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Badm 449 Midterm 1 Questions & Detailed Answers 2024
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Badm 449 Midterm 1 Questions & Detailed Answers 2024
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Badm 449 Midterm 1 Questions & DetailedAnswers 2024
What is competitive advantage? - ANS Superior performance relative to
competitors
What is a sustainable competitive advantage? - ANS occurs when a firm
implements a value-creating strategy of which other companies are unable to
duplicate the benefits or find it too costly to imitate.
What is strategy? (3 items) - ANS - the quest to create, capture and sustain
competitive advantage.
- It is not a zero-sum game
Win - win scenarios = co-opetition (i.e., collaborative efforts among competitors
for mutual gain)
- Requires trade-offs for strategic positioning
(low cost) JCPenney vs. (upscale) Neiman Marcus
(low cost) Southwest Airlines vs. (stuck in the middle) Delta Song
What four elements are involved in the strategic management process? - ANS
Analysis, Formulation, Implementation, Feedback
Textbook def. of Strategy? - ANS - Goal-directed actions to gain & sustain
competitive advantage
,- It is about being different from your rivals.
- It is about creating value while containing cost.
- It is about deciding what to do, and what not to do.
- It combines a set of activities to stake out a unique position.
- It has alternatives, consequences, and choices involving significant resources,
typically made under some level of uncertainty.
- It requires long-term commitments that are not easily reversible.
3 key drivers of Economic Value? - ANS Revenue, Cost, and Risk Drivers
Provide some examples of value (revenue) drivers, and of cost drivers - ANS -
Value: Technology, Quality, Delivery
- Cost: Economies of Scale, Learning Curve
Discuss industry vs. firm effects, which tend to be stronger? - ANS -Astute
managers create superior performance, making important trade-offs
* Toyota's lean manufacturing
- Firm effects tend to be stronger
Discuss the industry and firm sources of superior profitability - ANS 1.) How do we
make money above the competitive level?
2.) INDUSTRY ATTRACTIVENESS- Which businesses should we be in? ----->
CORPORATE STRATEGY
, 2.) COMPETITIVE ADVANTAGE - How should we compete? ------> BUSINESS
STRATEGY
What is the key question for Corporate Strategy? - ANS Where to compete?
What is the key question for Business Strategy? - ANS How to compete?
What is the key question for Functional Strategy? - ANS How to implement?
Examples of corporate level strategy? - ANS Typically involves decision-making by
the top management team that includes the CEO, senior executives, the board of
directors, and the corporate staff. Decisions include vertical integration,
diversification, strategic alliances, acquisitions, new ventures, and restructuring.
Examples of business level strategy? - ANS Includes the strategic choice of generic
strategy (cost leadership, differentiation, focus) and the benefits and costs of first-
mover advantages. Often an enterprise participating in multiple businesses will
have different business strategies.
Examples of functional level strategy? - ANS Typically directed at improving the
effectiveness of functional operations within a company, such as manufacturing,
materials management, human resources, marketing, R&D and operations
management.
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