WPC 480 FINAL EXAM QUESTIONS AND ANSWERS
What is strategy? - Answers - An integrated set of goal-directed actions a firm takes to
gain and sustain competitive advantage.
What are the 2 business analysis? - Answers - Internal and External.
What are the 3 business strategies? - Answers - 1) Cost, 2) Differentiation, 3)
Innovation.
What is competitive advantage? - Answers - Superior performance relative to other
competitors in the same industry or the industry average.
How do you assess competitive advantage? - Answers - Compare firm performance to
a benchmark.
What is sustainable competitive advantage? - Answers - Outperforming competitors or
the industry average over a prolonged period of time.
What is competitive disadvantage? - Answers - Underperformance relative to other
competitors in the same industry or the industry average.
What is competitive parity? - Answers - A performance of two or more firms at the same
level.
What is the key to successful strategy and gain competitive advantages? - Answers -
Combine activities for a unique position in an industry.
Where does competitive advantage come from? - Answers - 1) Performing different
activities, or 2) Performing the same activities differently than rivals.
What does strategic positioning require? - Answers - Trade-offs.
What is the fist step of a strategic goal to gain and sustain competitive advantage? -
Answers - Define a firm's vision, mission, and values.
What is a firm's vision? - Answers - What do we want to accomplish?
What is a firm's mission? - Answers - How do we accomplish our goals?
What is a firm's values? - Answers - What commitments do we make? What guardrails
do we put in place? How can we act legally and ethically in pursuit of the vision and
mission?
,What are the key aspects of an effective vision? - Answers - 1) Capture an
organization's aspiration . 2) Identifies what it ultimately wants to accomplish. 3)
Motivates employees to aim for a target. 4) Leaves room for contributions.
What is a product-oriented vision statement? - Answers - Defines a business in terms of
a good or service provided.
What is a customer-oriented vision statement? - Answers - Defines a business in terms
of providing solutions to customer needs.
What things can a firm do to vision statements and firm performance to be positively
associated? - Answers - 1) The vision is customer-oriented, 2) Internal stakeholders
help define the vision, 3) Organizational structures align with the vision statement.
What does a firm's mission statement do? - Answers - 1) Describes how to accomplish
goals and 2) Describes what the organization does (the products and services it
provides and the markets in which it competes).
What is the difference between vision and mission statements? - Answers - Vision
statements: WHAT an organization wants to accomplish (ie: to). Mission statements:
HOW the vision will be accomplished (ie: by).
What does establishing a firm's value do? - Answers - Guides an organization to
achieve its vision and fulfill its mission.
Who are the stakeholders? - Answers - Organizations, groups, individuals that can
affect or are affected by a firm's actions and have a vested claim or interest in the
performance and continued survival of the firm.
What is a firm's stakeholder strategy? - Answers - 1) Managing stakeholders in order to
gain and sustain competitive advantage, 2) Benefits of effective stakeholder strategy to
firm performance.
What are the layers of the corporate social responsibility pyramid (from the top-down)? -
Answers - 1) Philanthropic responsibilities, 2) Ethical responsibilities, 3) Legal
responsibilities, 4) Economic Responsibilities.
What is strategic leadership? - Answers - 1) Successful use of power and influence, 2)
Directing the activities of others, 3) Pursuing an organization's goals, 4) Enabling
organizational competitive advantage, 5) Upper Echelon's Theory (organizational
outcomes reflect the values and attributes of the top management team).
What is the AFI Framework for Top-Down strategic planning? - Answers - Analysis,
Formulation, Implementation
, What are the 3 types of strategies? - Answers - 1) Intended strategy, 2) Emergent
strategy, 3) Realized strategy.
What is intended strategy? - Answers - The outcome of a rational and structured top-
down strategic plan.
What is emergent strategy? - Answers - Any unplanned strategic initiative, bubbles up
from the bottom of the organization, can influence and shape a firm's overall strategy.
(ie: Starbucks manager creating the frappuccino)
What is realized strategy? - Answers - Combination of intended and emergent strategy.
What are the 2 EXTERNAL business analysis models? - Answers - 1) The PESTEL
Framework, 2) The 5 Forces Model (Porter's).
Why do we want to use the PESTEL Framework in understanding the external
environment? - Answers - It helps us identify the threats and opportunities that a firm
faces in its industry.
What does PESTEL stand for? - Answers - Political factors, Economic factors,
Sociocultural factors, Technological factors, Ecological factors, Legal factors.
What are the Political factors? - Answers - Processes and actions of government bodies
(lobbying, public relations, contributions, litigations).
What are the Economic factors? - Answers - Macro economic climates (growth rates,
employment, interest rates, price stability, currency exchange rate).
What are the Sociocultural factors? - Answers - Demographic trends (cultures, norms,
and values).
What are the Technological factors? - Answers - Innovations in process and product
technology.
What are the Ecological factors? - Answers - Involve environmental issues (natural
environment, global warming, sustainable economic growth).
What are the Legal factors? - Answers - Official outcomes of political processes
((de)regulations, court decisions, laws).
What is an industry? - Answers - Group of incumbent (current) companies with relatively
the same set of suppliers and buyers and tend to offer similar products and services.
What is the purpose of the Industry Analysis method? - Answers - 1) To identify an
industry's profit potential, and 2) Derive implications for a firm's strategic position.
What is strategy? - Answers - An integrated set of goal-directed actions a firm takes to
gain and sustain competitive advantage.
What are the 2 business analysis? - Answers - Internal and External.
What are the 3 business strategies? - Answers - 1) Cost, 2) Differentiation, 3)
Innovation.
What is competitive advantage? - Answers - Superior performance relative to other
competitors in the same industry or the industry average.
How do you assess competitive advantage? - Answers - Compare firm performance to
a benchmark.
What is sustainable competitive advantage? - Answers - Outperforming competitors or
the industry average over a prolonged period of time.
What is competitive disadvantage? - Answers - Underperformance relative to other
competitors in the same industry or the industry average.
What is competitive parity? - Answers - A performance of two or more firms at the same
level.
What is the key to successful strategy and gain competitive advantages? - Answers -
Combine activities for a unique position in an industry.
Where does competitive advantage come from? - Answers - 1) Performing different
activities, or 2) Performing the same activities differently than rivals.
What does strategic positioning require? - Answers - Trade-offs.
What is the fist step of a strategic goal to gain and sustain competitive advantage? -
Answers - Define a firm's vision, mission, and values.
What is a firm's vision? - Answers - What do we want to accomplish?
What is a firm's mission? - Answers - How do we accomplish our goals?
What is a firm's values? - Answers - What commitments do we make? What guardrails
do we put in place? How can we act legally and ethically in pursuit of the vision and
mission?
,What are the key aspects of an effective vision? - Answers - 1) Capture an
organization's aspiration . 2) Identifies what it ultimately wants to accomplish. 3)
Motivates employees to aim for a target. 4) Leaves room for contributions.
What is a product-oriented vision statement? - Answers - Defines a business in terms of
a good or service provided.
What is a customer-oriented vision statement? - Answers - Defines a business in terms
of providing solutions to customer needs.
What things can a firm do to vision statements and firm performance to be positively
associated? - Answers - 1) The vision is customer-oriented, 2) Internal stakeholders
help define the vision, 3) Organizational structures align with the vision statement.
What does a firm's mission statement do? - Answers - 1) Describes how to accomplish
goals and 2) Describes what the organization does (the products and services it
provides and the markets in which it competes).
What is the difference between vision and mission statements? - Answers - Vision
statements: WHAT an organization wants to accomplish (ie: to). Mission statements:
HOW the vision will be accomplished (ie: by).
What does establishing a firm's value do? - Answers - Guides an organization to
achieve its vision and fulfill its mission.
Who are the stakeholders? - Answers - Organizations, groups, individuals that can
affect or are affected by a firm's actions and have a vested claim or interest in the
performance and continued survival of the firm.
What is a firm's stakeholder strategy? - Answers - 1) Managing stakeholders in order to
gain and sustain competitive advantage, 2) Benefits of effective stakeholder strategy to
firm performance.
What are the layers of the corporate social responsibility pyramid (from the top-down)? -
Answers - 1) Philanthropic responsibilities, 2) Ethical responsibilities, 3) Legal
responsibilities, 4) Economic Responsibilities.
What is strategic leadership? - Answers - 1) Successful use of power and influence, 2)
Directing the activities of others, 3) Pursuing an organization's goals, 4) Enabling
organizational competitive advantage, 5) Upper Echelon's Theory (organizational
outcomes reflect the values and attributes of the top management team).
What is the AFI Framework for Top-Down strategic planning? - Answers - Analysis,
Formulation, Implementation
, What are the 3 types of strategies? - Answers - 1) Intended strategy, 2) Emergent
strategy, 3) Realized strategy.
What is intended strategy? - Answers - The outcome of a rational and structured top-
down strategic plan.
What is emergent strategy? - Answers - Any unplanned strategic initiative, bubbles up
from the bottom of the organization, can influence and shape a firm's overall strategy.
(ie: Starbucks manager creating the frappuccino)
What is realized strategy? - Answers - Combination of intended and emergent strategy.
What are the 2 EXTERNAL business analysis models? - Answers - 1) The PESTEL
Framework, 2) The 5 Forces Model (Porter's).
Why do we want to use the PESTEL Framework in understanding the external
environment? - Answers - It helps us identify the threats and opportunities that a firm
faces in its industry.
What does PESTEL stand for? - Answers - Political factors, Economic factors,
Sociocultural factors, Technological factors, Ecological factors, Legal factors.
What are the Political factors? - Answers - Processes and actions of government bodies
(lobbying, public relations, contributions, litigations).
What are the Economic factors? - Answers - Macro economic climates (growth rates,
employment, interest rates, price stability, currency exchange rate).
What are the Sociocultural factors? - Answers - Demographic trends (cultures, norms,
and values).
What are the Technological factors? - Answers - Innovations in process and product
technology.
What are the Ecological factors? - Answers - Involve environmental issues (natural
environment, global warming, sustainable economic growth).
What are the Legal factors? - Answers - Official outcomes of political processes
((de)regulations, court decisions, laws).
What is an industry? - Answers - Group of incumbent (current) companies with relatively
the same set of suppliers and buyers and tend to offer similar products and services.
What is the purpose of the Industry Analysis method? - Answers - 1) To identify an
industry's profit potential, and 2) Derive implications for a firm's strategic position.
