AEM 2601 Key Words/Concepts Prelim 1 || Already Passed.
Successful Strategy correct answers Effective Implementation of the following:
(1) long-term, simple and shared objectives
(2) understanding competitive environment (3) objective appraisal and allocation of resources
Two Key Strategy Perspectives correct answers (1) Five Forces- objective is to establish STRONG POSITION and MAXIMIZE PROFIT
(2) Resource-Based View- objective is to establish SUSTAINABLE competitive advantage
Firm's Goals and Strategy correct answers (1) corporate strategy- which business should we be in?
(2) business strategy- how should we compete within a given business?
Business Strategy vs Corporate Strategy correct answers (1) Corporate strategy- industry attractiveness, which business should we be in?
(2) Business Strategy- Competitive Advantage- how should we compete
Business Strategy correct answers Cost vs Differentiation
Corporate Strategy correct answers (1) diversification
(2) vertical integration
Dyson School correct answers Goals- education, career development, undergrad business school,
research (non-profit), major at cornell
Rivalry- not intense (differentiation), intense on branding. enrollment and job placement
Rivals- other undergrad schools, other cornell majors, other reserach/land grant schools (SUNYs)
Why successful?- reputation, alumni network, history/land grant. peer quality, funding, location (ny), quality faculty, class sizes
spurious correlation correct answers an apparent but false relationship between two (or more) variables that is caused by some other variable
Life Time Fitness Reading (in class) correct answers - what data do you need?
- what measures/statistics might you analyze?
- how could you visually present the data?
linear regression vs causality correct answers correlation does NOT equal causal analysis
- either random assignment/a controlled experiment, or be aware of bias
evolution of strategic management correct answers financial budgeting-> corporate planning-
>emergence of strategic management-> the quest for competitive advantage-> adapting to turbulence step 1: financial budgeting correct answers -operational budgeting
- discounted cash flow (DFC) capital budgeting
step 2: corporate planning correct answers - corporate plans based on medium-term economic forecasts
step 3: emergence of strategic management correct answers - industry analysis and competitive positioning
step 4: the quest for competitive advantage correct answers - emphasis on resources and capabilities
- shareholder value maximization
- refocusing, outsourcing, delayering, cost cutting
step 5: adapting to turbulence correct answers - adapting to and exploiting digital technology - the quest for flexibility and strategic innovation
- strategic alliances
- social and environmental responsibility
Supernormal profit correct answers any profit above normal profit - also known as abnormal profit
economic rents correct answers financial gains garnered from an asset or capability that are in excess of the ordinary returns in that particular industry
efficient-market principle correct answers "in perfectly efficient markets, no firms realizes economic rents"
sources of economic rents correct answers (1) industry structure
(2) resource-based view (RBV)
Industry Structure correct answers - based on industrial organization economics
- premise that industry structure matters most
- some industries are more profitable than others
- rents due primarily to barriers to competition
resource-based view correct answers - reaction to industrial organization (IO) perspective
- premise that internal capabilities matter
- rents due to barriers to resource acquisition and imitation
- some firms are more profitable than others
Strategy as the link between firm environment correct answers (1) the firm
- goals and values
- resources and capabilities
- structure and systems
STRATEGY
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