SEVI 3013 Exam 1 UPDATED Exam
Questions and CORRECT Answers
Strategy - CORRECT ANSWER - the set of decisions and actions of firm managers to ensure
the future success of the firm; integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
Characteristics of a strategy - CORRECT ANSWER - focuses on future and success
Corporate strategy - CORRECT ANSWER - What industries should we compete in?
Business strategy - CORRECT ANSWER - How should we compete in our chosen industries?
Global Economy - CORRECT ANSWER - economy in which goods, services, people, skills,
and ideas move freely across geographic borders
Technological diffusion - CORRECT ANSWER - speed at which new technologies become
available to firms and when firms choose to adopt them
Knowledge intensity - CORRECT ANSWER - consists of information, intelligence, and
expertise; basis of technology and its application
Stakeholders - CORRECT ANSWER - individuals/entities who may be affected by or affect
the firms outcomes
Strategic leaders - CORRECT ANSWER - people located in different levels of the firm to
select actions that help the firm achieve its vision and fulfill its mission; decisive and committed
to creating value
, Above average returns - CORRECT ANSWER - investors get yields that exceed what they
expect from other investments with similar risks
Key elements of Industrial Organizational (IO) model - CORRECT ANSWER - industry-
based, external environment, attractive industry, strategy formulation, assets and skills, strategy
implementation, superior returns
5 forces model - CORRECT ANSWER - threat of new entrants, rivalry among competing
firms, bargaining power of suppliers, bargaining power of buyers, threat of substitute products
Industry - CORRECT ANSWER - set of firms that produce similar products
Industry boundaries - CORRECT ANSWER - can change rapidly; helps executives determine
the arena in which their firm is competing
How strategic managers deal with changing industry boundaries - CORRECT ANSWER - be
willing to change your perception of industry and have multiple perceptions of your industry
Components of general environment - CORRECT ANSWER - ecological, economic, political,
sociocultural, legal, technological, global, demographic
Members of an industry - CORRECT ANSWER - industry and its buyers and suppliers
Suppliers of an industry - CORRECT ANSWER - set of firms that supplies raw materials to
the industry
5 Forces Model key objectives - CORRECT ANSWER - determines the future and current
profitability of the industry
Criticisms of IO model - CORRECT ANSWER - IO model makes the following assumptions
which are not realistic:
Questions and CORRECT Answers
Strategy - CORRECT ANSWER - the set of decisions and actions of firm managers to ensure
the future success of the firm; integrated and coordinated set of commitments and actions
designed to exploit core competencies and gain a competitive advantage
Characteristics of a strategy - CORRECT ANSWER - focuses on future and success
Corporate strategy - CORRECT ANSWER - What industries should we compete in?
Business strategy - CORRECT ANSWER - How should we compete in our chosen industries?
Global Economy - CORRECT ANSWER - economy in which goods, services, people, skills,
and ideas move freely across geographic borders
Technological diffusion - CORRECT ANSWER - speed at which new technologies become
available to firms and when firms choose to adopt them
Knowledge intensity - CORRECT ANSWER - consists of information, intelligence, and
expertise; basis of technology and its application
Stakeholders - CORRECT ANSWER - individuals/entities who may be affected by or affect
the firms outcomes
Strategic leaders - CORRECT ANSWER - people located in different levels of the firm to
select actions that help the firm achieve its vision and fulfill its mission; decisive and committed
to creating value
, Above average returns - CORRECT ANSWER - investors get yields that exceed what they
expect from other investments with similar risks
Key elements of Industrial Organizational (IO) model - CORRECT ANSWER - industry-
based, external environment, attractive industry, strategy formulation, assets and skills, strategy
implementation, superior returns
5 forces model - CORRECT ANSWER - threat of new entrants, rivalry among competing
firms, bargaining power of suppliers, bargaining power of buyers, threat of substitute products
Industry - CORRECT ANSWER - set of firms that produce similar products
Industry boundaries - CORRECT ANSWER - can change rapidly; helps executives determine
the arena in which their firm is competing
How strategic managers deal with changing industry boundaries - CORRECT ANSWER - be
willing to change your perception of industry and have multiple perceptions of your industry
Components of general environment - CORRECT ANSWER - ecological, economic, political,
sociocultural, legal, technological, global, demographic
Members of an industry - CORRECT ANSWER - industry and its buyers and suppliers
Suppliers of an industry - CORRECT ANSWER - set of firms that supplies raw materials to
the industry
5 Forces Model key objectives - CORRECT ANSWER - determines the future and current
profitability of the industry
Criticisms of IO model - CORRECT ANSWER - IO model makes the following assumptions
which are not realistic:
