BUSI 5190 QUESTIONS WITH ACCURATE ANSWERS
3 big questions of strategy correct answer What's the company's present
situation?
What should the company's future direction be and what performance targets
should we set?
What is our plan for running the company and producing good results?
A Unified overall Strategy... correct answer -entails creating a cohesive collection
of mutually reinforcing initiatives that fit together like jigsaw puzzle pieces
-lower-level strategies be scrutinized for conflicting elements that require
modification
-adapted to accommodate more appealing lower-level strategy ideas
ADJUSTING STRATEGY TO PREPARE FOR THE IMPACTS OF DRIVING FORCES
correct answer Draw some conclusions about what strategy adjustments will be
needed to deal with the impacts of the driving forces.
1. If understanding of the drivers' impact is unclear, the chance of making proper
strategy adjustments is slim.
2. Driving forces analysis is not something to take lightly; it has practical value and
is basic to the task of thinking strategically about where the industry is headed
and how to prepare for the changes ahead.
,Applying the VRINO framework
The Question of Imitability correct answer • the temporary competitive
advantage of valuable and rare resources can be sustained only if competitors
face a cost disadvantage in imitating the resource
» intangible resources are usually more costly to imitate than tangible resources
Applying the VRINO framework
The Question of Rarity correct answer • if a resource is not rare, then perfect
competition dynamics are likely to be observed (i.e., no competitive advantage,
no above normal profits)
-a resource must be rare enough that perfect competition has not set in
• thus, there may be other firms that possess the resource, but still few enough
that there is scarcity
Applying the VRINO framework
The Question of Value correct answer • in theory: Does the resource enable the
firm to exploit an external opportunity or neutralize an external threat?
• the practical: Does the resource result in an increase in revenues, a decrease in
costs, or some combination of the two?
Are prices and costs competitive? correct answer Two analytical tools: - Value
chain analysis
- Benchmarking
, Assessing the Impact of the Driving Forces correct answer Answers to three
questions are needed:
1. Are the driving forces collectively acting to cause demand for the industry's
product to increase or decrease?
2. Is the collective impact of the driving forces making competition more or less
intense?
3. Will the combined impacts of the driving forces lead to higher or lower industry
profitability?
Balanced Scorecard correct answer "how we will monitor and implement that
plan"
Bargaining power of buyers correct answer Buyers can 'squeeze' profits in the
focal industry by demanding lower prices and/or higher levels of quality and
service
Conditions facilitating buyer power:
-Small # of buyers
-Some or many buyers have sufficient bargaining leverage to obtain price
concessions and other favorable terms and conditions of sale.
-Many buyers are price sensitive and have the power, if they act in unison, to
place limits on the prices that industry members can charge.
-Focal industry product is undifferentiated
-Buyers could vertically integrate backwards
3 big questions of strategy correct answer What's the company's present
situation?
What should the company's future direction be and what performance targets
should we set?
What is our plan for running the company and producing good results?
A Unified overall Strategy... correct answer -entails creating a cohesive collection
of mutually reinforcing initiatives that fit together like jigsaw puzzle pieces
-lower-level strategies be scrutinized for conflicting elements that require
modification
-adapted to accommodate more appealing lower-level strategy ideas
ADJUSTING STRATEGY TO PREPARE FOR THE IMPACTS OF DRIVING FORCES
correct answer Draw some conclusions about what strategy adjustments will be
needed to deal with the impacts of the driving forces.
1. If understanding of the drivers' impact is unclear, the chance of making proper
strategy adjustments is slim.
2. Driving forces analysis is not something to take lightly; it has practical value and
is basic to the task of thinking strategically about where the industry is headed
and how to prepare for the changes ahead.
,Applying the VRINO framework
The Question of Imitability correct answer • the temporary competitive
advantage of valuable and rare resources can be sustained only if competitors
face a cost disadvantage in imitating the resource
» intangible resources are usually more costly to imitate than tangible resources
Applying the VRINO framework
The Question of Rarity correct answer • if a resource is not rare, then perfect
competition dynamics are likely to be observed (i.e., no competitive advantage,
no above normal profits)
-a resource must be rare enough that perfect competition has not set in
• thus, there may be other firms that possess the resource, but still few enough
that there is scarcity
Applying the VRINO framework
The Question of Value correct answer • in theory: Does the resource enable the
firm to exploit an external opportunity or neutralize an external threat?
• the practical: Does the resource result in an increase in revenues, a decrease in
costs, or some combination of the two?
Are prices and costs competitive? correct answer Two analytical tools: - Value
chain analysis
- Benchmarking
, Assessing the Impact of the Driving Forces correct answer Answers to three
questions are needed:
1. Are the driving forces collectively acting to cause demand for the industry's
product to increase or decrease?
2. Is the collective impact of the driving forces making competition more or less
intense?
3. Will the combined impacts of the driving forces lead to higher or lower industry
profitability?
Balanced Scorecard correct answer "how we will monitor and implement that
plan"
Bargaining power of buyers correct answer Buyers can 'squeeze' profits in the
focal industry by demanding lower prices and/or higher levels of quality and
service
Conditions facilitating buyer power:
-Small # of buyers
-Some or many buyers have sufficient bargaining leverage to obtain price
concessions and other favorable terms and conditions of sale.
-Many buyers are price sensitive and have the power, if they act in unison, to
place limits on the prices that industry members can charge.
-Focal industry product is undifferentiated
-Buyers could vertically integrate backwards
