MGM 399 Exam 1 2026 Questions with Correct
Solutions
Operational Effectiveness alone is insufficient because...
this is a necessary thing if you want to outperform competitors in your market. Efficiency alone
is insufficient.
Trade-offs and 3 reasons for Trade-offs
More of one thing necessitates less of another.
-Inconsistencies in image or reputation
-Activities themselves
-Limits internal coordination and control
3 types of Fit
First-order fit: simple consistency between each activity and overall strategy
Second-order fit: occurs when activities are reinforcing
Third-order fit: goes beyond activity reinforcement to what is called optimization of effort
Does Tesla have a good strategy? What is it?
Tesla seems to be starting with a promising strategy and is in the process of gaining a
competitive advantage. Performing well and growth but underperforming when compared to
established car companies. Environmental friendly
What is a good strategy?
diagnosis of competitive challenge, guiding policy to address, set of coherent actions
,What is a vision statement?
about what the organization wants to accomplish; aspirations
What are aspects of an effective vision statement?
sense of winning and motivates employees at all levels to aim for the same target
Strategy is not...
Grandiose statements, failure to face a competitive challenge, & operational effectiveness
How vision statements help firms gain and sustain competitive advantage? Do they always?
This depends on if this is a customer-oriented vision statement or a product-oriented vision
statement
What is a product-oriented vision statement?
constrains the ability to allow companies to adapt to changing environments
What is a customer-oriented vision statement?
allows companies to adapt to changing environments
Provide AFI framework of Tesla
Analysis of Tesla: Diagnosis of competitive challenge
Formulation of Tesla: Guiding policy to address competitive challenge
Implementation of Tesla: Need economies of scale (increasing production levels)
What is competitive advantage?
superior performance relative to other competitors in the same industry or the industry average
, What is sustainable competitive advantage?
outperforming competitors or the industry average over a prolonged period of time
What are some key features of strategy?
to combine a set of activities to stake out a unique strategic position within industry
What are some cost drivers of competitive advantage?
Economies of scale, economies of scope, learning curve, low input costs, etc.
What are some value drivers of competitive advantage?
Technology, quality, delivery, geography, risk assumption, brand reputation, etc.
Explain levels of corporate strategy
decision making by top-management team which includes CEO, board of directors, senior
executives.
Explain level of business strategy
strategic choice of generic strategy (cost leadership, differentiation, focus) and benefits and costs
of first-mover advantages.
Explain level of functional strategy
directed at improving effectiveness of functional operations within a company like
manufacturing, materials management, HR, etc.
Black Swan events importance for business
Solutions
Operational Effectiveness alone is insufficient because...
this is a necessary thing if you want to outperform competitors in your market. Efficiency alone
is insufficient.
Trade-offs and 3 reasons for Trade-offs
More of one thing necessitates less of another.
-Inconsistencies in image or reputation
-Activities themselves
-Limits internal coordination and control
3 types of Fit
First-order fit: simple consistency between each activity and overall strategy
Second-order fit: occurs when activities are reinforcing
Third-order fit: goes beyond activity reinforcement to what is called optimization of effort
Does Tesla have a good strategy? What is it?
Tesla seems to be starting with a promising strategy and is in the process of gaining a
competitive advantage. Performing well and growth but underperforming when compared to
established car companies. Environmental friendly
What is a good strategy?
diagnosis of competitive challenge, guiding policy to address, set of coherent actions
,What is a vision statement?
about what the organization wants to accomplish; aspirations
What are aspects of an effective vision statement?
sense of winning and motivates employees at all levels to aim for the same target
Strategy is not...
Grandiose statements, failure to face a competitive challenge, & operational effectiveness
How vision statements help firms gain and sustain competitive advantage? Do they always?
This depends on if this is a customer-oriented vision statement or a product-oriented vision
statement
What is a product-oriented vision statement?
constrains the ability to allow companies to adapt to changing environments
What is a customer-oriented vision statement?
allows companies to adapt to changing environments
Provide AFI framework of Tesla
Analysis of Tesla: Diagnosis of competitive challenge
Formulation of Tesla: Guiding policy to address competitive challenge
Implementation of Tesla: Need economies of scale (increasing production levels)
What is competitive advantage?
superior performance relative to other competitors in the same industry or the industry average
, What is sustainable competitive advantage?
outperforming competitors or the industry average over a prolonged period of time
What are some key features of strategy?
to combine a set of activities to stake out a unique strategic position within industry
What are some cost drivers of competitive advantage?
Economies of scale, economies of scope, learning curve, low input costs, etc.
What are some value drivers of competitive advantage?
Technology, quality, delivery, geography, risk assumption, brand reputation, etc.
Explain levels of corporate strategy
decision making by top-management team which includes CEO, board of directors, senior
executives.
Explain level of business strategy
strategic choice of generic strategy (cost leadership, differentiation, focus) and benefits and costs
of first-mover advantages.
Explain level of functional strategy
directed at improving effectiveness of functional operations within a company like
manufacturing, materials management, HR, etc.
Black Swan events importance for business
