Strategic Test 1 (ch 1-3)
strategy - ANS an integrated and coordinated set of commitments and actions designed to
exploit core competencies and gain competitive advantage
competitive advantage - ANS by implementing a chosen strategy, it creates superior value for
customers and when competitors are not able to imitate the value the firm's products create or
find it too expensive to attempt imitation
above average returns - ANS returns in excess of what an investor expects to earn from other
investments with a similar amount of risk
risk - ANS an investors uncertainty about the economic gain or losses from a particular
investment
hypercompetition - ANS condition where competitors engage in intense rivalry, markets change
quickly and often, and entry barriers are low
Quality
Cost
Productivity
Product introduction time
Operational efficiency - ANS Globalization has led to higher performance standards with
respect to
1. Technology diffusion and disruptive technologies
2. The information age
3. Increasing knowledge intensity - ANS three categories of technology related trends and
conditions that affect today's firms:
strategic flexibility - ANS a set of capabilities firms use to respond to various demands and
opportunities existing in today's dynamic and uncertain competitive environment
I/O Model - ANS suggests that returns are influenced more so by the characteristics of the
external environment than a firm's unique internal resources and capabilities
Porter's 5 Forces - ANS Potential new entrants, buyer power, supplier power, threat of
substitutes, rivalry and competition.
20% - ANS according to the I/O model, external environment explains about what percentage
of the variance of profitability of firms
, resources - ANS inputs into a firm's production process, such as capital equipment, the skills of
individual employees, patents, finances, and talented managers
Resource-Based Model - ANS about the internal differences between firms affecting profitability
and competitive advantage
36% - ANS According to the resource based model, the internal resources explains what
percentage of profitability
Valuable
Rare
Costly to Imitate
Non-substitutable - ANS Foundation for competitive advantage (VRIN)
Stakeholder Model - ANS a theory of corporate responsibility that holds that management's
most important responsibility, long-term survival, is achieved by satisfying the interests of
multiple corporate stakeholders
primary stakeholders - ANS directly involved in value-creating process
secondary stakeholders - ANS can both influence and are influenced by what the firm does;
does not directly contribute value
Power/dependence - ANS higher power = less dependence on stakeholders
vision - ANS a picture of what the firm wants to be and, in broad terms, what it wants to
ultimately achieve
mission - ANS specifies the businesses in which the firm intends to compete and the customers
it intends to serve
strategic leaders - ANS people located in different areas and levels of the firm using the
strategic management process to select strategic actions that help the firm achieve its vision
and fulfill its mission
organizational culture - ANS the complete set of ideologies, symbols, and core values that
individuals throughout the firm share and that influence how the firm conducts business
1. Scanning
2. Monitoring
3. Forecasting
4. Assessing - ANS 4 parts of external environment analysis
strategy - ANS an integrated and coordinated set of commitments and actions designed to
exploit core competencies and gain competitive advantage
competitive advantage - ANS by implementing a chosen strategy, it creates superior value for
customers and when competitors are not able to imitate the value the firm's products create or
find it too expensive to attempt imitation
above average returns - ANS returns in excess of what an investor expects to earn from other
investments with a similar amount of risk
risk - ANS an investors uncertainty about the economic gain or losses from a particular
investment
hypercompetition - ANS condition where competitors engage in intense rivalry, markets change
quickly and often, and entry barriers are low
Quality
Cost
Productivity
Product introduction time
Operational efficiency - ANS Globalization has led to higher performance standards with
respect to
1. Technology diffusion and disruptive technologies
2. The information age
3. Increasing knowledge intensity - ANS three categories of technology related trends and
conditions that affect today's firms:
strategic flexibility - ANS a set of capabilities firms use to respond to various demands and
opportunities existing in today's dynamic and uncertain competitive environment
I/O Model - ANS suggests that returns are influenced more so by the characteristics of the
external environment than a firm's unique internal resources and capabilities
Porter's 5 Forces - ANS Potential new entrants, buyer power, supplier power, threat of
substitutes, rivalry and competition.
20% - ANS according to the I/O model, external environment explains about what percentage
of the variance of profitability of firms
, resources - ANS inputs into a firm's production process, such as capital equipment, the skills of
individual employees, patents, finances, and talented managers
Resource-Based Model - ANS about the internal differences between firms affecting profitability
and competitive advantage
36% - ANS According to the resource based model, the internal resources explains what
percentage of profitability
Valuable
Rare
Costly to Imitate
Non-substitutable - ANS Foundation for competitive advantage (VRIN)
Stakeholder Model - ANS a theory of corporate responsibility that holds that management's
most important responsibility, long-term survival, is achieved by satisfying the interests of
multiple corporate stakeholders
primary stakeholders - ANS directly involved in value-creating process
secondary stakeholders - ANS can both influence and are influenced by what the firm does;
does not directly contribute value
Power/dependence - ANS higher power = less dependence on stakeholders
vision - ANS a picture of what the firm wants to be and, in broad terms, what it wants to
ultimately achieve
mission - ANS specifies the businesses in which the firm intends to compete and the customers
it intends to serve
strategic leaders - ANS people located in different areas and levels of the firm using the
strategic management process to select strategic actions that help the firm achieve its vision
and fulfill its mission
organizational culture - ANS the complete set of ideologies, symbols, and core values that
individuals throughout the firm share and that influence how the firm conducts business
1. Scanning
2. Monitoring
3. Forecasting
4. Assessing - ANS 4 parts of external environment analysis
