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OAM 331 Exam 2 Questions With Correct Answers Blue Ocean Strategy Key Takeaways (C12) - answer-Red oceans are existing industries, blue ocean means doing business where there is no competition. -Blue ocean strategy is not about technology innovation. -Incumbents often create blue oceans within...

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©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM



OAM 331 Exam 2 Questions With Correct
Answers


Blue Ocean Strategy Key Takeaways (C12) - answer✔-Red oceans are existing industries, blue

ocean means doing business where there is no competition.

-Blue ocean strategy is not about technology innovation.

-Incumbents often create blue oceans within their core business.

-The most appropriate unit of analysis is not an industry or company, but the managerial actions

and decisions to create a market (aka strategic move).

-Never use competition as the benchmark.

-Rejects the productivity trade-off; blue oceans mean increasing value AND reducing costs.

-This is a business model → only achieved when the system of company's utility, price, and cost

are properly aligned!!

-Creating a new market provides immediate barriers to imitation


The Rule of Three (C13) - answer✔In every mature industry, 3 major players dominate the

market (between 70-90% market share).

, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM


Niche specialist players make up the rest of the market.

If not a major player or specialist, end up in "the ditch".

Provides a framework for strategy dependent on position in the market.

What is WeWork?

What industry do they compete in?


Who are their customers? (C14) - answer✔Communal work space in every major city. They are

in the business of 'space'. They don't own almost any of the buildings they are in. Customers are

young professionals.

How would you describe WeWork cost structure?


What is their strategy? (C14) - answer✔Their customers want cheaper office space that they can

rent more flexibly, not be locked into year long contracts.


Corporate Strategy answers the question ______________________ (C15) - answer✔"where to

compete".




Corporate strategy == the overall plan for a diversified company -- is both the darling and the

stepchild of contemporary management practice.

, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM


The darling ⇒ because CEOs have been obsessed with diversification since the early 1960s.




The stepchild ⇒ because almost no consensus exists about what corporate strategy is, much less

about how a company should formulate it.




They work better together than they do separately.


Business Unit (Competitive) Strategy (C15) - answer✔Single product market.


How to create competitive advantage.

How to compete.




Competition Occurs at the Business Unit Level.

Diversified companies do not compete, Only their business units do


Corporate (Company-wide) Strategy (C15) - answer✔Multiple industries/markets concurrently.


What businesses to be in and how corporate should manage.

Where to compete:

-Vertical integration (value chain).

-Diversification (product, services).

, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM


-Geography.




Unless a corporate strategy places primary attention on nurturing the success of each unit, the

strategy will fail, no matter how elegantly constructed.

GE Corporate strategy (C15)




What is the General Electric situation, complication, key question? - answer✔Question: Look at

this presentation from GE: How does this relate to corporate strategy? (ON EXAM)

They do lots of business in different areas.




GE using "Best Practices" to be more operational efficient with mergers.




GE bought Oil-Services with a huge amount of money, Turnout: BAD


Three corporate strategy premises (C15) - answer✔Premise #1: Competition occurs at the

business level; diversified companies do not compete.




Premise #2: Diversification inevitably adds costs and constraints to business units.

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