Here are all the sample exam questions that were mentioned during the Strategic Management lessons. The questions have been answered and neatly divided by theme. In addition, we have also added the extra questions (additional questions), if you want to go for that high grade. Good luck with the pre...
,THEMES
THEME 1
Definition of Strategy and Characteristics of Good vs. Bad Strategy
• Definition of Strategy: A strategy is a set of rules enabling a company to make
decisions over time to achieve superior performance within a competitive context. It
should address challenges, leverage competitive advantages, and translate into
coordinated actions.
• Elements of a Good Strategy:
1. Diagnosis: Identifies core challenges (e.g., Tesla reducing CO2 emissions with
EVs).
2. Guiding Policy: Provides a clear action plan to address challenges.
3. Coherent Actions: Coordinates efforts to align with the guiding policy.
• Characteristics of Bad Strategy:
1. Fluff: Vague, meaningless statements like “We aim to be the best.”
2. Failure to Face Challenges: Avoiding the identification of real obstacles.
3. Confusing Goals with Strategy: Setting targets without detailing how to achieve
them.
4. Unfocused Objectives: Goals lacking clarity and feasibility.
A good strategy requires clarity, alignment, and actionable steps, while bad strategy is
characterized by superficiality and lack of direction.
Major Variables of a Good Strategy
1. Unique Value Proposition: Offering distinct value to a specific customer segment at the
right price.
2. Tailored Value Chain: Performing unique activities that deliver the value proposition
efficiently.
3. Trade-Offs: Making deliberate choices about what not to do, ensuring focus and
efficiency.
4. Fit Across Value Chain: Ensuring all activities reinforce and complement one another.
5. Continuity Over Time: Stability in strategy to build expertise and foster long-term
success.
,What is competitive advantage and sustainable competitive advantage
COMPETITIVE ADVANTAGE
➔ Refers to factors that allow a company to produce goods or services better or more cheaply than its
rivals. These factors allow the productive entity to generate more sales or superior margings compared to
its rivals.
- Competitive advantage is meeting the customer needs more effectively, with products that customers
value more highly, or more efficiently at lower costs.
SUSTAINABLE COMPETITIVE ADVANTAGE
➔ Giving buyers lasting reasons to prefer a firms products or services to those of its competitors
Future Competitors for Apple: Google and Facebook Over Samsung
The competitive landscape for Apple is shifting from hardware competitors like Samsung to
ecosystem-based rivals like Google and Facebook:
• Ecosystem Rivalry: Companies like Google and Facebook are expanding their influence
through interconnected platforms, integrating hardware, software, and services. This
mirrors Apple's approach, which emphasizes the seamless integration of its products.
• Beyond Smartphones: As technology evolves, the competition will be less about
individual devices and more about ecosystems that encompass AI, smart homes,
wearables, and integrated user experiences.
• Differentiation: While Samsung competes primarily in hardware, Google and Facebook
compete in creating ecosystems, a domain where Apple excels. Hence, these firms are
poised to be Apple's significant future competitors.
Netflix’s Competitive Advantage through Innovation and Strategy Shifts
Netflix's competitive advantage is rooted in its ability to innovate and adapt its strategy:
• Initial Strategy: Netflix began by mailing DVDs without late fees, addressing the
problem of punitive fines in traditional rental models.
• Innovation: Netflix pioneered streaming services, leveraging technology to transition
away from physical media. This innovation capitalized on the failure of competitors like
Blockbuster to adapt.
• Data Utilization: By using extensive user data and predictive algorithms, Netflix
identifies viewer preferences and reduces risks in content creation.
• Original Content: Creating original series and movies enhanced differentiation,
solidifying its position in the entertainment industry. Netflix's agility in recognizing and
acting on market shifts allowed it to dominate the streaming space.
, Business and Value Creation
• Business = Value Creation: A business creates value by increasing customer
willingness to pay (WTP), decreasing supplier willingness to supply (WTS), and
balancing prices to deliver value for both stakeholders and the firm.
Apple’s Strategy to Increase WTP and Decrease WTS
Apple employs strategic levers to enhance Willingness to Pay (WTP) and reduce Willingness to
Supply (WTS):
• Increasing WTP:
o Product Design and Ecosystem: Apple's focus on aesthetics, quality, and
ecosystem integration makes its products highly desirable.
o Brand Value: The exclusivity and innovation associated with Apple increase
customers’ perceived value.
o Customer Loyalty: Through features like iCloud and seamless device
integration, Apple retains customers and enhances their WTP.
• Decreasing WTS:
o Supplier Bargaining Power: Apple uses its scale to negotiate favorable terms
with suppliers, paying less rent in malls and securing better deals on materials.
o Employee Loyalty: Apple fosters loyalty among its workforce through its
innovative culture, making it a desirable employer. Apple’s strategy of increasing
the "pie" rather than solely focusing on margins creates long-term competitive
advantage.
Difference Between Deliberateness and Emergence in Strategy
• Deliberateness:
o Proactive planning and execution based on clear goals and long-term objectives.
o Example: Tesla’s planned strategy to dominate the electric vehicle market
through innovation and sustainability.
• Emergence:
o Adapting to unforeseen challenges or opportunities that arise in the market.
o Example: Honda’s pivot to promoting smaller motorcycles in the U.S. after its
initial strategy with larger bikes failed.
Honda’s Shift from Deliberate to Emergent Strategy in the U.S.
Honda's experience in the U.S. market illustrates a transition from a deliberate to an emergent
strategy:
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller mesganayademeestere. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.05. You're not tied to anything after your purchase.
