Chapter 1

Question 1

Strategic competitiveness

Answer 1

achieved when a firm successfully formulates and implements a value-creating strategy

Question 2

3 Levels of Strategy

Answer 2

1. Functional - marketing, accounting, finance, etc
2. Business - how to run a business
3. Corporate - how to run multiple businesses

Question 3

Strategy

Answer 3

an integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage

Question 4

Competitive Advantage

Answer 4

implements a strategy that creates superior value for customers; competitors are unable to duplicate it or find too costly to imitate

Question 5

Risk

Answer 5

an investors uncertainty about the economic gains or losses that will result from a particular investment

Question 6

Above-Average Returns

Answer 6

returns i excess of what an investor expects to earn from other investments with a similar amount of risk

Question 7

Average Returns

Answer 7

returns equal to those an investor expects to earn from other investments with a similar amount of risk

Question 8

Strategic Management Process

Answer 8

1. external environment and internal organization are analyzed to determine resources, capabilities, and core competencies - the sources of strategic inputs
2. vision and mission are developed; strategies are formulated
3. strategies are implemented with the goal of achieving strategic competitiveness and above-average returns
4. DYNAMIC

Question 9

What two actions are required for the strategic management process?

Answer 9

formulation and implementation

Question 10

Hypercompetition

Answer 10

market instability and change - driven by globalization and changes in technology

Question 11

Disruptive Technologies

Answer 11

possible for you to have a competitive advantage for a little longer, these are complete game changers - creating a new industry

Question 12

Three concepts regarding technology in the competitive environment

Answer 12

1. technology diffusion & disruptive technologies
2. the information age
3. increasing knowledge intensity

Question 13

Technology diffusion

Answer 13

the speed at which new technologies become available and used

Question 14

Perpetual Innovation

Answer 14

describes how rapidly and consistently new, information-intensive technologies replace older ones (related to technology diffusion)

Question 15

Competitive Premium

Answer 15

exists due to the shorter product life cycles resulting from rapid diffusions of new technologies

Question 16

Speed to Market

Answer 16

with innovative products is often a primary source of competitive advantage

Question 17

Knowledge

Answer 17

an intangible resource gained through experience, observation and inference

Question 18

Knowledge Spillover

Answer 18

when knowledge falls into the competitor’s hands

Question 19

Strategic Flexibility

Answer 19

set of capabilities used to respond to various demands and opportunities existing in a dynamic and uncertain competitive environment

Question 20

Two Models of Strategic Decision Making

Answer 20

1. I/O model (external)

2. RBV model (internal)

Question 21

Four Underlying Assumptions of the I/O Model

Answer 21

1. external environment is assumed to impose pressures and constraints
2. firms are assumed to control similar strategically relevant resources and to pursue similar strategies
3. any resource differences that might develop between firms
4. org decision-makrers are assumed to be rational and committed to acting in the firms best interest

Question 22

Five Forces Model

Question 23

Core Assumptions of RBV Model

Answer 23

uniqueness

Question 24

Four Components to the RBV Model

Answer 24

1. resources
2. capabilities
3. core competencies
4. competitive advantage

Question 25

Four Criteria of the RBV Model

Answer 25

1. valuable 2. rare 3. costly to imitate 4. nonsubstitutable

Question 26

Four Underlying Assumptions

Answer 26

1. differences in firms' performances are due to their unique resources 2. firms develop unique capabilities based on how they combine their resources 3. resources and capabilities are not highly mobile across firms 4. differences in resources and capabilities are the basis of competitive advantages

Question 27

Vision

Answer 27

long-term, big picture goal

Question 28

Mission

Answer 28

how will I accomplish the vision

Question 29

How to Manage Stakeholders?

Answer 29

1. zero-sum perspective (win-lose) | 2. symbiotic perspective (win-win)

Question 30

Three Groups of Stakeholders

Answer 30

1. capital market 2. product market 3. organizational

Question 31

Capital Market Stakeholders

Answer 31

shareholders and the major suppliers of a firm's capital

Question 32

Product Market Stakeholders

Answer 32

a firm's primary customers, suppliers, host communities, and unions representing the workforce

Question 33

Organizational Stakeholders

Answer 33

firm's employees, including both non-managerial and managerial personnel

Question 34

Organizational Culture

Answer 34

social energy that drives - or fails to drive - the organization, the ideologies, symbols, and shared core values