on inventing or discovering a new industry or industry segment that creates new demand. Gap analysis - identifies the distance between a firm's current position and its desired position with regard to an internal weakness. When possible, a firm should take action to close the gap, especially when it leaves a firm vulnerable to external threats. Value chain - helps a firm analyze its strengths and weaknesses, and understand how they might translate into competitive advantage or disadvantage. Strategic capabilities - the mechanism through which individuals in an organization coordinates efforts along one or more resources to solve a particular problem. Human resources issues – Board of directors: tenure, experience, and present level of investment Top managers, including the ceo: background, capabilities, experience Other managers & employees: effective hr planning, training & development, turnover, effective performance appraisal (pa) Organization issues - Consistency among corporate, business, and functional strategies Consistency between organizational strategies and the firm's mission/goals Consistency between the firm's strategies and its culture MBA 705 MBA 705 Consistency between the firm's strategies and its structure Relative position in the industry Physical resources issues – Currency of technology Quality and sophistication of distribution network Production capacity Reliable access to cost-effective sources of supplies Favorable location(s) Vrio framework - the resource-based framework that focuses on the value (v), rarity (r), imitability (i), and organizational (o) aspects of resources and capabilities. Only v- no comp advantage Only v+r - temporary comp adv Vri, potential for long term comp adv Vrio - sustainable long term comp Adv Pricing - low-cost businesses tend to emphasize low prices. Price is less of a concern to differentiated businesses. Promotion - low-cost businesses spend less on promotion and often emphasize price. Differentiated businesses highlight the uniqueness of their products or services. Product/service - low-cost businesses emphasize basic, no-frills products. Differentiated businesses seek to distinguish their products from the competition. Place (distribution) - low-cost businesses seek the most efficient means of distribution. Differentiated businesses may emphasize quality or speed of delivery. Current ratio - indicates how much of the current liabilities the current assets can cover; ordinarily 2:1 or better is desirable Quick ratio or acid test or liquidity test - indicates how rapidly a business can come up with cash on short notice. Not relevant for firms where inventory is almost immediately convertible to cash (e.g., mcdonald's). Asset turnover - measures how efficiently the company's total assets are being used to generate sales. Inventory turnover - indicates how many times inventory of finished goods is sold per year. Sales to working capital - measures how efficiently net working capital (current assets - current liabilities) is used to generate sales. MBA 705 MBA 705 Debt to assets ratio - indicates the percentage that borrowed funds are utilized to finance the assets of the firm. Debt to equity ratio - indicates the percentage of funds provided by creditors as compared with owners. Long term debt to equite - indicates the percentage of funds provided by long- term creditors as compared with owners. Gross profit margin - Measures Company’s efficiency during the production process. Substantial variations over time could suggest financial difficulties or possibly fraud. Return on assets - measures the return on total assets employed. Return on equity - measures a firm's profitability in comparison to the total amount of shareholder equity. Return on sales - indicates ratio of return on net sales. Experience curve - The reduction in per-unit costs that occurs as an organization gains over time. Reductions can come through organizational learning, economies of scale, or capital-labor substitutions. Organizational learning - occurs when employees become more efficient when they perform the same task many times. Economies of scale - to the reductions in per-unit costs as volume increases. Capital-labor substitution - refers to an organization's ability to substitute labor for capital, or vice versa as volume increases, depending on which combination minimizes costs and/or maximizes effectiveness. Business process reengineering - the analysis and redesign of workflow within and between enterprises - usually low-cost firms Total qulaity management (TQM) - quality control teams that are responsible for finding new and better ways to perform their jobs; they also must monitor and evaluate the quality of the goods they provide .}The totality of features and characteristics of a product or service that bear on its ability to satisfy customer needs. Differentiators usually invest more in product/service R&D, whereas cost leaders usually invest more in process R&D. - true Human capital - is the sum of the capabilities of individuals in an organization, and is a source of competitive advantage. According to the knowledge management MBA 705 perspective, people and their skills and abilities represent the only resource that cannot readily be reproduced by a firm's competitors. Industry life cycle – •introduction stage- emphasis on r&d •growth stage- emphasis on marketing •maturity stage- emphasis on production •decline stage- emphasis on financ