SEVI 3013 EXAM QUESTIONS WITH
VERIFIED ANSWERS
First step in the strategic management process: - Answer-Define vision, mission, and
values
Vision: What is our purpose? What is our goal? - Answer-- Captures an organization's
purpose and aspirations.
- Instills a sense of purpose.
- Motivates and inspires managers and employees.
- Captures the heart and minds of key stakeholders.
- Is supported by management decisions, actions, strategic commitments.
Mission: How will we achieve our goals? - Answer-- Describes what the organization
does:
o Products and services its provides'.
o Market in which it will compete.
o Customers it intends to serve.
Values: - Answer-Principles to guide behavior as employees work to achieve the firm's
vision and fulfill its mission
- Can be used by employees at all levels.
- Helps deal with complexity and conflict.
- Applies to internal and external interactions.
Values must be lived by top management to be effective.
Firm's Vision vs. Mission - Answer-Vision --> What a firm wants to accomplish.
Mission --> How the vision will be achieved.
Why is Vision important: - Answer-- Helps employees find meaning in their work.
- Connects employees to something bigger than themselves.
- Allows employees to experience a greater sense of purpose.
Unique Strategic Planning Requires Trade-offs: - Answer-- Managers must make
conscious trade-offs:
o How to allocate resources?
o Which activities to pursue.
Example: the retail industry:
· Walmart: cost leader - big box outlet, low prices.
· Nordstrom: differentiator - professional salespeople, quality goods, luxury setting
, Competitive Parity: - Answer-Is achieved when two or more firms perform at the same
level.
Competitive Disadvantage: - Answer-A firm underperforms its rivals or the industry
average.
Sustainable Competitive Advantage: - Answer-- A firm can outperform its competitors or
the industry average over a prolonged period.
o Example: Apple
--> Sustainable competitive advantage over Samsung for over a decade.
Industry Effects - Answer-The underlying economic structure of the industry
Includes:
o Entry and Exit Barriers
o Number and Size of companies
Firm Effects - Answer-Managerial actions - and strategy
HAS THE GREATEST IMPACT ON A FIRM'S PERFORMANCE - Up to 55%
---> Compared to Industry Effects (Up to -20%) and Other Effects, such as Business
Cycle Effects and Unexplained Variance, with (Up to -25%)
Stakeholders - Answer-Organization, groups, or individuals who can affect - or are
affected - by a firm's actions.
External Stakeholders: - Answer-- Customers
- Suppliers
- Alliance Partners
- Creditors
- Unions
- Communities
- Governments
- Media
Internal Stakeholders: - Answer-- Employees
- Stockholders
- Board Members
Stakeholder Impact Analysis - Answer-Examines how a decision or action will impact
the various groups and individuals involved.
--> Different stakeholders have different needs.
Managers Must Consider 3 Stakeholder Attributes: - Answer-1) Power
VERIFIED ANSWERS
First step in the strategic management process: - Answer-Define vision, mission, and
values
Vision: What is our purpose? What is our goal? - Answer-- Captures an organization's
purpose and aspirations.
- Instills a sense of purpose.
- Motivates and inspires managers and employees.
- Captures the heart and minds of key stakeholders.
- Is supported by management decisions, actions, strategic commitments.
Mission: How will we achieve our goals? - Answer-- Describes what the organization
does:
o Products and services its provides'.
o Market in which it will compete.
o Customers it intends to serve.
Values: - Answer-Principles to guide behavior as employees work to achieve the firm's
vision and fulfill its mission
- Can be used by employees at all levels.
- Helps deal with complexity and conflict.
- Applies to internal and external interactions.
Values must be lived by top management to be effective.
Firm's Vision vs. Mission - Answer-Vision --> What a firm wants to accomplish.
Mission --> How the vision will be achieved.
Why is Vision important: - Answer-- Helps employees find meaning in their work.
- Connects employees to something bigger than themselves.
- Allows employees to experience a greater sense of purpose.
Unique Strategic Planning Requires Trade-offs: - Answer-- Managers must make
conscious trade-offs:
o How to allocate resources?
o Which activities to pursue.
Example: the retail industry:
· Walmart: cost leader - big box outlet, low prices.
· Nordstrom: differentiator - professional salespeople, quality goods, luxury setting
, Competitive Parity: - Answer-Is achieved when two or more firms perform at the same
level.
Competitive Disadvantage: - Answer-A firm underperforms its rivals or the industry
average.
Sustainable Competitive Advantage: - Answer-- A firm can outperform its competitors or
the industry average over a prolonged period.
o Example: Apple
--> Sustainable competitive advantage over Samsung for over a decade.
Industry Effects - Answer-The underlying economic structure of the industry
Includes:
o Entry and Exit Barriers
o Number and Size of companies
Firm Effects - Answer-Managerial actions - and strategy
HAS THE GREATEST IMPACT ON A FIRM'S PERFORMANCE - Up to 55%
---> Compared to Industry Effects (Up to -20%) and Other Effects, such as Business
Cycle Effects and Unexplained Variance, with (Up to -25%)
Stakeholders - Answer-Organization, groups, or individuals who can affect - or are
affected - by a firm's actions.
External Stakeholders: - Answer-- Customers
- Suppliers
- Alliance Partners
- Creditors
- Unions
- Communities
- Governments
- Media
Internal Stakeholders: - Answer-- Employees
- Stockholders
- Board Members
Stakeholder Impact Analysis - Answer-Examines how a decision or action will impact
the various groups and individuals involved.
--> Different stakeholders have different needs.
Managers Must Consider 3 Stakeholder Attributes: - Answer-1) Power
