question

a firm that achieves superior performance relative to other competitors in the same industry or the industry average

answer

competitive advantage

question

A firm that is able to outperform its competitors or the industry average over a prolonged period of time has a ________

answer

sustainable competitive advantage

question

performance of two or more firms at the same level

answer

competitive parity

question

strategic positioning requires _________

answer

tradeoffs

question

describe the underlying economic structure of the industry

answer

industry effects

question

attribute firm performance to the actions managers take

answer

firm effects

question

incidents that describe highly improbably but high impact events

answer

black swan events

question

organizations groups and individuals that can affect or be affected by a firm's actions

answer

stakeholders

question

An integrative approach to managing a diverse set of stakeholders effectively in order to gain and sustain competitive advantage; Allows firms to analyze and manage how various external and internal stakeholders interact to jointly create and trade value

answer

stakeholder strategy

question

3 attributes of stakeholders

answer

power, legitimacy, urgency

question

a framework that helps firms recognize and address the economic, legal, social, and philanthropic expectations that society has of the business enterprise at a give point in time

answer

corporate social responsibility (CSR)

question

AFI

answer

analyze, formulate, implement

question

A model that links three interdependent strategic management tasks—analyze, formulate, and implement—that together help managers plan and implement a strategy that can improve performance and result in competitive advantage

answer

AFI framework

question

first step to obtaining an effective strategy process

answer

define firm's vision, mission, and values

question

a ________ vision defines a business in terms of a good or service

answer

product-oriented

question

a ________ vision defines a business in terms of providing solutions to customer needs

answer

customer-oriented

question

ethical standards and norms that govern the behavior of individuals within a firm or organization

answer

organizational values

question

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

answer

strategic leadership

question

most effective way of management

answer

face to face

question

a conceptual framework that views organizations outcomes strategic choices and performance levels as reflections of the values of the members of the top management team

answer

upper echelons theory

question

level 5 leadership pyramid levels

answer

(1) highly capable individual (2) contributing team member (3) competent manager (4) effective leader (5) executive

question

according to the ________, it is the top management team that primarily determines whether a firm is able to gain and sustain a competitive advantage through the strategies they pursue

answer

upper-echelons theory

question

__________ concerns questions relating to where to compete (industry, markets, and geography)

answer

corporate strategy

question

____________ concerns the question of how to compete (cost leadership, differentiation, or integration)

answer

business strategy

question

__________ concerns the question of how to implement business strategy

answer

functional strategy

question

a standalone division of a larger conglomerate with its own profit and loss responsibility

answer

strategic business unit

question

rational top town process through which executives attempt to program future success

answer

top down strategic planning

question

strategy planning activity in which managers envision different what if scenarios to anticipate plausible futures

answer

scenario planning

question

unique strengths embedded deep within a firm

answer

core competencies

question

any assets such as cash, buildings, machinery or intellectual property that a company can draw on when crafting and executing a strategy

answer

resources

question

the organizational and managerial skills necessary to orchestrate a diverse set of resources and to deploy them strategically

answer

capabilities

question

distinct and fine-grained business processes such as order taking, the physical delivery of products or invoicing customers

answer

activities

question

provides a model that systematically aids in identifying core competencies Tangible resources have physical attributes and are visible (labor, capital, land, buildings, plant, equipment, and supplies)

answer

resource-based view (RBV)

question

bundles of resources, capabilities and competencies differ across firms

answer

resource heterogeneity

question

resources tend to be "sticky" and don't move easily from firm to firm. Because that stickiness, the resource differences that exist between firms are difficult to replicate and therefore can last for a long time

answer

resource immobility

question

a way to evaluate a firm's resource endowments and answer the question of what resource attributes underpin competitive advantage

answer

VRIO framework

question

VRIO

answer

valuable, rare, costly to imitate, organized to capture value

question

a resource is _______ if it helps a firm increase the perceived value its product or service in the eyes of the consumer either by adding attractive features or by lowering price because the resource helps the firm lower its costs

answer

valuable

question

a resource is ________ if only one or a few firms possess it. If the resource is common it will result in perfect competition where no firm is able to maintain a competitive advantage

answer

rare

question

if firms that do not have the resource are unable to develop or buy the resource at a reasonable price

answer

costly to imitate

question

having in place an effective organizational structure, process and systems to fully exploit the competitive potential of the firm's resources, capabilities, and competencies

answer

organized to capture value

question

4 conditions that protect competitive advantage to make it more difficult for competitors to imitate the resources, capabilities, or competencies that underlie its competitive advantage

answer

luck, path dependence, casual ambiguity, social complexity

question

describes a process in which the options one faces in a current situation are limited by decisions made in the past

answer

path dependence

question

describes a situation in which the cause and effect of a phenomenon are not readily apparent

answer

casual ambiguity

question

describes situations in which different social and business systems interact with one another

answer

social complexity

question

a model that emphasizes a firm's ability to modify and leverage its resource base in a way that enables it to gain and sustain competitive advantage in a constantly changing environment

answer

dynamic capabilities perspective

question

describe a firm's ability to create, deploy, modify, reconfigure, upgrade, or leverage its resources over time in its quest for competitive advantage

answer

dynamic capabilities

question

firm's current level or intangible resources

answer

resource stocks

question

the firm's level of investment to maintain or build a resource

answer

resource flows

question

descries the internal activities a firm engages in when transforming inputs into outputs. Each activity the firm performance along the horizontal chain adds incremental value—raw materials and other inputs are transformed into components that are finally assembled into finished products or services from the end consumer.

answer

value chain analysis

question

distinct actions that enable firms to add incremental value at each step by transforming input into goods and services (I.e. managing a supply chain, running the company's IT system)

answer

activities

question

allows managers to synthesize insights obtained form an internal analyses of the company's strengths and weaknesses (S and W) and those from an analysis of external opportunities and threats (O and T)

answer

SWOT analysis

question

SWOT

answer

strengths, weaknesses, opportunities, threats

question

3 components in assessing competitive advantage

answer

(1) accounting data (2) shareholder value (3) economic value

question

enable us to conduct direct performance comparisons between different companies. Some of the profitability ratios most commonly used are

answer

accounting data

question

individuals or organizations that own one or more shares of stock in a public company and are the legal owners of public companies

answer

shareholders

question

the difference between a buyers willingness to pay for a product or service and the firm's total cost to produce it

answer

economic value created (EVC)

question

Amount of total perceived consumer benefits equals the maximum ___________

answer

willingness to pay (WTP)

question

the dollar amount V a consumer would attach to a good or service the consumer's maximum willingness to pay sometimes also called reservation price

answer

value

question

the difference between the value a consumer attaches to a good or service and what he or she paid for P or V-P

answer

consumer surplus

question

strategy implementation tool that harnesses multiple internal and external performance metrics in order to balance financial and strategic goals

answer

balanced scorecard strategy

question

combination of economic, social, and economical concerns that can lead to a sustainable strategy

answer

triple bottom line

question

helps firms recognize and address society's expectations of the business enterprise at a given time

answer

corporate social responsibility

question

organizational plan that details the firm's competitive tactics and initiatives in short how the firm intends to make money

answer

business model

question

details the goal directed actions managers take in their quest for competitive advantage when competing in a single product market

answer

business level strategy

question

EVC = ?

answer

V-C

question

3 value drivers

answer

product features, customer service, complements

question

4 cost drivers

answer

cost of input factors, economies of scale, learning curve effects, experience curve effects

question

requires that tradeoffs between differentiation and low cost are reconciled

answer

integration strategy

question

Productivity frontier which is the value cost relationship that captures the result of performing best practices at any given time

answer

positioning

question

a framework that categorizes and analyzes an important set of external forces (political, economic, sociocultural, technological, ecological, and legal) that might impinge upon a firm. These forces are embedded in the global environment and can create both opportunities and threats for the firm

answer

PESTEL framework

question

PESTEL

answer

political, legal environment, economic, sociocultural, technological, ecological

question

a framework developed by Michael Porter that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy

answer

five forces model

question

a group of companies that more or less the same set of suppliers and buyers

answer

industry

question

a method to identify an industry's profit potential and derive implications for a firm's strategic position within an industry

answer

industry analysis

question

relates to its ability to create value for customers while containing the cost to do so.

answer

strategic position

question

the ________ the 5 forces the _______ the industry's profit potential making the industry less attractive for potential competitors

answer

stronger, lower

question

5 forces

answer

threat of entry, power of suppliers, power of buyers, threat of substitutes, rivalry among existing competitors

question

the risk that potential competitors will enter an industry

answer

threat of entry

question

obstacles that determine how easily a firm can enter an industry. Entry barriers are often one of the most significant predictors of industry profit potential

answer

entry barriers

question

centers around the key questions of where and how to compete. Business strategy concerns the question of how to compete in a single product market

answer

strategy formulation

question

the decisions that senior management makes and the goal-directed actions it takes to gain and sustain competitive advantage in several industrial and markets simultaneously addresses where to compete along three dimensions

answer

corporate strategy

question

3 dimensions along which firms compete

answer

(1) products and services (2) industry value chain (3) geography

question

a situation in which an agent performing activities on behalf of a principal pursues his or her own interests

answer

principal agent problem

question

3 alternatives to make or buy

answer

short term contracts, strategic alliances, long term contracts

question

the firm's ownership of its production of needed inputs or of the channels by which it distributes its outputs

answer

vertical integration

question

depiction of the transformation of raw materials into finished goods and services along distinct vertical stages each of which typically represents a distinct industry in which a number of different firms are competing

answer

industry value chain

question

changes in an industry value chain that involve moving ownership of activities upstream to the originating (inputs) point of the value chain

answer

backward

question

changes in an industry value chain that involve moving ownership of activities closer to the end point of the value chain

answer

forward

question

4 drawbacks to vertical integration

answer

increasing costs, reducing quality, reducing flexibility, increasing legal repurcussions

question

involved moving one or more internal value chain activities outside the firm's boundaries to other firms in the industry value chain

answer

strategic outsourcing

question

the joining of two independent companies to form a combined entity

answer

merger

question

the purchase or takeover of one company by another

answer

acquisition

question

concerns the number of activities a firm participates in up and down the industry value chain

answer

vertical integration

question

the process of merging with a competitor at the same stage of the industry value chain

answer

horizontal integration

question

3 benefits to horizontal integration

answer

reduction in competitive intensity, lower costs, increased differentiation

question

3 reasons to integrate

answer

access to new markets, access to new capability, preempt rivals

question

a form of self delusion in which managers convince themselves of their superior skills in the face of clear evidence to the contrary

answer

managerial hubris

question

voluntary arrangements between firms that involve the sharing of knowledge resources and capabilities with the intent of developing processes products or services

answer

strategic alliances

question

strategic management framework that proposes that critical resources and capability frequent are embedded in strategic alliances that span firm boundaries

answer

relational view of competitive advantage

question

provides guidance to managers about how to reconcile the economic imperative of gaining and sustaining competitive advantage with corporate social responsibility

answer

shared value creation framework

question

concerns the mechanisms to direct and control and enterprise in order to ensure that it pursues its strategic goals successfully and legal

answer

corporate governance

question

a theory that views the firm as a nexus of legal contracts

answer

agency theory

question

the centerpiece of corporate governance in such companies

answer

board of directors

question

a process driven by the perennial gale of creative destruction in the words of a famed economist Joseph Schumpter

answer

competition

question

industry life cycle

answer

introduction, growth, shakeout, maturity, decline

question

the positive effect (externality) that one user of a product or service as of that product for other users

answer

network effects

question

types of consumers

answer

technology enthusiasts/early adopters, chasm, early majority, late majority, laggards

question

types of innovation

answer

incremental v. radical, architectural v. disruptive

question

an innovation that squarely builds on an established knowledge base and a steadily improves an existing product or service offering targets existing markets by using existing technology

answer

incremental

question

an innovation that draws on novel methods or materials is derived either from an entirely different knowledge base or from a recombination of the existing knowledge bases with a new stream of knowledge or targets new markets by using new technologies

answer

radical

question

Innovate by existing technologies into new markets—doing so generally requires them to reconfigure the components of a technologies are reconfigured in a novel way to create new markets

answer

architectural

question

innovation leverages new technologies to attack existing markets. It invades an existing market from the bottom up

answer

disruptive

question

process of closer integration and exchange between different countries and peoples worldwide—made possible by falling trade and investment barriers, advances in telecommunications, and reductions in transportation costs

answer

globalization

question

a company that deploys resources and capabilities in the procurement, production, and distribution of goods and services in at least two countries

answer

multinational enterprises (MNEs)

question

3 advantages to expanding internationally

answer

larger markets, low-cost inputs, new competencies

question

3 disadvantages to expanding internationally

answer

liability of foreignness, loss of reputation, loss of intellectual property

question

a decision framework based on the relative distance between home and foreign target country along four dimensions: culture, administrative (government), geographic, and economic distances

answer

CAGE

question

MNEs face two opposing forces when competing around the globe: ______ and ______

answer

cost reductions, local responsiveness

question

consumer needs and preferences throughout the world are converging and this becoming increasingly homogenous

answer

globalization hypothesis

question

4 strategies to expanding internationally

answer

international, multi-domestic, global-standardization, transnational

question

essentially a strategy in which a company sells the same products or services in both domestic and foreign markets

answer

international

question

attempt to maximize local responsiveness, hoping that local consumers will perceive them to be domestic companies

answer

multi-domestic

question

attempt to reap significant economies of scale and location economies by pursuing a global division of labor based on wherever best of class capabilities reside at the lowest cost

answer

global-standardization

question

attempt to combine the benefits of localization strategy (high LR) with those of a global-standardization strategy

answer

transnational

question

assumption that geographic location alone should not lead to a firm-level competitive advantage because firms are now more than ever able to source inputs globally

answer

death of distance hypothesis

question

Factor conditions describe a country's endowments in terms of natural, human, and other resources

answer

porter's diamond framework

question

final piece of AFI framework that concerns the organization, coordination and integration of how work gets done. It is key to gaining and sustaining competitive advantage.

answer

strategic implementation

question

process of creating, implementing, monitoring, and modifying the structure, processes, and procedures of an organization

answer

organizational design

question

4 key components of organizational design

answer

specialization, formalization, centralization, hierarchy

question

________ organizations have a low degree of specialization and formalization—a flat organizational structure and decentralized decision making

answer

organic

question

___________ organizations are characterized by a high degree of specialization and formalization and a tall hierarchy that relies on centralized decision making

answer

mechanistic

question

4 types of structure

answer

simple, functional, multidivisional (M form), matrix

question

structure that generally small firms where the founders tend to make all the important strategic decision as well as run the day-to-day operations

answer

simple

question

structure groups employees into distinct functional areas based on domain expertise

answer

functional

question

cost leadership is ___ and ___ regarding structure

answer

mechanistic, centralized

question

differentiation is _____ regarding structrue

answer

organic

question

integration is ______ regarding structure

answer

the middle

question

consists of several distinct strategic business units each with its own profit-and-loss (P&L) responsibility

answer

M form

question

organization structure that combines the functional structure with the m-form

answer

matrix

question

describes the collectively shared values and norms of an organization

answer

organizational culture

question

strategic control and reward system that seek to define and direct employee behavior through a set of explicit, codified rules and standard operating procedures that are considered prior to the value creating activities

answer

input controls mechanism

question

a strategic control and reward system that seek to guide employee behavior by defining expected results (outputs) but leave the means to those results open to individual employees groups and SBUs

answer

output controls mechanism

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