L1- Introduction & External Analysis

Question 1

porter’s definition of strategy

Answer 1

creation of a unique and valuable position

Question 2

the assumptions behind porter’s definition of strategy

Answer 2

1) strategy is not just about ideas, it should involve implementation
2) activity fit is crucial, esp. for cost leadership
3) initially, positioning is vis-a-vis competitors. establishes through unique and valuable resources

Question 3

volberda’s definition of strategy

Answer 3

integrated and coordinated commitments and actions designed to exploit core competencies & gain a competitive advantage

Question 4

according to volberda, what are the two sources of building strategic advantage?

Answer 4

1. acquiring a position and capturing valuable resources
2. internally developing unique resources

Question 5

define operational effectiveness

Answer 5

performing activities more eficiently than competitors.

Question 6

methods to achieve operational effectiveness

Answer 6

outsoutcing to streamline operations
implementing business process reengineering and changing management
reducing number of defects

Question 7

define strategic positioning

Answer 7

creating a unique and valuable position in the market

Question 8

what are the three strategies of strategic positioning

Answer 8

variety based
needs based
access based

Question 9

compare variety, and needs based

Answer 9

In summary, Variety-Based strategy caters broadly to different tastes, while Needs-Based strategy hones in on a specific group’s unique needs.

Variety-based specializes in producing specific types of products to cater to different customer preferences. The approach involves targeting a wide range of customers with varied preferences.

Needs-based aim to serves the unique needs of a specific customer group. The central concept is to understand and meet the needs of one segment.

Question 10

what is the access based strategy under strategic positioning

Answer 10

access-based is targeting specific customer segments that can be reached through various channels.

Question 11

define industrial organizational model

Answer 11

The Industrial Organizational Model, focused on external factors, analyzes the external environment surrounding a business or industry.

Question 12

roadmap for industrial organizational model

Answer 12

identifying an attractive industry, formulating a strategy to develop acquired assets, and implementing the devised strategy.

Question 13

what are the assumptions of the industrial organizational model

Answer 13

1. resources are mobile
2. rational decision-making
3. firms strategies are similar in nature

Question 14

which model does industrial organizational use to do analysis?

Answer 14

porter’s 5 forces

Question 15

list porter’s 5 forces

Answer 15

1. power of buyers
2. power of suppliers
3. degree of rivalry
4. threat of new entrants
5. threat of substitutes

Question 16

define resource based view

Answer 16

an approach that analyzes the internal resources and capabilities of a firm to gain a competitive advantage.

Question 17

assumptions of the resource based view

Answer 17

1. firms are heterogenous, they’re all different in assets and capabailities
2. resources are immobile
3. rational decision making

Question 18

what model does the resource based view use?

Answer 18

VRIN

Question 19

what are two ways to identify opportunities and threats in the external environment?

Answer 19

1. macro environment
2. industry environment

Question 20

identify critical dimensions of the macro environment by looking at….

Answer 20

1. degree of uncertainty
2. impact

Question 21

degree of rivalry is high if the number of competitors is….

Answer 21

large

Question 22

degree of rivalry is high when switching costs are…

Answer 22

low

Question 23

degree of rivalry is high when industry growth is…

Answer 23

slow

Question 24

degree of rivalry is high if exit barriers are…

Answer 24

high

Question 25

supplier power is high if the concentration of suppliers is

Answer 25

HIGH -> concentration of suppliers is high means a few suppliers dominate the market.

Question 26

supplier power is high if the possibility of “…” integration is “…”

Answer 26

supplier power is high if the possibility of forward integration is high.

forward integration is when a company decides to move forward in the supply chain by producing/ delivering products themselves.
this means they have higher bargaining power.

Question 27

supplier power is high if the price/ quality ratio is (…)

Answer 27

supplier power is high if the p/q ratio is HIGH
If the P/Q ratio is high this means the price is bigger than the quality.
When the price is bigger than quality, this means the customer is willing to pay more to the supplier (can indicate uniqueness, or other factors)

Question 28

buyer power is high if there is (…) product differentiation

Answer 28

low product differentiation.
when products are not unique, buyers can easily switch between companies which gives them more bargaining power.

Question 29

threat of new entrants is high if time and cost entry is (…)

Answer 29

time and cost of entry is low
when low initial investments are required, its easier for new entrants to enter the market.

Question 30

threat of new entrants is high if economies of scale is (…)

Answer 30

if economies of scale are low or absent
if there are no significant cost advantages for large competitors, smaller players can compete without a substantial cost disadvantage

Question 31

threat of new entrants is high if technology prortection is….

Answer 31

tech protection is weak/ absent
when the market lacks strong intellectual property/ tech barriers, new entrants can easily adopt existing technology

Question 32

threat of entrants is high if switching costs are

Answer 32

switching costs are low
if customers can easily switch, this means new firms can join

Question 33

threat of substitutes is high if …

Answer 33

there are readiy available products that can satisfy the same need
the cost and performance of substitutes is competitive
there are no unique benefits that differentiate the product from substitutes

Question 34

some warnigns about porter’s five forces

Answer 34

Always apply to the industry, not firm (all firms are considered =)
Firms are seen as homogenous entities