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BUS 475 Exam 1 (A+ GRADED)
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BUS 475 Exam 1 (A+ GRADED)Delivering a unique value correct answers The base of a business strategy
-->the reason a firm wins with customers or the value proposition it offers to customers
-low cost advantage
OR
-differentiation advantage
Competitive Advantage & Profits correct answers requires that a firm consistently outperform its
rivals in generating above-average profits.
-->a firm has a competitive advantage when it can consistently generate above-average profits
through a strategy that competitors are unable to imitate or find too costly to imitate
Above-average profits
-->profit returns in excess of what an investor expects from other investments with a similar
amount of risk
Purpose of the Strategic Management Process correct answers to be able to identify the most
attractive business opportunities and to formulate/implement a strategy for achieving competitive
advantage
Components of the Strategic Management Process correct answers 1. Identity: Who we are
-Mission/Purpose
-Vision--> future
-Values--> right/wrong
2. External Analysis
-Macro
-Industry
-Customer
3. Internal Analysis
-Resources/Capabilities
VRIO
4. Strategic Choice
-LOB (Line of Business)--> Low Cost or Diff
Corporate: Which LOB next?
International
5. Implementation
-Structure
-Control Systems--> P&P, Compensation, Culture
6. Evaluation & Adjustment
-Other metrics
, BUS 475 Exam 1 (A+ GRADED)
-$
Levels of External Analysis correct answers Macro/General
-political
-economical
-sociological
-technological
Industry
-suppliers
-customers
-rivalry
-substitutes
-entry
Business Strategy's 4 Strategic Choices correct answers 1. Which markets the company will
pursue
2. What unique value to offer the customer in those markets
3. What resources and capabilities are required?
4. How the company will capture value and sustain a competitive advantage over time.
PEST Elements correct answers Political: influences from the actions of the government
-->when new laws are passed, they may alter the shape of an industry and influence the strategic
actions that firms might take
Economical: influences from the economic growth rate, interest rates, currency exchange rates,
and the rate of inflation or deflation
Social: influences from society's cultural values and norms, or attitudes
-->can create opportunities if a firm happens to be among the first to act on changes in values
and attitudes.
Technological: new products, processes or materials
-change the nature of rivalry in an industry by giving some firms an upper hand in gaining
market share
-can lower barriers to entry
PEST EXAMPLES correct answers Political:
Affordable Health Care Act mandates that health insurers cover everyone, including those with
preexisting conditions
-->may change the cost structure of the industry, potentially resulting in consolidation and less
rivalry
--> inefficient firms die out or are sold to more viable firms
Economical:
increase in levels of economic growth in some African countries
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