Strategy correct answers A concrete expression of how an organization intends to compete and win in the marketplace
How can strategy be expressed? correct answers -Product/market focus
-Value proposition
-Core activities
Generic Strategies correct answers -Broad in nature
-Describes genera...
MGT 449 Exam 2 || with 100% Errorless Answers.
Strategy correct answers A concrete expression of how an organization intends to compete and
win in the marketplace
How can strategy be expressed? correct answers -Product/market focus
-Value proposition
-Core activities
Generic Strategies correct answers -Broad in nature
-Describes general approaches to competing that can be used in all industries
Who correlates to "Cost and differentiation" correct answers Micheal Porter
Who correlates to "Prospector, Analyzer, and Defender" correct answers Miles and Snow
Low Cost Approach correct answers Charging a price similar or a little below other firms while
having costs well below them
-By charging a price at or near equilibrium but really their costs are low enough that they could
lower the price if need be
Challenges to low cost approach? correct answers Above normal returns from a low cost strategy
shrink as:
1) cost advantages shrink
2) Ability to command near average prices decreases
Drivers of Cost Advantage (7) correct answers 1) Economies of Scale
2) Economies of Learning
3) Production Techniques
4) Production Design
5) Input Costs
6) Capacity Utilization
7) Residual Efficiency
Economies of Scale (Driver of Cost Advantage) correct answers Exist where the proportion of
input in the production process increases, resulting in a lower unit cost.
-Usually related to manufacturing
-Indivisibilities
,-Speculation and division of labor
Economies of Learning (Driver of Cost Advantage) correct answers Efficiency and growth are
driven by training and specialization. (How quickly do people learn in the production process?)
-Increased skills in performing tasks
-Improved organizational routines
Production Techniques (Driver of Cost Advantage) correct answers Reengineering business
techniques
-Process innovation
Production Design (Driver of Cost Advantage) correct answers Develop a standard for designs
and components
-Design for manufacturer
Input Costs (Driver of Cost Advantage) correct answers - Location advantages
-Ownership of low cost inputs
-Non-union labor
-Bargaining of power
Capacity Utilization (Driver of Cost Advantage) correct answers -Ratio of fixed to variable costs
-Speed of capacity adjustment
Residual Efficiency (Driver of Cost Advantage) correct answers Organizational slack:
Motivation and culture; Managerial efficiency
Differentiation Approach correct answers Seeks to earn an above normal return by charging a
price above the industry average while having costs similar to other firms
Porters Generic Strategies correct answers -Comes from economics
-Sees strategy as position (From Mintzberg's 5 P's)
-The E<-->S<-->BC package we associate with strategy is more implied than specific
-Tends to apply to a particular period of time
An alternative approach to position? correct answers Strategy as a perspective
- How is the firm going to generally behave in the face of ongoing market change?
Miles and Snow strategic typology correct answers - Comes from management, organizational
theory/behavior
, -This perspective takes a more holistic, organizational approach (close to the inside-out view)
-Focus is dynamic: How will the firm maintain FIT over time? (Done through the Adaptive
Cycle)
The Adaptive Cycle correct answers Miles & Snow
1) The Entrepreneurial Problem:
-Choice of product market domain (where are we going to compete?)
2) The Engineering Problem
-Choice of technologies for production and distribution (How are we going to do this?)
3) The Administrative Problem
-Choice of structures and processes (how is the firm organized internally to make all of this
happen?)
In order for the Adaptive Cycle to work, firms need to... correct answers assume changes
overtime and continually adjust to maintain FIT
3 ways to respond to the Adaptive Cycle (maintain FIT) correct answers 1) Prospector:
-First to market, always looking for new product and market opportunities
2) Defender:
-Seeks out stable product/market niches
-Will stick with and defend this overtime
-Evolution/adaptation is slow (only change is really necessary)
3) Analyzer:
-Seeks middle ground
-Will defend some markets but fairly quick to follow successful efforts of prospectors
Competitor Analysis correct answers The firm studies competitors future objectives, current
strategies, assumptions and capabilities
-Used to help a firm understand its competitors
-Consider benchmarking their current capabilities
- With the analysis, a firm is better able to predict competitors behavior when forming its
competitive actions and responses
Competitive Dynamics:
What do competitors engage in?
-Why do they engage in this?
-How do they engage in this?
-What results from this? correct answers WHAT: Competitors engage in competitive rivalry
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