MGT 455 Exam 1

question

competitive advantage

answer

an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices

question

sustainable competitive advantage

answer

A value-creating strategy that competitors are unable to duplicate or find too costly to imitate.

question

Simple consistency

answer

activities are consistent with overall strategy

question

activity reinforcement

answer

activities help each other out, they reinforce

question

Optimization of effort

answer

how one choice makes the next more efficient, and so on (leads to cost advantages that are difficult to imitate)

question

productivity frontier

answer

the maximum value a company can deliver at a given cost, given the best available technology, skills, and management techniques

question

Competitive Convergence

answer

exists when companies are indistinguishable from each other

question

PEST analysis

answer

political, economic, social, and technological

question

The Determinants of Industry Profitability

answer

1. The value of the product to customers
2. The intensity of competition
3. Relative bargaining power at different stages of the value chain

question

game theory

answer

Evaluates alternate strategies when outcome depends not only on each individual's strategy but also that of others.

question

Competition and Cooperation

answer

cooperation is more advantageous than competition

question

Deterrence

answer

the attempt to discourage criminality through the use of punishment

question

commitment

answer

irrevocable deployments of resources that give creditability to threats

question

Signalling

answer

actions to influence a competitor's decision

question

VRIO

answer

Value, Rarity, Imitability, Organization

question

Firms resources can only be a source of a competitive advantage if they are

answer

valuable

question

Without rarity,

answer

no firm can gain a competitive advantage utilizing the resource

question

perfect competition

answer

a market structure in which a large number of firms all produce the same product

question

Imperfectly imitable

answer

resources and capabilities that are more costly for other firms to imitate

question

Organizational capability

answer

Does the firm have the organizational capabilities to exploit the full competitive potential of its resources and capabilities?

question

Complementary organizational capabilities.

answer

•Organization structure
•Compensation structure
•Marketing
•Production
•Distribution

question

imperfectly imitable

answer

sustainability

question

casual ambiguity

answer

a characteristic of a firm's resources that is costly to imitate because a competitor cannot determine what the resource is and/or how it can be re-created

question

Outsourcing

answer

A decision by a corporation to turn over much of the responsibility for production to independent suppliers.

question

Valuable and organizational capabilities =

answer

Competitive Parity, Average Returns

question

Valuable and Rare=

answer

Temporary Competitive Advantage, Above Average to Average Returns

question

Valuable, Rare and Hard to imitate

answer

Sustainable Competitive Advantage, Above Average Returns

question

Economic Value Added (EVA)

answer

the amount by which company profits exceed the cost of capital in a given year

question

SWOT analysis

answer

strengths, weaknesses, opportunities, threats

question

strengths and weaknesses (SWOT)

answer

internal

question

Opportunities and Threats (SWOT)

answer

external

question

Strategic Decisions

answer

Involve a significant amount of resources, not easily reversible, and important

question

business strategy

answer

how you compete in a specific industry or market, how you gain competitive advantage.

question

corporate strategy

answer

which businesses you should be in

question

Strategic positioning

answer

doing different activities, or doing the same activities in a different way

question

Operational Effectiveness

answer

performing activities in the best way you can

question

key success factors are derived from

answer

competition

question

pest analysis is

answer

externally driven

question

5 forces

answer

1. threat of entry
2. power of suppliers
3. power of buyers
4. Substitute competition
5. industry rivalry

question

low barriers to entry

answer

more competition, lower profitability

question

High barriers of entry

answer

less competition, higher profitability

question

Substitute competition

answer

easy switching cost

question

complimentary products

answer

They enhance the profitability of the industry because they add extra value

question

New strategies

answer

help industry profitability, reach new customers.

question

dominant strategy

answer

a strategy that is best for a player in a game regardless of the strategies chosen by the other players

question

dominant strategy equilibrium

answer

An outcome of a game in which every player plays his or her dominant strategy.

question

3 types of resources

answer

tangible, intangible, human

question

Tangible Resources

answer

resources that have physical attributes and thus are visible, financial

question

intangible resources

answer

resources that do not have physical attributes and thus are invisible, technology, reputation, culture

question

human resources

answer

the broad category of human efforts, both physical and mental, used to produce goods and services

question

the three resources

answer

organizational capabilities are built from

1 of 51

question

competitive advantage

answer

an advantage over competitors gained by offering greater customer value, either by having lower prices or providing more benefits that justify higher prices

question

sustainable competitive advantage

answer

A value-creating strategy that competitors are unable to duplicate or find too costly to imitate.

question

Simple consistency

answer

activities are consistent with overall strategy

question

activity reinforcement

answer

activities help each other out, they reinforce

question

Optimization of effort

answer

how one choice makes the next more efficient, and so on (leads to cost advantages that are difficult to imitate)

question

productivity frontier

answer

the maximum value a company can deliver at a given cost, given the best available technology, skills, and management techniques

question

Competitive Convergence

answer

exists when companies are indistinguishable from each other

question

PEST analysis

answer

political, economic, social, and technological

question

The Determinants of Industry Profitability

answer

1. The value of the product to customers
2. The intensity of competition
3. Relative bargaining power at different stages of the value chain

question

game theory

answer

Evaluates alternate strategies when outcome depends not only on each individual's strategy but also that of others.

question

Competition and Cooperation

answer

cooperation is more advantageous than competition

question

Deterrence

answer

the attempt to discourage criminality through the use of punishment

question

commitment

answer

irrevocable deployments of resources that give creditability to threats

question

Signalling

answer

actions to influence a competitor's decision

question

VRIO

answer

Value, Rarity, Imitability, Organization

question

Firms resources can only be a source of a competitive advantage if they are

answer

valuable

question

Without rarity,

answer

no firm can gain a competitive advantage utilizing the resource

question

perfect competition

answer

a market structure in which a large number of firms all produce the same product

question

Imperfectly imitable

answer

resources and capabilities that are more costly for other firms to imitate

question

Organizational capability

answer

Does the firm have the organizational capabilities to exploit the full competitive potential of its resources and capabilities?

question

Complementary organizational capabilities.

answer

•Organization structure
•Compensation structure
•Marketing
•Production
•Distribution

question

imperfectly imitable

answer

sustainability

question

casual ambiguity

answer

a characteristic of a firm's resources that is costly to imitate because a competitor cannot determine what the resource is and/or how it can be re-created

question

Outsourcing

answer

A decision by a corporation to turn over much of the responsibility for production to independent suppliers.

question

Valuable and organizational capabilities =

answer

Competitive Parity, Average Returns

question

Valuable and Rare=

answer

Temporary Competitive Advantage, Above Average to Average Returns

question

Valuable, Rare and Hard to imitate

answer

Sustainable Competitive Advantage, Above Average Returns

question

Economic Value Added (EVA)

answer

the amount by which company profits exceed the cost of capital in a given year

question

SWOT analysis

answer

strengths, weaknesses, opportunities, threats

question

strengths and weaknesses (SWOT)

answer

internal

question

Opportunities and Threats (SWOT)

answer

external

question

Strategic Decisions

answer

Involve a significant amount of resources, not easily reversible, and important

question

business strategy

answer

how you compete in a specific industry or market, how you gain competitive advantage.

question

corporate strategy

answer

which businesses you should be in

question

Strategic positioning

answer

doing different activities, or doing the same activities in a different way

question

Operational Effectiveness

answer

performing activities in the best way you can

question

key success factors are derived from

answer

competition

question

pest analysis is

answer

externally driven

question

5 forces

answer

1. threat of entry
2. power of suppliers
3. power of buyers
4. Substitute competition
5. industry rivalry

question

low barriers to entry

answer

more competition, lower profitability

question

High barriers of entry

answer

less competition, higher profitability

question

Substitute competition

answer

easy switching cost

question

complimentary products

answer

They enhance the profitability of the industry because they add extra value

question

New strategies

answer

help industry profitability, reach new customers.

question

dominant strategy

answer

a strategy that is best for a player in a game regardless of the strategies chosen by the other players

question

dominant strategy equilibrium

answer

An outcome of a game in which every player plays his or her dominant strategy.

question

3 types of resources

answer

tangible, intangible, human

question

Tangible Resources

answer

resources that have physical attributes and thus are visible, financial

question

intangible resources

answer

resources that do not have physical attributes and thus are invisible, technology, reputation, culture

question

human resources

answer

the broad category of human efforts, both physical and mental, used to produce goods and services

question

the three resources

answer

organizational capabilities are built from

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MGT 455 Exam 1

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