strategy - Answer-a set of decisions made to achieve a competitive advantage
competitive advantage - Answer-the ability of a firm to outperform its competitors in financial measures
- can be measured with accounting profits or stock price
operational effectiveness - Answer-performing the sam...
BMGT 301 Exam 1 Questions with
Correct Answers
strategy - Answer-a set of decisions made to achieve a competitive advantage
competitive advantage - Answer-the ability of a firm to outperform its competitors in
financial measures
- can be measured with accounting profits or stock price
operational effectiveness - Answer-performing the same tasks better than rivals do
-lower cost
strategic planning - Answer-performing different tasks than your rivals or performing the
same tasks in a different way
-higher value/revenue
straddling - Answer-When a firm attempts to match the benefits of a success position
while maintaining its existing position.
Factors that lead to a sustainable competitive advantage - Answer--it positively affects
firm value (advantage)
-not too many competitors (competitive)
-can maintain it (sustainable)
e-business - Answer-the use of the internet to conduct and support day-to-day business
activities
how IT enables competitive advantages - Answer-1.1 be the first one there (first mover
advantage vs fast follower)
1.2 product differentiation
2. new pricing strategies
-price discrimination
3. lowering cost (cost leadership)
business drivers for today's information systems (4) - Answer-1. globalization of the
economy
2. electronic commerce and business
3. security and privacy
4. collaboration and partnership
2 types of product differentiation - Answer-1. vertical- build a better product, products
differ in quality
2. horizontal- position yourself in "product space" away from competitors, used to
appeal to a distinct group of customers
, resources - Answer-tangible and intangible assets of a firm
ex: brand, reputation, quality, patents
capabilities - Answer-a subset of resources that enable a firm to take full advantage of
other resources
ex: marketing skills, cooperative relationships
powerful resources - Answer-1. Imitation-Resistant Value Chains: Others find hard to
replicate
2. Brand: Proxy for quality and inspires trust
3. Scale: Advantages related to size; economies of scale
4. Switching Costs and Data: Costs consumer incur by switching providers
5. Differentiation: Be different; move away from being commoditized
6. Network Effects: When the value of a product or service increases as its number of
users expands.
7. Distribution Channels: The path through which products or services get to customers
8. Patents.
sources of switching costs - Answer-i. Learning costs--switching technologies may
require an investment in learning a new interface and new commands
ii. Information and data--users may have to reenter data, convert files or databases
iii. Financial commitment--can include investments in new equipment, the cost to
acquire any new software, consulting or expertise, and the devaluation of any
investment in prior technologies no longer used
iv. Contractual commitments--breaking contracts can lead to compensatory damages
and harm an organization's reputation as a reliable partner
v. Search costs
vi. Loyalty programs--switching can cause customers to lose out on program benefits
Resource-based view of sustainable competitive advantage - Answer-a firm achieves
SCA when its resources and capabilities are (VRIS):
-valuable
-rare
-not easily imitated
-not easily substitutable
Technology can play a key role in creating and reinforcing assets for sustainable
advantage. This includes: - Answer-a. Enabling an imitation resistant value chain
b. Strengthening a firm's brand
c. Collecting useful data
d. Establishing switching costs
e. Creating a network effect
f. Creating or enhancing a firm's scale advantage
g. Enabling product or service differentiation
h. Offering an opportunity to leverage unique distribution channels.
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