Ch 3 - Test 1

Question 1

Company Situation Analysis: Key Questions?

Answer 1

How well firm is doing?
What are the firm’s S(trengths), W(eaknessess), T(hreats), and O(pportunities)?
Firm’s prices cost competitive?
How strong is firm’s competitive position to rivals?
Strategic issues does the firm face?

Question 2

Question 1: How well is the Present Strategy Working?

Answer 2

Determine Current Strategy & Examine key indicators of strategic and financial performance

Question 3

Question 1: What is Strategy?

Answer 3

Identify competitive approach, determine competitive scope, Identify functional strategies, examine recent strategic moves

Question 4

Question 1: Key Indicators of How Well the Strategy Is Working

Answer 4

Market Share, profit margins, net profits, RoE, EVA, Sales growth, credit ranking, stock price, image and reputation, leadership roles, competitive advantages or disadvantages

Question 5

Question 2: What are SWOT?

Answer 5

SWOT & Strategy-making must be well-matched to:

a firms resource strengths and weaknesses
a firms best market opportunities and external threats to its well-being

Question 6

Question 2: Identifying Resource Strengths and Competitive Capabilities

Answer 6

Valuable: competencies or know-how, Physical assets, human assets, organizational assets, intangible assets, competitive capabilities

Question 7

Question 2: identifying Resource Weaknesses and Competitive Deficiencies

Answer 7

Lacking in: know-how, expertise, or competencies, physical organization or intangible assists, missing capabilities in key areas

Question 8

Competencies

Answer 8

internal activities that a company performs better than other internal activities

Question 9

Core competencies

Answer 9

well-performed internal activity that is central, to a company’s strategy, competitiveness, and profitability; generally a trait that resides with a company’s people; ex: expertise in an important technology

Question 10

Distinctive Competence

Answer 10

competitively valuable activity that a company performs better than its rivals; can provided a competitive edge in the marketplace; ex: Toyota’s distinct manufacturing process for cutting costs

Question 11

Question 3: Are the company’s prices and cost competitive?

Answer 11

determining the value of the corporation, 3 tools:
Strategic Cost Analysis
Value Chain Analysis
Benchmarking

Question 12

Strategic Cost Analysis

Answer 12

Focuses on firm’s cost relative to rivals;
Cost based on activity by activity against key rivals;
pinpoints internal activities are a source of cost adv/disadv

Question 13

Value Chain Analysis

Answer 13

identifies separate activities and business processes performed to design, produce, market, deliver, and support a product/service

Question 14

Primary Activites of Value Chain

Answer 14

Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, Service

Question 15

Secondary/Support Activities of Value Chain

Answer 15

General Administration, HR Management, Tech Development, Procurement

Question 16

Question 4: How strong is firm’s competitive position to rivals?

Answer 16

Resource-based View of the Firm consists of 3 types of resources: tangible, intangible, and organizational capabilities

Question 17

Tangible Resources

Answer 17

Financial, Physical, technological (trade secrets), organizational (excellent evaluation and control systems)

Question 18

Intangible Resources

Answer 18

Human, Innovation and Creativity, Reputation

Question 19

Organizational Capabilities

Answer 19

Firm competencies, and capacity to combine tangible and intangible (outstanding customer service, innovativeness of product and services)

Question 20

4 test of whether a “resource” has real potential for producing sustainable competitive advantage

Answer 20

Hard to copy?
Staying Power? Is it durable?
Competitively Superior?
Can it be trumped by different capabilities of rivals?

Question 21

Identifying Industry Key Success Factors

Answer 21

3 questions to pin point KSFs:
– On what basis do customers choose between
competing brands of sellers?
– What must a seller do to be competitively successful – what resources and competitive capabilities does it need?
– What does it take for sellers to achieve a sustainable competitive advantage?

Question 22

Question 5: What Strategic Issues Does the Company Need to Address?

Answer 22

What should mgmt worry about? Think about the pros/cons of company.

Good strategy addresses each and every strategic issue

Question 23

Identifying Strategic Issues

Answer 23

Present strategy adequate in light of competitive pressures?
Strategy well-matched to the industry’s key success factors?
Company need new or different resource strengths and competitive capabilities?

Question 24

Evaluating Firm Performance

Answer 24

Financial Ratio Analysis: Balance Sheet and Income Statement (must evaluate over time changes)

Balanced Score Card: Employees, Customers, Owners perspectives (provide meaningful integration of many issues that come into evaluating a firm’s performance

Question 25

Balanced Scorecard: Financial Perspective

Answer 25

Profitability, Growth, Shareholder Value, Increased Market Share, Reduced expenses, higher asset turnover

Question 26

Balanced Scorecard: Innovation and Learning perspective

Answer 26

New Products and Services Greater value for customers Increased operating efficiencies

Question 27

Balanced Scorecard: Internal Business Perspective

Answer 27

Process Cycle Time, Quality, Skill, Productivity

Question 28

Balanced Scorecard: Customer Perspective

Answer 28

Time, Quality, Service, Cost