MGMT 441 Exam 1|59 Questions with Answers 2023
Strategy - CORRECT ANSWER A firms theory about how to gain competitive advantages
What strategies are
... [Show More] based on - CORRECT ANSWER *Accurate prediction / assumption about the competition in the industry.
*Systematic analysis of external environment and internal resources
Competitive Advantage - CORRECT ANSWER Creating more economic value than rival firms
Types of measures of Competitive Advantage - CORRECT ANSWER Accounting Ratios
Economic Measures
Economic Value - CORRECT ANSWER perceived benefits gained by customers of a product - total costs of the product
Willingness to Pay (WTP) - CORRECT ANSWER perceived benefits gained by customer from a product determines the consumer's ___________________
Profitability Ratios - CORRECT ANSWER RoA, RoS, RoE, profit margin, earnings per share
Liquidity ratios - CORRECT ANSWER Current ratio, Quick ratio
Leverage ratios - CORRECT ANSWER Debt to assets, debt to equity, assets to equity
Activity Ratios - CORRECT ANSWER Asset turnover, inventory turnover
Competitive Advantage Position - CORRECT ANSWER Above normal economic performance. Return > Costs of capital
Competitive Parity Position - CORRECT ANSWER Normal economic performance. Return = Costs of capital
Competitive Disadvantage Position - CORRECT ANSWER Below normal economic performance
The Strategic Management Process - CORRECT ANSWER A sequential set of analyses and choices that can increase the likelihood a good strategy being chosen
Steps in The Strategic Management Process - CORRECT ANSWER Mission
Objectives
Internal / External Analysis
Strategic Choice
Strategy Implementation
Mission / Vision - CORRECT ANSWER A firm's long-term purpose; defines what a firm aspires to be.
Misson may be positively associated with firm performance - CORRECT ANSWER Visionary firms - firms whos mission clearly captures their aspirations and permeates all that they do
Mission may harm firm performance - CORRECT ANSWER Some firms' mission is not consistent with the economic realities facing the firm
Mission may not affect firm performance - CORRECT ANSWER Some firms' mission is disconnected to behaviors or does not say anything unique of about the firm
Objectvies - CORRECT ANSWER Specific targets a firm can use to evaluate the extent to which it is realizing its mission
High Quality Objectives - CORRECT ANSWER Connect to the firm's mission
Precise & measurable
Address crucial issues
Challenging but realistic
Specify a time period
Financial Objectives - CORRECT ANSWER Objectives that relate to a firm's financial performance
Strategic Objectives - CORRECT ANSWER Objectvies that relate to a firm's strategy and competitiveness
Intended Strategy - CORRECT ANSWER A strategy a firm thought it was going to pursue
Emergent Strategy - CORRECT ANSWER A strategy that emerges over time or that has been radically reshaped once implemented. Necessary to respond to internal and external changes.
Realized Strategy - CORRECT ANSWER The strategy a firm is actually pursuing
General Environment - CORRECT ANSWER Broad trends in the context within which a firm operates that can have an impact on the firm
Parts of the General Environment - CORRECT ANSWER Legal & Political Conditions
Economic Climate
Technological Change
Demographic Trends
Cultural Trends
International Events
Broad trends - CORRECT ANSWER In the general environment, these can create threats and/or opportunities
Structure-Conduct-Performance (SCP) model - CORRECT ANSWER Focuses on the nature of competition within an industry
5 Forces Model - CORRECT ANSWER Considers other 4 competitive forces that are outside of but exert pressure on the industry. Can reduce revenue and / or increase the costs of firms in the industry.
Pieces of the 5 forces model - CORRECT ANSWER Rivalry, Buyers, Substitutes, New Entry, Suppliers
New Entrants - CORRECT ANSWER firms recently entered or are planning to enter
Substitutes - CORRECT ANSWER Products from outside the industry that meet similar customer needs
Complementor - CORRECT ANSWER Customers perceived more value in focal firm's product when it is combined with another product (Smart phones & apps).
Performance can be positive or negative.
Types of industry - CORRECT ANSWER Fragmented
Emerging
Mature
Declining
Internal Analysis - CORRECT ANSWER Provides a comparative look at a firm's resources and capabilities
Resources - CORRECT ANSWER Tangible & intangible assets a firm controls
Capabilities - CORRECT ANSWER A subset of resources that enable a firm to take full advantage of other resources
Categories of resources - CORRECT ANSWER Financial
Physical
Human
Organizational
2 critical assumptions of the Resource Based View (RBV) - CORRECT ANSWER Resource Heterogeneity
Resource Immobility
Resource Heterogeneity - CORRECT ANSWER The resource bundles of firms are different from each other and some firms are more skilled in accomplishing certain activities than rivals.
Resource Immobility - CORRECT ANSWER It may be costly / difficult for firms without certain resources to acquire or develop them.
2 forms of imitation - CORRECT ANSWER Direct duplication
Substitution
Barriers to imitation - CORRECT ANSWER Unique Historical Conditions
Casual Ambiguity
Social Complexity
Patents
Unique Historical Conditions - CORRECT ANSWER a firm developed its resources at a low cost because of unique historical conditions. (first mover advantages)
Casual Ambiguity - CORRECT ANSWER Causal links between resources and competitive advantage may not be understood.
Social Complexity - CORRECT ANSWER some resources or capabilities are socially complex. (trust, culture, relationships)
Components of a Firm's Organization - CORRECT ANSWER Formal reporting structures
Formal & informal management control system
Compensation policies
Competitive Parity - CORRECT ANSWER Valuable to a firm but not rare or hard to imitate
Temporary Competitive advantage - CORRECT ANSWER Valuable and rare, but not hard to imitate
Sustainable Competitive Advantage - CORRECT ANSWER Passes all VRIO frameworks.
Generic Business Level Strategies - CORRECT ANSWER Cost Leadership
Product Differentiation
Cost Leadership - CORRECT ANSWER Competitive advantage comes from achieving a lower cost and the same WTP.
Product Differentiation - CORRECT ANSWER Competitive advantage comes from achieving a higher consumer's perceived value of the firms products / services
Sources of Cost Leadership - CORRECT ANSWER Size Differences (econ of scale)
Experience Differences (learning curve)
Low-cost access to productive inputs
Technological advantages independent of scale
Policy choices
Organizational Structure - CORRECT ANSWER Make it as simple as possible. Few layers, small corp. staff, narrow range of functions
Management Control - CORRECT ANSWER Cost leadership Philosophy
Tight cost control; quantitative cost goals
Close supervision
Compensation policies - CORRECT ANSWER Reward/goals/incentives based on cost reduction [Show Less]