WPC 480 Zhu Midterm Exam Questions
and Answers
an integrated and coordinated set of commitments and actions designed to exploit core
competencies and gain a competitive advantage - Answers -strategy
a firm has a __________ __________ when it creates superior call for customers in
ways that competitors are unable to imitate or find too costly to imitate - Answers -
competitive advantage
a competitive advantage often leads to __________-average returns- returns in excess
of what an investor expects to earn from other investments with a similar level of risk
(ROE, ROA, ROS, EPS, EBITA, etc.) - Answers -above
What Model is this?
1. External Environment
2. An Attractive Industry
3. Strategy Formulation
4. Assets and Skills
5. Strategy Implementation
6. Superior Returns - Answers -I/O Model of Above-Average Returns
I/O Assumption:
1. strategic decision makers are __________ and engage in profit-__________
behaviors - Answers -rational, maximizing
I/O Assumption:
2. Resource differences among competitors are __________-lived due to resource
__________ across firms - Answers -short, mobility
I/O Assumption:
3. __________ in strategically relevant resources causes competitors to pursue
__________ strategies - Answers -similarity, similar
I/O Assumption:
4. The __________ environment imposes pressures and contusing that determine
strategic __________. - Answers -external, choices
Five Forces Model of Competition - Answers -1. Industry Rivalry
2. Threat of Substitutes
3. Buying Power of Buyers
,4. Threat of Potential Entrants
5. Buying Power of Suppliers
Five Forces Model Assumptions:
1. Industry __________ is a function of interactions among the five forces - Answers -
profitability
Five Forces Model Assumptions:
2. Industry __________ equates to its potential earning above-average returns by:
- producing standardized goods or services at costs __________ competitor costs (cost
leadership strategy)
- producing differentiated goods or services for which customers are willing to pay a
price __________ (a differentiation strategy) - Answers -attractiveness, below, premium
The Resource Based Model of Above-Average Returns - Answers -building competitive
advantage:
1. resources
2. capability
3. core competency
Resource-Based Model Assumption:
1. resources and certain capabilities are not highly __________ across firms - Answers
-mobile
Resource-Based Model Assumption:
2. firms acquire __________ resources - Answers -different
Resource-Based Model Assumption:
3. Firms develop __________ capabilities based on how they ___________ and _____
resources - Answers -unique, combine, use
Resource-Based Model assumption:
4. __________ in resources and capabilities are the bases of competitive advantage
and a firm's performance rather than its industry's structural characteristics. - Answers -
differences
how resources become core competencies:
- costly to __________
- valuable
- nonsubstitutable
- rare - Answers -imitate
What model is this?
1. Resources
2. Capability
3. Competitive Advantage
, 4. An Attractive Industry
5. Strategy Formulation and Implementation
6. Superior Returns - Answers -The Resource-Based Model of Above-Average Returns
- is an enduring word picture of what the firm wants to be and expects to achieve in the
future.
- stretches and challenges its people.
- reflects the firm's values and aspirations.
- is most effective when its development includes all stakeholders.
- recognizes the firm's internal and external competitive environments.
- is supported by upper management decisions and actions. - Answers -a successful
vision statement
- specifies the present business or businesses in which the firm intends to compete and
customers it intends to serve.
- has a more concrete, near-term focus on current product markets and customers than
the firm's vision.
- should be inspiring and relevant to all stakeholders. - Answers -an effective mission
statement
categories of stakeholders - Answers -- capital market
- product market
- organizational
people who are affected by a firm's performance and who have claims on its
performance - Answers -stakeholders
- shareholders
- major suppliers of capital (ex: banks) - Answers -capital market stakeholders
- primary customers
- suppliers
- host communities
- unions - Answers -product market stakeholders
- employees
- managers
- nonmanagers - Answers -organizational stakeholders
what type of external environment is focused on the future? - Answers -general
what type of external environment is focused on factors and conditions influencing a
firm's profitability within an industry? - Answers -industry
what type of external environment is focused on predicting the dynamics of competitors'
actions, responses and intentions? - Answers -competitor
and Answers
an integrated and coordinated set of commitments and actions designed to exploit core
competencies and gain a competitive advantage - Answers -strategy
a firm has a __________ __________ when it creates superior call for customers in
ways that competitors are unable to imitate or find too costly to imitate - Answers -
competitive advantage
a competitive advantage often leads to __________-average returns- returns in excess
of what an investor expects to earn from other investments with a similar level of risk
(ROE, ROA, ROS, EPS, EBITA, etc.) - Answers -above
What Model is this?
1. External Environment
2. An Attractive Industry
3. Strategy Formulation
4. Assets and Skills
5. Strategy Implementation
6. Superior Returns - Answers -I/O Model of Above-Average Returns
I/O Assumption:
1. strategic decision makers are __________ and engage in profit-__________
behaviors - Answers -rational, maximizing
I/O Assumption:
2. Resource differences among competitors are __________-lived due to resource
__________ across firms - Answers -short, mobility
I/O Assumption:
3. __________ in strategically relevant resources causes competitors to pursue
__________ strategies - Answers -similarity, similar
I/O Assumption:
4. The __________ environment imposes pressures and contusing that determine
strategic __________. - Answers -external, choices
Five Forces Model of Competition - Answers -1. Industry Rivalry
2. Threat of Substitutes
3. Buying Power of Buyers
,4. Threat of Potential Entrants
5. Buying Power of Suppliers
Five Forces Model Assumptions:
1. Industry __________ is a function of interactions among the five forces - Answers -
profitability
Five Forces Model Assumptions:
2. Industry __________ equates to its potential earning above-average returns by:
- producing standardized goods or services at costs __________ competitor costs (cost
leadership strategy)
- producing differentiated goods or services for which customers are willing to pay a
price __________ (a differentiation strategy) - Answers -attractiveness, below, premium
The Resource Based Model of Above-Average Returns - Answers -building competitive
advantage:
1. resources
2. capability
3. core competency
Resource-Based Model Assumption:
1. resources and certain capabilities are not highly __________ across firms - Answers
-mobile
Resource-Based Model Assumption:
2. firms acquire __________ resources - Answers -different
Resource-Based Model Assumption:
3. Firms develop __________ capabilities based on how they ___________ and _____
resources - Answers -unique, combine, use
Resource-Based Model assumption:
4. __________ in resources and capabilities are the bases of competitive advantage
and a firm's performance rather than its industry's structural characteristics. - Answers -
differences
how resources become core competencies:
- costly to __________
- valuable
- nonsubstitutable
- rare - Answers -imitate
What model is this?
1. Resources
2. Capability
3. Competitive Advantage
, 4. An Attractive Industry
5. Strategy Formulation and Implementation
6. Superior Returns - Answers -The Resource-Based Model of Above-Average Returns
- is an enduring word picture of what the firm wants to be and expects to achieve in the
future.
- stretches and challenges its people.
- reflects the firm's values and aspirations.
- is most effective when its development includes all stakeholders.
- recognizes the firm's internal and external competitive environments.
- is supported by upper management decisions and actions. - Answers -a successful
vision statement
- specifies the present business or businesses in which the firm intends to compete and
customers it intends to serve.
- has a more concrete, near-term focus on current product markets and customers than
the firm's vision.
- should be inspiring and relevant to all stakeholders. - Answers -an effective mission
statement
categories of stakeholders - Answers -- capital market
- product market
- organizational
people who are affected by a firm's performance and who have claims on its
performance - Answers -stakeholders
- shareholders
- major suppliers of capital (ex: banks) - Answers -capital market stakeholders
- primary customers
- suppliers
- host communities
- unions - Answers -product market stakeholders
- employees
- managers
- nonmanagers - Answers -organizational stakeholders
what type of external environment is focused on the future? - Answers -general
what type of external environment is focused on factors and conditions influencing a
firm's profitability within an industry? - Answers -industry
what type of external environment is focused on predicting the dynamics of competitors'
actions, responses and intentions? - Answers -competitor
