MGT 400 EXAM 1 STUDY GUIDE
Strategic Management - Answers --an integrative management field that combines
analysis, formulation, and implementation in the quest for competitive advantage
-enables you to view a firm in its entirety, think like a general manager, and position
your organization for superior performance
Competitive Advantage - Answers --superior performance relative to other competitors
in the same industry or the industry average
-always relative, not absolute
Competitive Parity - Answers -performance of two or more firms at the same level
Competitive Disadvantage - Answers --underperformance relative to other competitors
in the same industry or the industry average
Strategic Positioning - Answers --a unique position within an industry that allows the
firm to provide value to customers while controlling costs
-requires trade-offs
Leadership Pyramid - Answers -conceptual framework of leadership progression with
five distinct, sequential levels
Level 1: Highly Capable Individual
Level 2: Contributing Team Member
Level 3: Competent Manager
Level 4: Effective Leader
Level 5: Executive
Level 1: Highly Capable Individual - Answers -makes productive contributions through
motivation, talent, knowledge, and skills
Level 2: Contributing Team Member - Answers -uses high level of individual capability
to work effectively with others in order to achieve team objectives
Level 3: Competent Manager - Answers -efficient and effective in organizing resources
to accomplish stated goals and objectives
Level 4: Effective Leader - Answers -presents compelling vision and mission to guide
groups toward superior performance
Level 5: Executive - Answers -builds enduring greatness through a combination of
willpower and humility
Strategy Process - Answers --consists of strategy formulation and strategy
implementation
, -three levels: corporate strategy, business strategy, functional strategy
Corporate Strategy - Answers -concerns the question of where to compete in industry,
markets, and geography
Business Strategy - Answers -concerns the question of how to compete (cost
leadership, differentiation, value innovation)
Functional Strategy - Answers -concerns the questions of how to implement a chosen
business strategy
Intended Strategy - Answers -the outcome of a rational and structured top-down
strategic plan
Emergent Strategy - Answers --any unplanned strategic initiative
-bubbles up from the bottom of the organization
-can influence and shape a firm's overall strategy
Realized Strategy - Answers -combination of intended and emergent strategy
Strategic Commitments - Answers -decisions that are costly, have a long-term impact,
and are difficult to reverse
Example: spending billions of dollars building a new high-tech factory
External Factors - Answers -all the factors outside the firm that can affect its ability to
gain and sustain a competitive advantage
Macroeconomic Factors - Answers -includes growth rates, employment levels, interest
rates, price stability, currency exchange rates
-all can affect a firm's strategy
Competitive Industry Structure - Answers --elements and features common to all
industries, including the number and size of competitors, the firms' degree of pricing
power, the type of product or service offered, and the height of entry barriers.
-four main structures: perfect competition, monopolistic competition, oligopoly,
monopoly
Perfect Competition - Answers -fragmented, many small firms, a commodity product,
ease of entry, and little or no ability for each firm to raise its prices
Monopolistic Competition - Answers -many firms, a differentiated product, some
obstacles to entry, and the ability to raise prices
Oligopoly - Answers -consolidated, few large firms, differentiated products, high
barriers to entry, and some degree of pricing power
Strategic Management - Answers --an integrative management field that combines
analysis, formulation, and implementation in the quest for competitive advantage
-enables you to view a firm in its entirety, think like a general manager, and position
your organization for superior performance
Competitive Advantage - Answers --superior performance relative to other competitors
in the same industry or the industry average
-always relative, not absolute
Competitive Parity - Answers -performance of two or more firms at the same level
Competitive Disadvantage - Answers --underperformance relative to other competitors
in the same industry or the industry average
Strategic Positioning - Answers --a unique position within an industry that allows the
firm to provide value to customers while controlling costs
-requires trade-offs
Leadership Pyramid - Answers -conceptual framework of leadership progression with
five distinct, sequential levels
Level 1: Highly Capable Individual
Level 2: Contributing Team Member
Level 3: Competent Manager
Level 4: Effective Leader
Level 5: Executive
Level 1: Highly Capable Individual - Answers -makes productive contributions through
motivation, talent, knowledge, and skills
Level 2: Contributing Team Member - Answers -uses high level of individual capability
to work effectively with others in order to achieve team objectives
Level 3: Competent Manager - Answers -efficient and effective in organizing resources
to accomplish stated goals and objectives
Level 4: Effective Leader - Answers -presents compelling vision and mission to guide
groups toward superior performance
Level 5: Executive - Answers -builds enduring greatness through a combination of
willpower and humility
Strategy Process - Answers --consists of strategy formulation and strategy
implementation
, -three levels: corporate strategy, business strategy, functional strategy
Corporate Strategy - Answers -concerns the question of where to compete in industry,
markets, and geography
Business Strategy - Answers -concerns the question of how to compete (cost
leadership, differentiation, value innovation)
Functional Strategy - Answers -concerns the questions of how to implement a chosen
business strategy
Intended Strategy - Answers -the outcome of a rational and structured top-down
strategic plan
Emergent Strategy - Answers --any unplanned strategic initiative
-bubbles up from the bottom of the organization
-can influence and shape a firm's overall strategy
Realized Strategy - Answers -combination of intended and emergent strategy
Strategic Commitments - Answers -decisions that are costly, have a long-term impact,
and are difficult to reverse
Example: spending billions of dollars building a new high-tech factory
External Factors - Answers -all the factors outside the firm that can affect its ability to
gain and sustain a competitive advantage
Macroeconomic Factors - Answers -includes growth rates, employment levels, interest
rates, price stability, currency exchange rates
-all can affect a firm's strategy
Competitive Industry Structure - Answers --elements and features common to all
industries, including the number and size of competitors, the firms' degree of pricing
power, the type of product or service offered, and the height of entry barriers.
-four main structures: perfect competition, monopolistic competition, oligopoly,
monopoly
Perfect Competition - Answers -fragmented, many small firms, a commodity product,
ease of entry, and little or no ability for each firm to raise its prices
Monopolistic Competition - Answers -many firms, a differentiated product, some
obstacles to entry, and the ability to raise prices
Oligopoly - Answers -consolidated, few large firms, differentiated products, high
barriers to entry, and some degree of pricing power
