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GEB 4890 Exam 1 (CH 1, 2, 3, 4, 5&6) Questions and Answers 100% Solved
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GEB 4890 Exam 1 (CH 1, 2, 3, 4, 5&6) Questions and Answers 100% Solved
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GEB 4890 Exam 1 (CH 1, 2, 3, 4, 5&6)Questions and Answers 100% Solved
The most serious drawbacks for vertical integration include: ✔✔increasing business risks, slow
to adopt tech advances/more efficient production methods, less flexibility in accommodating
shifting buyer preferences, may not enable company to realize economies of scale,
capacitymatching problems, and typically calls for developing new types of
resources/capabilities.
involves contracting out certain value chain activities that are normally performs inhouse
to outside vendors. ✔✔Outsourcing
The biggest danger of outsourcing is that ✔✔a company will farm out wrong types of activities
and thereby hollow out its own competition.
A strategic alliance is a formal agreement between in which they agree to work
cooperatively toward some common objective. ✔✔two or more separate companies
A joint venture is a involving the establishment of an independent corporate entity that
the partners own and control jointly, sharing in its revenues and expenses. ✔✔partnership
Companies that have formed a need to manage their alliances like a portfolio. ✔✔host of
alliances
The best alliances are . They enable a firm to build on its strengths and to learn. ✔✔highly
selective, focusing on particular value chain activities and on obtaining specific competitive
benefit.
Six factors of capturing benefits of strategic alliances: ✔✔1. picking good partner. 2. sensitive to
cultural differences. 3. Recognizing that alliance must benefit both sides. 4. Ensuring both
parties live up to commitments. 5. Structuring decision-making process so action can be taken
swiftly. 6. managing learning process and adjusting agreement over time to fit circumstances.
Companies that have greater success managing strategic alliances/partnerships credit following:
,✔✔create a system, build relationships with partners, protect themselves via safeguards, both
make commitments to partners, and make learning a routine as part of management process.
company strategy ✔✔the set of actions that its managers take to outperform the company's
competitors and achieve superior profitability.
what makes a competitive advantage sustainable: ✔✔are elements of the strategy that give
buyers lasting reasons to prefer a company's products or services over those of competitors-
reasons that the competitors are unable to nullify or overcome despite their best efforts.
most basic 5 approaches for setting a company apart from rivals and winning a sustainable
competitive advantage ✔✔1-low-cost provider strategy, 2-broad differentiation strategy, 3-
focused low-cost strategy 4-focused differentiation strategy, 5-best-cost provider strategy
company's strategy tends to evolve ✔✔because of changing circumstances and ongoing efforts
by management to improve the strategy.
why should a company have a viable business model that outlines the company's customer
value proposition and its profit formula? ✔✔A company's business model sets forth the logic for
how its strategy will create value for customers and at the same time generate revenues
sufficient to cover costs and realize a profit. Thus, it contains 2 crucial elements, (1) the
customer value proposition, & (2) the profit formula. These elements are illustrated by the
value-price-cost framework.
A winning strategy must pass three tests: ✔✔(1) fit (external, internal, and dynamic
consistency), (2) competitive advantage ( durable competitive advantage), and (3) performance
(outstanding financial and market performance).
low-cost provider strategy ✔✔achieving a cost-based advantage over rivals.
broad differentiation strategy ✔✔seeking to differentiate the company's product or service
, from that of rivals in ways that will appeal to a broad spectrum of buyers.
focused low-cost strategy ✔✔concentrating on a narrow buyer segment and outcompeting
rivals by having lower costs and thus being able to serve niche members at a lower price.
focused differentiation strategy ✔✔concentrating on a narrow buyer segment (or market niche)
and outcompeting rivals by offering buyers customized attributes that meet their specialized
needs and tastes better than rivals' products.
best-cost provider strategy✔✔giving customers more value for the money by satisfying their
expectations on key quality features, performance, and/or service attributes while beating their
price expectations. Blends low-cost provider and differentiation strategies; the aim is to have
lower costs than rivals while simultaneously offering better differentiating attributes.
crafting a good strategy covers both S-T and L-T, achieving this entails making a managerial
commitment to a coherent array of well-considered choices about how to compete: These
include: ✔✔-How to position the company in the market place. '-How to attract customers. '-
How to compete against rivals. '-How to achieve the company's performance targets. '-How to
capitalize on opportunities to grow the business. '-How to respond to changing economic and
market conditions.
A strategy stands a better chance of succeeding when it is predicated on actions, business
approaches, and competitive moves aimed at: ✔✔(1) appealing to buyers in ways that set a
company apart from its rivals and (2) staking out a market position that is not crowded with
strong competitors.
A company achieves a when it provides buyers with superior value compared to
rival sellers or offers the same value at a lower cost to the firm. ✔✔competitive advantage
The advantage is if it persists despite the best efforts of competitors to match or
surpass this advantage. ✔✔sustainable
Changing circumstances and ongoing management efforts to improve the strategy cause a
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