MQM 385 Actual Questions and Correct Answers
Q1
1. Explain "sustainable competitive advantage" and its relationship to superior economic
returns.
Answer: The key definition of success is superior economic advantage. To achieve
ongoing superior economic performance, a firm has to create and maintain a
sustainable competitive advantage. Sustainable competitive advantages achieved by
implementing a value-creating strategy that cannot be easily duplicated by rivals
Q2
Discuss the Industrial Organization model of competitive advantage; what are the key
assumptions of the model and its causal mechanisms?
Answer: Assumptions: External environment imposes constraints on firms that affect
which strategies earn above average returns. Resource homogeneity and mobility
Content: Focus on external environment Industry analysis-Five forces model Process:
Above average returns result from competitive positioning within an industry Industry
analysis, resource/asset acquisition
Q3
Similarly, discuss the Resource-based model of competitive advantage; what are the key
assumptions of the model and its causal mechanisms?
Answer: Assumptions: Internal firm-specific resources and capabilities shape
strategies and determine above-average returns. Resource heterogeneity and
potential immobility Content: Focus on internal resources and capabilities Value chain
analysis- value-creation Process: Above average returns result from leveraging core
competencies and to gain competitive advantage Identifying and utilizing core
competencies
Q4
Describe and explain the three main levels of strategy, noting the different types of issues or
sources involved in value creation at each level.
Answer: Corporate Business Functional
, Q5
Corporate level
Answer: Additional value creation can occur if the individual parts of a firm are
integrated into a coherent whole. They key issue is the ability to identify and achieve
synergies between units/businesses. Corporate strategy is the way a company creates
value through the configuration and coordination of its multi-business activities.
Q6
Business Level
Answer: A firm generates superior returns by gaining a competitive advantage over its
rivals. The ability to gain and sustain a competitive advantage is a function of firm's
ability to create unique/superior value for the end-user. is the way a company seeks to
gain a competitive advantage through a combination of competitive positioning within
its industry and leveraging its core competencies.
Q7
Functional Level
Answer: There is little in the way of true value creation Functional strategies are those
focused sets of coordinated activities that are means of implementing a firm's
business-level strategy
Q8
Mission
Answer: A formal statement of the firm's unique purpose and the scope of its
operations and it is its reason for existence.
Q9
Define "core competencies"; explain where they come from and how to identify them.
Answer: R/C that serve as a source of CA come from bundles of R/C consistently adding
unique/value to end cust. not what u do best but what u do BETTER than everyone else
IDed by the value chain analysis as well as VRIN
Q10
Explain the value chain, noting the differences between primary and support activities and how
they are involved in the value creation process.
Answer: sequence of events involved in creating value Primary: activities that the firm
must emulate support: activities that help perform the primary activities
Q1
1. Explain "sustainable competitive advantage" and its relationship to superior economic
returns.
Answer: The key definition of success is superior economic advantage. To achieve
ongoing superior economic performance, a firm has to create and maintain a
sustainable competitive advantage. Sustainable competitive advantages achieved by
implementing a value-creating strategy that cannot be easily duplicated by rivals
Q2
Discuss the Industrial Organization model of competitive advantage; what are the key
assumptions of the model and its causal mechanisms?
Answer: Assumptions: External environment imposes constraints on firms that affect
which strategies earn above average returns. Resource homogeneity and mobility
Content: Focus on external environment Industry analysis-Five forces model Process:
Above average returns result from competitive positioning within an industry Industry
analysis, resource/asset acquisition
Q3
Similarly, discuss the Resource-based model of competitive advantage; what are the key
assumptions of the model and its causal mechanisms?
Answer: Assumptions: Internal firm-specific resources and capabilities shape
strategies and determine above-average returns. Resource heterogeneity and
potential immobility Content: Focus on internal resources and capabilities Value chain
analysis- value-creation Process: Above average returns result from leveraging core
competencies and to gain competitive advantage Identifying and utilizing core
competencies
Q4
Describe and explain the three main levels of strategy, noting the different types of issues or
sources involved in value creation at each level.
Answer: Corporate Business Functional
, Q5
Corporate level
Answer: Additional value creation can occur if the individual parts of a firm are
integrated into a coherent whole. They key issue is the ability to identify and achieve
synergies between units/businesses. Corporate strategy is the way a company creates
value through the configuration and coordination of its multi-business activities.
Q6
Business Level
Answer: A firm generates superior returns by gaining a competitive advantage over its
rivals. The ability to gain and sustain a competitive advantage is a function of firm's
ability to create unique/superior value for the end-user. is the way a company seeks to
gain a competitive advantage through a combination of competitive positioning within
its industry and leveraging its core competencies.
Q7
Functional Level
Answer: There is little in the way of true value creation Functional strategies are those
focused sets of coordinated activities that are means of implementing a firm's
business-level strategy
Q8
Mission
Answer: A formal statement of the firm's unique purpose and the scope of its
operations and it is its reason for existence.
Q9
Define "core competencies"; explain where they come from and how to identify them.
Answer: R/C that serve as a source of CA come from bundles of R/C consistently adding
unique/value to end cust. not what u do best but what u do BETTER than everyone else
IDed by the value chain analysis as well as VRIN
Q10
Explain the value chain, noting the differences between primary and support activities and how
they are involved in the value creation process.
Answer: sequence of events involved in creating value Primary: activities that the firm
must emulate support: activities that help perform the primary activities
