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MGNT314 Midsession Study Weeks 1-6 With Solution
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MGNT314 Midsession StudyWeeks 1-6 With Solution
Chapter 1
Strategy - ANSWER is its action plan for outperforming its competitors and
achieving superior profitability
Evolution of strategic management: 1950s - ANSWER Financial budgeting:
- Operational budgeting
- Capital budgeting
Strategic management 1960s and 70s - ANSWER Corporate planning:
- Corporate plans based on 5-10yr economic forecasts
- Diversification
Strategic management Late 1970s and 1980s - ANSWER Emergence of
strategic management:
- Industry analysis
- Competitive positioning
- Strategic priorities: locating in attractive industries & establishing market
leadership
Strategic management 1990s and early 2000s - ANSWER Quest for
shareholder Value:
,- Refocusing, outsorucing, delivering, cost cutting
Quest for Competitive advantage:
- Emphasis on resources and capabilities
- Collaboration -,alliances, networks
- Succeeding in dynamic (Schumpeterian) markets
Distinguishing strategy from tactics - ANSWER The overall plan for deploying
resources to establish a favourable position
Tactic - ANSWER is a scheme for a specific maneuver
Strategy is all about How: - ANSWER -to attract and please customers
-to compete against rivals
-to position the firm in the marketplace
-best to respond to changing economic and market conditions
-to capitalize on attractive opportunities to grow the business
-to achieve the firm's performance targets
competitive advantage - ANSWER A firm achieves this when it provides
buyers with superior value compared to rival sellers or offers the same value
at a lower cost to the firm
sustainable competitive advantage - ANSWER Its advantage persits despite
the best efforts of competitors to match or surpass its advantage
Deliberate Strategy - ANSWER consists of proactive strategy elements that
are both planned and realised as planned
, Emergent Strategy - ANSWER Consits of reactive strategy elements that
emerge as changing conditions warrant
A company's current or realised strategy - ANSWER A mix of both Deliberate
strategy (proactive strategy elements) and emergent strategy (Reactive
Strategy elements)
The Customer Value Proposition - ANSWER The greater the value provided
(V) and the lower the price (P), the more attractive the value proposition is to
customers
The Profit formula - ANSWER Creating a cost structure that allows for
acceptable profits, given that pricing is tied to the customer value
proposition.
V - The value provided to customers
P - The price charged to customers
C - The firm's costs
Winning strategy - ANSWER Must pass three tests:
- the fit test
- the competitive advantage test
- the performance test
The fit test - ANSWER Does it exhibit fit with the external and internal
aspects of the firm's dynamic situation?
The competitive advantage test - ANSWER Does it help the firm achieve a
sustainable competitive advantage?
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