Comprehensive Business Policy and Strategy Exam Questions with Answers.
True or False: bad strategy is not the absence of strategy - Answers True
True or False: strategy is not what you hope your performance will be but it is about how you are gonna
get there - Answers true
What are the characteristics of a bad strategy - Answers 1. when it is all goals
2. when it is all fluff
3. when there is no problem
4. when it is dog's dinner
what is fluff - Answers -not falsifiable (you can have a logical counterargument)
-pulling equilibrium: the info you collect is not informative
-example: I want to be the best performer in the industry, we wanna grow 10%
-numbers are NOT strategic
-adjectives are NOT strategic
separating equilibrium - Answers the signal from the information helps you separate good and bad. Part
of good strategy
what is dog's dinner - Answers can't have everything under the sun
Survival and strategy - Answers 1. strategy is not about surviving or being average
2. survival does not give you a competitive advantage
3. survival is susceptible to external shock
staple good - Answers necessities, water, toilet paper
-priced inelastic
-demand does not change even if you increase the price
true or false: you are falling behind if you are trying to be average - Answers True
-the average is moving; your competitors aren't frozen
strategy - Answers coherent mix of policy and action designed to surmount a difficult high stakes
challenge
,the kernel of good strategy - Answers 3 components:
1. diagnosis
2. guiding policy
3. coherent action
if they are not all present you do not have a powerful strategy
Good Strategy - Answers 1. cultivate insight
2. create a proximate objective
3. chain links matter
4. expect entropy and inertia
5. requires organization slack
Strategic Management - Answers an integrative management field that combines analysis, formulation,
and implementation in the quest for competitive advantage
Mastery of strategic management enables you to: - Answers 1. View a firm in its entirety.
2. Think like a general manager.
3. Position your organization for superior performance.
integrative= - Answers draws on multiple disciplines
Strategy - Answers the set of goal-directed actions a firm takes to gain and sustain superior performance
relative to competitors
inputs - Answers (factor), go in, compete to get inputs
outputs - Answers (product), go out
why do we compete - Answers scarcity
true or false: you will not require personal experience to be a strategist - Answers true
A good strategy is based on 3 elements - Answers 1) A diagnosis of the competitive challenge.
•Analysis of the firm's internal and external environments.
2) A guiding policy to address the competitive challenge.
,•Formulation.
•Results in corporate, business and functional strategy.
3) A set of coherent actions to implement the firm's guiding policy.
Implementation.
diagnosis - Answers collecting information of value that gets you to a equilibrium
competitive advantage - Answers superior performance relative to other competitors in the same
industry or the industry average
-relative, not absolute
To assess competitive advantage, benchmark: - Answers 1) Compare the firm to competitors in the same
industry
2) Compare the firm to the industry average
true or false: in strategy we use ratios, not dollar number - Answers true
sustainable competitive advantage - Answers A firm that is able to outperform its competitors or the
industry average over a prolonged period of time
ex: apple (smartphone)
relative performance - Answers your performance-benchmark=0
-you don't have a competitive advantage bc you are average
competitive parity - Answers being the average, average performance=0
competitive disadvantage - Answers you performance-benchmark<0
competitive advantage - Answers your performance-benchmark>0
Competitive disadvantage pt 2 - Answers a firm that underperforms
-it rivals
-industry average
competitive parity pt 2 - Answers two or more firms that perform at the same level
How to gain competitive advantage - Answers provide goods or services that:
, consumers value more highly than those of its competitors, or
are similar to the competitors at lower price
rewards of superior value creation - Answers profitability and market share
elastic - Answers price drops, demand goes up
strategic positioning - Answers A unique position within an industry that allows the firm to provide value
to customers, while controlling costs.
economic contribution - Answers Value Creation -Costs
--The greater, the better
--Enhances the likelihood of competitive advantage
strategic positioning requires trade-offs - Answers Managers must make conscious trade-offs.
How to allocate resources?
Which activities to pursue?
a unique strategic position - Answers A successful combination of strategic activities
competitive advantage has to come from - Answers -performing different activities
-performing the same activities differently than rivals
what strategy is not - Answers 1. Grandiose statements "we will"
2. A failure to face a competitive challenge
3. Operational effectiveness, competitive benchmarking, or other tactical tools
value creation - Answers Companies with a good strategy are able to provide products or services to
consumers:
•At a price point that they can afford.
•That enables the company to make a profit.
value - Answers something desirable
True or False: bad strategy is not the absence of strategy - Answers True
True or False: strategy is not what you hope your performance will be but it is about how you are gonna
get there - Answers true
What are the characteristics of a bad strategy - Answers 1. when it is all goals
2. when it is all fluff
3. when there is no problem
4. when it is dog's dinner
what is fluff - Answers -not falsifiable (you can have a logical counterargument)
-pulling equilibrium: the info you collect is not informative
-example: I want to be the best performer in the industry, we wanna grow 10%
-numbers are NOT strategic
-adjectives are NOT strategic
separating equilibrium - Answers the signal from the information helps you separate good and bad. Part
of good strategy
what is dog's dinner - Answers can't have everything under the sun
Survival and strategy - Answers 1. strategy is not about surviving or being average
2. survival does not give you a competitive advantage
3. survival is susceptible to external shock
staple good - Answers necessities, water, toilet paper
-priced inelastic
-demand does not change even if you increase the price
true or false: you are falling behind if you are trying to be average - Answers True
-the average is moving; your competitors aren't frozen
strategy - Answers coherent mix of policy and action designed to surmount a difficult high stakes
challenge
,the kernel of good strategy - Answers 3 components:
1. diagnosis
2. guiding policy
3. coherent action
if they are not all present you do not have a powerful strategy
Good Strategy - Answers 1. cultivate insight
2. create a proximate objective
3. chain links matter
4. expect entropy and inertia
5. requires organization slack
Strategic Management - Answers an integrative management field that combines analysis, formulation,
and implementation in the quest for competitive advantage
Mastery of strategic management enables you to: - Answers 1. View a firm in its entirety.
2. Think like a general manager.
3. Position your organization for superior performance.
integrative= - Answers draws on multiple disciplines
Strategy - Answers the set of goal-directed actions a firm takes to gain and sustain superior performance
relative to competitors
inputs - Answers (factor), go in, compete to get inputs
outputs - Answers (product), go out
why do we compete - Answers scarcity
true or false: you will not require personal experience to be a strategist - Answers true
A good strategy is based on 3 elements - Answers 1) A diagnosis of the competitive challenge.
•Analysis of the firm's internal and external environments.
2) A guiding policy to address the competitive challenge.
,•Formulation.
•Results in corporate, business and functional strategy.
3) A set of coherent actions to implement the firm's guiding policy.
Implementation.
diagnosis - Answers collecting information of value that gets you to a equilibrium
competitive advantage - Answers superior performance relative to other competitors in the same
industry or the industry average
-relative, not absolute
To assess competitive advantage, benchmark: - Answers 1) Compare the firm to competitors in the same
industry
2) Compare the firm to the industry average
true or false: in strategy we use ratios, not dollar number - Answers true
sustainable competitive advantage - Answers A firm that is able to outperform its competitors or the
industry average over a prolonged period of time
ex: apple (smartphone)
relative performance - Answers your performance-benchmark=0
-you don't have a competitive advantage bc you are average
competitive parity - Answers being the average, average performance=0
competitive disadvantage - Answers you performance-benchmark<0
competitive advantage - Answers your performance-benchmark>0
Competitive disadvantage pt 2 - Answers a firm that underperforms
-it rivals
-industry average
competitive parity pt 2 - Answers two or more firms that perform at the same level
How to gain competitive advantage - Answers provide goods or services that:
, consumers value more highly than those of its competitors, or
are similar to the competitors at lower price
rewards of superior value creation - Answers profitability and market share
elastic - Answers price drops, demand goes up
strategic positioning - Answers A unique position within an industry that allows the firm to provide value
to customers, while controlling costs.
economic contribution - Answers Value Creation -Costs
--The greater, the better
--Enhances the likelihood of competitive advantage
strategic positioning requires trade-offs - Answers Managers must make conscious trade-offs.
How to allocate resources?
Which activities to pursue?
a unique strategic position - Answers A successful combination of strategic activities
competitive advantage has to come from - Answers -performing different activities
-performing the same activities differently than rivals
what strategy is not - Answers 1. Grandiose statements "we will"
2. A failure to face a competitive challenge
3. Operational effectiveness, competitive benchmarking, or other tactical tools
value creation - Answers Companies with a good strategy are able to provide products or services to
consumers:
•At a price point that they can afford.
•That enables the company to make a profit.
value - Answers something desirable
