BMGT 301 FINAL STUDY GUIDE: Chapters 2, 4, 8, 9, 10, 13, 14, 15, and 17
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Course
BMGT 301
Institution
BMGT 301
1. Differentiate between operational effectiveness and strategic positioning
Operational effectiveness – Performing the same tasks better than rivals perform them. “Sameness”.
Strategic positioning – Performing different tasks than rivals, or the same tasks in a different way.
2. Differe...
BMGT 301 FINAL STUDY GUIDE: Chapters 2, 4, 8, 9, 10, 13, 14, 15, and 17
Chapter 2 – Strategy & Technology
1. Differentiate between operational effectiveness and strategic positioning
Operational effectiveness – Performing the same tasks better than rivals perform them. “Sameness”.
Strategic positioning – Performing different tasks than rivals, or the same tasks in a different way.
2. Differentiate between competitive advantage and sustainable competitive advantage
Competitive Advantage – the ability of a firm to outperform its competitors in financial measures.
Sustainable competitive advantage – Financial performance that consistently outperforms industry
averages. Achieved when resources are VRIS.
3. Understand the resource view of the firm concept
Resource-based view of competitive advantage – Strategic Thinking approach suggesting that if a firm
is to maintain sustainable competitive advantage, it must control a set of exploitable resources that
have 4 critical characteristics.
Resources must be VRIS:
A. Valuable
B. Rare
C. Imperfectly imitable (tough to imitate)
D. Not Substitutable
4. Imitation-resistant value chain
Imitation-resistant value chain – a way of doing business that competitors struggle to replicate, and that
frequently involves technology in a key enabling role.
Value chain – a set of interrelated activities that bring products or services to market
5. Resources for competitive advantage
A. Imitation-resistant Value Chains – (see above)
B. Brand – The symbolic embodiment of all the information connected with a product or service
C. Scale – Advantages related to size. Businesses benefit from economies of scale when the cost of
an investment can be spread across increasing units of production or in serving a growing
customer base.
D. Switching Costs and Data – (see below). Data can be a particularly strong switching cost for firms
leveraging technology.
E. Differentiation – (see below)
F. Network Effects – (see below)
G. Distribution Channels – path through which product and services get to customers.
H. Patents
6. Concept of switching costs
Switching costs – when consumers incur an expense to move from one product or service to another.
Sources of Switching Costs:
, A. Learning Costs – switching technology may require an investment in learning a new interface
and commands.
B. Information and Data – users may have to reenter data, convert files, etc.
C. Financial Commitment – new equipment, new software, consulting, etc.
D. Contractual Commitment – breaking contracts harm reputation as being “reliable”.
E. Search Cost – finding and evaluating new alternatives = time and money
F. Loyalty Programs – can lose out on program benefits such as miles and points.
7. Differentiation
Commodities – products or services that are nearly identically offered from multiple vendors.
o Consumers buying commodities are highly price-focused since they have so many similar choices.
o In order to break the commodity trap, many firms leverage technology to differentiate their
goods and services.
o Data plays a critical role in differentiation.
2 Types of Differentiation:
A. Vertical – Build a better product; products differ in quality
B. Horizontal – Position yourself in “product space” away from competitors; used to appeal to
distinct group of customers.
8. Networks effects
Network effects – exist when the value of a product or service increases as the number of users expand.
Network externalities or Metcalfe’s Law.
9. Activities involved in Value Chain Analysis model
The 5 primary components are:
A. Inbound logistics— getting needed materials and other inputs into the firm from suppliers
B. Operations— turning inputs into products or services
C. Outbound logistics— delivering products or services to consumers, distribution centers, retailers, or
other partners
D. Marketing and sales— customer engagement, pricing, promotion, and transaction
E. Support— service, maintenance, and customer support
The 4 secondary components are:
A. Firm infrastructure—functions that support the whole firm, including general management,
planning, IS, and finance
B. Human resource management—recruiting, hiring, training, and development
C. Technology / research and development—new product and process design
D. Procurement—sourcing and purchasing functions
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