MBA 705 - Exam 1questions and
answers
Which of the following is not a cost advantage independent of scale?
A. proprietary technology
B. favorable locations
C. experience in the industry
D. high volume of production ✔✔D. A high volume of production creates
economies of scale and is therefore not independent of scale.
What is occurring when those who purchase an industry's goods and services
exercise great control over pricing and other terms?
A. a high bargaining power of suppliers.
B. a low bargaining power of suppliers.
C. a balance of power among suppliers.
D. none of the above ✔✔D. Higher bargaining power of buyers occurs when those
who purchase an industry's goods and services exercise great control over pricing
and other terms.Mission ✔✔is a broadly defined but enduring statement of
purpose that identifies the scope of an organization's operations and its offerings
to the various stakeholders
Strategy ✔✔refers to top management's plans to develop and sustain competitive
advantage so that the organization's mission is fulfilled.
,Competitive advantage ✔✔is a state whereby a firm's successful strategies cannot
be easily duplicated by its competitors. Maintaining a sustained competitive
advantage over time can be challenging.
sustained competitive advantage ✔✔A company's strategies enable it to maintain
above-average profitability for a number of years
Strategic Management ✔✔is of the environment in which the organization
operates prior to formulating a strategy, as well as the plan for implementation
and control of the strategy.
The Strategic Management Process ✔✔1. External Analysis
2. Internal Analysis
3. Strategy Formulation
4. Strategy Implementation
5. Strategic Control
External Analysis ✔✔Analyze the opportunities and threats, or constraints, that
exist in the organization's external environment, including industry and forces in
the external environment
Internal Anaylsis ✔✔Analyze the organization's strengths and weaknesses in its
internal environment. Consider the context of managerial ethics and corporate
social responsibility
,strategy formulation ✔✔Formulate strategies that build and sustain competitive
advantage by matching the organization's strengths and weaknesses with the
environment's opportunities and threats.
Strategic Implementation (Execution) ✔✔Implement the strategies that have been
developed.
Strategic Control ✔✔Measure success and make corrections when the strategies
are not producing the desired outcomes.
Business model ✔✔explains how the organization seeks to earn a profit by selling
its goods.
Progressive firms often devise innovative business models that extract revenue -
and ultimately profits - from sources not identified by competitors.
Five Characteristics of a Successful Strategy ✔✔1. Understand the competitive
environment.
2. Understand how resources translate into strengths and weaknesses.
3. The strategy is consistent with the mission and goals of the organization.
4. Plans for putting the strategy into action are designed before it is implemented.
5. Possible future changes (i.e., strategic control) are evaluated before the strategy
is adopted.
, Intended Strategy ✔✔what management originally plans.
may be realized just as it was planned, in a modified form, or even in an entirely
different form.
Realized Strategy ✔✔what management actually implements.
Hence, the original strategy may be realized with desirable or undesirable results,
or it may be modified as changes in the firm or the environment become known.
Gap between Intended and Realized ✔✔The gap between the intended and
realized strategies usually results from unforeseen environmental or
organizational events, better information that was not available when the strategy
was formulated, or an improvement in top management's ability to assess its
environment. Although it is important for managers to formulate responsible
strategies based on a realistic and thorough assessment of the firm and its
environment, things invariably change along the way. Hence, it is common for
such a gap to exist, creating the need for constant strategic action if a firm is to
stay on course. Instead of resisting modest strategic changes when new
information is discovered, managers should search for new information and be
willing to make such changes when necessary. This activity is part of strategic
control —the final step in the strategic management process.
Strategy as an Art ✔✔The lack of environmental predictability and the fast pace of
change render elaborate strategy planning as suspect at best.
answers
Which of the following is not a cost advantage independent of scale?
A. proprietary technology
B. favorable locations
C. experience in the industry
D. high volume of production ✔✔D. A high volume of production creates
economies of scale and is therefore not independent of scale.
What is occurring when those who purchase an industry's goods and services
exercise great control over pricing and other terms?
A. a high bargaining power of suppliers.
B. a low bargaining power of suppliers.
C. a balance of power among suppliers.
D. none of the above ✔✔D. Higher bargaining power of buyers occurs when those
who purchase an industry's goods and services exercise great control over pricing
and other terms.Mission ✔✔is a broadly defined but enduring statement of
purpose that identifies the scope of an organization's operations and its offerings
to the various stakeholders
Strategy ✔✔refers to top management's plans to develop and sustain competitive
advantage so that the organization's mission is fulfilled.
,Competitive advantage ✔✔is a state whereby a firm's successful strategies cannot
be easily duplicated by its competitors. Maintaining a sustained competitive
advantage over time can be challenging.
sustained competitive advantage ✔✔A company's strategies enable it to maintain
above-average profitability for a number of years
Strategic Management ✔✔is of the environment in which the organization
operates prior to formulating a strategy, as well as the plan for implementation
and control of the strategy.
The Strategic Management Process ✔✔1. External Analysis
2. Internal Analysis
3. Strategy Formulation
4. Strategy Implementation
5. Strategic Control
External Analysis ✔✔Analyze the opportunities and threats, or constraints, that
exist in the organization's external environment, including industry and forces in
the external environment
Internal Anaylsis ✔✔Analyze the organization's strengths and weaknesses in its
internal environment. Consider the context of managerial ethics and corporate
social responsibility
,strategy formulation ✔✔Formulate strategies that build and sustain competitive
advantage by matching the organization's strengths and weaknesses with the
environment's opportunities and threats.
Strategic Implementation (Execution) ✔✔Implement the strategies that have been
developed.
Strategic Control ✔✔Measure success and make corrections when the strategies
are not producing the desired outcomes.
Business model ✔✔explains how the organization seeks to earn a profit by selling
its goods.
Progressive firms often devise innovative business models that extract revenue -
and ultimately profits - from sources not identified by competitors.
Five Characteristics of a Successful Strategy ✔✔1. Understand the competitive
environment.
2. Understand how resources translate into strengths and weaknesses.
3. The strategy is consistent with the mission and goals of the organization.
4. Plans for putting the strategy into action are designed before it is implemented.
5. Possible future changes (i.e., strategic control) are evaluated before the strategy
is adopted.
, Intended Strategy ✔✔what management originally plans.
may be realized just as it was planned, in a modified form, or even in an entirely
different form.
Realized Strategy ✔✔what management actually implements.
Hence, the original strategy may be realized with desirable or undesirable results,
or it may be modified as changes in the firm or the environment become known.
Gap between Intended and Realized ✔✔The gap between the intended and
realized strategies usually results from unforeseen environmental or
organizational events, better information that was not available when the strategy
was formulated, or an improvement in top management's ability to assess its
environment. Although it is important for managers to formulate responsible
strategies based on a realistic and thorough assessment of the firm and its
environment, things invariably change along the way. Hence, it is common for
such a gap to exist, creating the need for constant strategic action if a firm is to
stay on course. Instead of resisting modest strategic changes when new
information is discovered, managers should search for new information and be
willing to make such changes when necessary. This activity is part of strategic
control —the final step in the strategic management process.
Strategy as an Art ✔✔The lack of environmental predictability and the fast pace of
change render elaborate strategy planning as suspect at best.
