Strategic Management Test One

Front 1

A Good Strategy consists of:

Back 1

Analysis, Formulation, and Implementation

Front 2

Diagnosis of the competitive advantage

Back 2

Analysis

Front 3

Guiding policy to address the competitive challenge

Back 3

Formulation

Front 4

Set of coherent actions to implement the firm's guiding policy

Back 4

Implementation

Front 5

Superior performance relative to other competitors in the same industry or the industry average

Back 5

Competitive Advantage

Front 6

Outperforming over a prolonged period

Back 6

Sustainable Competitive Advantage

Front 7

Trade-offs are required in ____ ____

Back 7

Strategic Positioning

Front 8

What strategy is not?

Back 8

Grandiose statements, failure to face competitive challenges, operational effectiveness, competitive benchmarking, or other tactical tools

Front 9

Determined primarily by two factors: industry effects and firm effects

Back 9

Firm Performance

Front 10

Firm performance attributed to the industry structure which a firm competes

Back 10

Industry Effects

Front 11

Firm performance attributed to the actions managers take

Back 11

Firm Effects

Front 12

There is an important relationship between _____ and ______

Back 12

Strategic management and role of business

Front 13

an integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage

Back 13

Stakeholder Strategy

Front 14

Concerned with how the firm exchange with various stakeholders to create and trade value

Back 14

Stakeholder Strategy

Front 15

Stakeholder Impact Analysis Levels?

Back 15

Power, Legitimacy, Urgency

Front 16

A decision tool with which managers can recognize, assess, and address the needs of difference stakeholders, allowing the firm to achieve competitive advantage while acting as a good corporate citizen

Back 16

Stakeholder Impact Analysis

Front 17

A framework that helps firms recognize and address the economic, legal, social, and philanthropic expectations that society has toward business.

Back 17

Corporate Social Responsibility (CSR)

Front 18

CSR has four components of responsibility:

Back 18

Economic, Legal, Ethical, and Philanthropic

Front 19

Process employed by strategic leaders to conceive and implement a strategy, which leads to sustainable competitive advantage

Back 19

Strategic Management process

Front 20

Executives’ use of power and influence to direct assets in the pursuit of an organization’s goal

Back 20

Strategic Leadership

Front 21

Aspiration of the firm that lays the foundation for its mission - “to” is a common word

Back 21

Vision

Front 22

What an organization does, including products, services, and which makes markets - “by” is a common word

Back 22

Mission

Front 23

_______ vision statements allow firms to adapt to changing environments

Back 23

Customer-oriented

Front 24

_______ vision statements are less flexible

Back 24

Product-oriented

Front 25

______ is a necessary condition to achieve competitive advantage

Back 25

Strategic flexibility

Front 26

_______ are ethical standards/norms that govern the behavior of individuals within a firm

Back 26

Values

Front 27

Values form a foundation for a firm’s ______ and _____

Back 27

vision and mission

Front 28

Values serve as the ______ to keep the company on track

Back 28

guardrails

Front 29

Where to compete (industry, markets, and geography)

Back 29

Corporate Strategy

Front 30

How to compete (cost leadership, differentiation, or integration)

Back 30

Business Strategy

Front 31

How to implement a business strategy

Back 31

Functional Strategy

Front 32

When strategizing for competitive advantage, managers rely on three different approaches. This order represents how these approaches were developed over time:

Back 32

Strategic Planning

Scenario Planning

Strategy as Planned Emergence

Front 33

Rational, top-down process aiding in programming for future success

Back 33

Top-Down Strategic Planning

Front 34

In top-down strategic planning, Information flows only one way: ______ and it has

_____ strategic intelligence and decision-making

Back 34

top-down; Centralized

Front 35

the behaviors and styles of executives that influence others to achieve the organization’s vision and mission

Back 35

Strategic Leadership

Front 36

impact firm performance as do leaders whose decisions lead to huge destruction of shareholder wealth and jobs.

Back 36

Strategic Leaders

Front 37

Managers envision different ______ to anticipate plausible futures.

Back 37

what-if scenarios

Front 38

Scenario planning takes place at both the ______ and ______ levels of strategy.

Back 38

corporate and business

Front 39

Scenario Planning addresses both _____ and _____ futures

Back 39

optimistic and pessimistic

Front 40

Critics of top-down and scenario planning argue that strategic planning is not the same as ________.

Back 40

strategic thinking

Front 41

To create a powerful foundation for strategy formulation and implementation, the basis for gaining and sustaining a competitive advantage:

First, the firm needs an inspiring vision and mission backed up by ______.

Second, the firm needs an effective strategic _____.

Back 41

ethical values

management process

Front 42

In the PESTEL Framework, Managers mitigate threats and exploit opportunities by analyzing the ________

Back 42

external environmental forces

Front 43

In the PESTEL Framework, factors are ______

Back 43

independent

Front 44

_______ is the framework to scan, monitor, and evaluate important external factors/trends impacting a firm in its quest for competitive advantage.

Back 44

PESTEL Framework

Front 45

A group of (incumbent) firms that face the same set of suppliers and buyers

Back 45

Industry

Front 46

Identifies the industry's profit potential and derives implications for a firm’s strategic position within an industry

Back 46

Industry Analysis

Front 47

A firm’s ability to create value (V) for customers while containing costs (C)

Back 47

Strategic Position

Front 48

Competitive Advantage =

Back 48

a large value gap (V -C)

Front 49

_____ impact firm profitability

Back 49

Industry Forces

Front 50

A ______ industry makes sustainable competitive advantage easier, has high profit potential, and the five forces are weaker

Back 50

Attractive Industry

Front 51

A ______ industry makes sustainable competitive advantage harder, has low profit potential, and the five forces are stronger

Back 51

unattractive industry

Front 52

Incumbent firms can benefit from several important sources of entry barriers:

Back 52

Economies of scale

Network effects

Customer switching costs

Capital requirements

Advantages independent of size

Government policy

Credible threat of retaliation

Front 53

______ can demand higher prices for their inputs and captures part (sometimes a large part) of the economic value created.

Back 53

Powerful Suppliers

Front 54

Suppliers industry is concentrated.They don’t depend heavily on the incumbent’s industry.Incumbent firms face high switching costs.Suppliers’ products are differentiated.Limited substitutesSuppliers have credible forward integration threats. All these are signs of _______

Back 54

Strong Suppliers

Front 55

The bargaining power of _____ impacts industry profit potential

Back 55

buyers

Front 56

________ can demand a lower price or higher product quality and reduce industry profit potential:Through price discounts (limited revenue) Through increased quality / better service (higher costs) As they capture part of the economic value created

Back 56

Powerful Buyers

Front 57

The threat of ______ derives from products/services fulfilling the needs of current customers from outside the industry

Back 57

Substitutes

Front 58

The power of substitute are ____ when:Price-performance: Has an attractive trade-off. The buyer’s switching cost is low.

Back 58

high

Front 59

______ limit the price that industry competitors can charge for their products/services.

Back 59

Substitutes

Front 60

Which industry competitive structure has many small firms, firms are price takers, commodity product, and low entry barriers?

Back 60

Perfect Competition

Front 61

Which industry competitive structure has many firms, some pricing power, differentiated product, and medium entry barriers

Back 61

Monopolistic Competition

Front 62

Which industry competitive structure has few (large) firms, some pricing power, differentiated product, and high entry barriers?

Back 62

Oligopoly

Front 63

Which industry competitive structure has one firm, considerable pricing power, unique product, and very high entry barriers?

Back 63

Monopoly

Front 64

______ industry competitive structure has low profit potential

Back 64

fragmented

Front 65

_____ industry competitive structure has high profit potential

Back 65

Consolidated

Front 66

A product, service, or competency that adds value when used in tandem with the original product offering

Back 66

Complement

Front 67

A firm that provides a good/service that leads customers to value your firm's offering more when the two are combined

Back 67

Complementor

Front 68

Cooperation by competitors to achieve a strategic objective

Back 68

Co-opetition

Front 69

As consolidated industries tend to be more profitable than fragmented ones, firms tend to change their industry structures toward being more consolidated through ________

Back 69

(horizontal) mergers and acquisitions.

Front 70

Firms in the same ______ follow a similar strategy.

Back 70

strategic group

Front 71

Strategic group differences identify ______

Back 71

business-level strategies.

Front 72

______ competitors – same strategic group firms.

Back 72

Direct

Front 73

_______ rivalry exceeds inter-group rivalry:Rivalry among firms within a strategic group is more intense than the rivalry between strategic groups.

Back 73

Intra-group

Front 74

________ guiding consideration: How the external factors identified affect the firm’s industry environment

Back 74

PESTEL analysis

Front 75

_________ identifies industry profit potential and firm positioning for gaining and sustaining competitive advantage.

Back 75

Porter’s five forces model

Front 76

__________ helps to find performance differences within the focal industry.

Back 76

Strategic group map