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Test Bank for Strategy and Innovation TEST 1 (5th Edition by James D. McKeen)
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Test Bank for Strategy and Innovation TEST 1 (5th Edition by James D. McKeen)
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Test Bank for Strategy and InnovationTEST 1 (5th Edition by James D.
McKeen)
Strategy - ANSDictionary Definition: A high level plan to achieve one or more goals under
conditions of uncertainty.
It is the quest to CREATE, CAPTURE, and SUSTAIN competitive advantage.
Competitive Advantage - ANSSuperior performance relative to competitors
Sustainable Competitive Advantage - ANSOccurs 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.
Basis is having development of resources and capabilities
Features of Strategy - ANS• Goal-directed actions to GAIN and SUSTAIN competitive
advantage
• Is NOT ALWAYS Zero-sum game: one side wins, the other side loses.
Market share is not the same as competitive advantage
It is a high level plan and is long term
Theory of how to compete - ANSProvide a manager's roadmap: cycle of analysis, formulations,
and feedback
Business Model - ANSSpecific to revenue and cost considerations, strategy is more abstract.
strategy in the 21st century - ANS1) Accelerating Technological Change
2) A truly global world
3)Future Industries (Health care. green economy, and web 2.0)
Firm Effects - ANSResults of managers' actions to influence firm performance
Industry Effects - ANSThe result attributed ti the choice of industry in which to compete
, Strategy across the levels - ANS• Where to compete? -corporate strategy
Ex. Should GE move more aggressively into the healthcare industry?
• How to compete?—business strategy
Ex. Should GE jet engines have better fuel efficiency than Rolls Royce?
• How to implement?—functional strategy (HR issue) not covered in this course
Internal and External Stakeholders - ANSShareholders really do not benefit. Think about the
people where its more complete. Unions can be more powerful over company stakeholders
Vision, mission and values—first steps in strategy management - ANSVisionary organization:
Begin with the end in mind (design thinking)
Vision: high level; what to ultimately accomplish?
Mission: what is the firm about?
Value: how to accomplish goals?
Types of Mission Statement - ANSCustomer-oriented missions & Product-oriented missions
Customer-oriented missions - ANSDefine the firm in terms of solutions for customers.
Enhanced strategic flexibility
Product-Oriented Missions - ANSDefine the firm in terms of products or services
Technology is more flexible so the product-oriented missions might update more frequently;
people's demand changes not so fast as technology.
Mission Statements - ANSMission statements has no relationship with competitive advantage.
Strategic commitments is more important.
This is because results are inconclusive and it is about being confident as a company to be
successful
Strategy as Strategic Planning - ANSTop-down rational planning
Define mission, vision, and goal (strategic intent)
External analysis of opportunities and threats
Internal analysis of strengths and weaknesses
Create strategic fit through SWOT
Internal: strength, weakness; External: opportunity, threads
Conduct the 2 by 2 format to analyze SWOT: interacting internal and external factors.
Formulate appropriate strategy
Implement chosen strategy
Monitor performance and modify if necessary
Strategy as Scenario Planning - ANSScenario planning—more useful
"what-if" plans—implement the most probable option—keep other scenarios in the event of
changes
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