BUSA 4980 EXAM 1 QUESTIONS WITH VERIFIED
ANSWERS
What is competitive advantage? - Answers - A (sustainable) condition or circumstance
that puts a company in a favorable or superior business position
Where does competitive advantage come from? - Answers - Capabilities that cannot be
replicated (or are very difficult to replicate in a timely fashion).
2.A superior capability to adapt to changing customer needs and environmental
conditions. These are called dynamic capabilities
Who are stakeholders and why do they matter? - Answers - People who are affected by
a firm's performance and who have claims on its performance.
•Capital Market Stakeholders
•Shareholders
•Major suppliers of capital (e.g. banks)•Product Market Stakeholders•Primary
customers•Suppliers•Host communities•Organizational
Stakeholders•Employees•Manager
What is a Vision Statement and why is it important? - Answers - A picture of what the
firm wants to be and what it wants to ultimately achieve
What is a Mission Statement and why is it important? - Answers - Specifies the
business in which it is in and the customers it intends to serve
What are the 4 steps in the analysis process?What are you looking for in this process? -
Answers - Scanning: ID early signals of environmental changes and trends
•Monitoring: Detect meaning through ongoing observation
•Forecasting: Develop projections based on anticipated outcomes
•Assessing: Determine the timing and importance of environmental changes and trends
for the firms' strategy
Looking for Opportunities and Threats!
, Segments of the General Environment - Answers - •(P) Political: •Regulation and
deregulation. Stability
•(E) Economic: •Inflation, interest rates, growth, savings rates, etc.
•(S) Sociocultural: •Cultural attitudes, diversity, & demographics
•(T) Technological: •Rate of innovation and the application of new knowledge
•(E) Environmental:•Sustainability & available resources
•(L) Legal: •Antitrust laws, patent laws, tax laws, labor la
What are the five forces within the industry environment? - Answers - 1. The threat of
new entrants relates to barriers to entry. •What are some industry characteristics that
create barriers to entry?•Economies of scale•Product Differentiation•Capital requirement
2. The bargaining power of SUPPLIERS
just a few large suppliers
supplier goods are critical
high switch costs if want to change
3. The bargaining power of BUYERS
one single buyer or very few large buyer
low switching costs for buys
undifferentiated product
4.The threat of Substitute products. •A different product that performs the same or
similar function (or satisfies the same need) as your product or service.
5.The intensity of Rivalry among competitors.•Numerous or equally balanced
competitors•Slow industry growth•High fixed or high storage costs.•Lack of
differentiation or low switching costs•High strategic stakes (location or being first)•High
exit barriers:•Specialized assets•Fixed costs at exit (labor agreements
Why is it hard to analyze the internal organization? - Answers - uncertainty: Industry,
environment, and customers.•Complexity: What is the impact of interrelationships?
What is the value of intangible assets?•Intra-organizational Conflict: between decision
makers and those affected by decisions
How do customers perceive value? - Answers - (perceived) performance
characteristics.•How much people are willing to pay for something.•So a critical
component that cannot be ignored is CUSTOMER PREFERENCES (which is why clear
segmentation is important). This highlights the importance of customers when
evaluating resources and capabilit
What are resources? - Answers - Can be defined as tangible or intangible assets
ANSWERS
What is competitive advantage? - Answers - A (sustainable) condition or circumstance
that puts a company in a favorable or superior business position
Where does competitive advantage come from? - Answers - Capabilities that cannot be
replicated (or are very difficult to replicate in a timely fashion).
2.A superior capability to adapt to changing customer needs and environmental
conditions. These are called dynamic capabilities
Who are stakeholders and why do they matter? - Answers - People who are affected by
a firm's performance and who have claims on its performance.
•Capital Market Stakeholders
•Shareholders
•Major suppliers of capital (e.g. banks)•Product Market Stakeholders•Primary
customers•Suppliers•Host communities•Organizational
Stakeholders•Employees•Manager
What is a Vision Statement and why is it important? - Answers - A picture of what the
firm wants to be and what it wants to ultimately achieve
What is a Mission Statement and why is it important? - Answers - Specifies the
business in which it is in and the customers it intends to serve
What are the 4 steps in the analysis process?What are you looking for in this process? -
Answers - Scanning: ID early signals of environmental changes and trends
•Monitoring: Detect meaning through ongoing observation
•Forecasting: Develop projections based on anticipated outcomes
•Assessing: Determine the timing and importance of environmental changes and trends
for the firms' strategy
Looking for Opportunities and Threats!
, Segments of the General Environment - Answers - •(P) Political: •Regulation and
deregulation. Stability
•(E) Economic: •Inflation, interest rates, growth, savings rates, etc.
•(S) Sociocultural: •Cultural attitudes, diversity, & demographics
•(T) Technological: •Rate of innovation and the application of new knowledge
•(E) Environmental:•Sustainability & available resources
•(L) Legal: •Antitrust laws, patent laws, tax laws, labor la
What are the five forces within the industry environment? - Answers - 1. The threat of
new entrants relates to barriers to entry. •What are some industry characteristics that
create barriers to entry?•Economies of scale•Product Differentiation•Capital requirement
2. The bargaining power of SUPPLIERS
just a few large suppliers
supplier goods are critical
high switch costs if want to change
3. The bargaining power of BUYERS
one single buyer or very few large buyer
low switching costs for buys
undifferentiated product
4.The threat of Substitute products. •A different product that performs the same or
similar function (or satisfies the same need) as your product or service.
5.The intensity of Rivalry among competitors.•Numerous or equally balanced
competitors•Slow industry growth•High fixed or high storage costs.•Lack of
differentiation or low switching costs•High strategic stakes (location or being first)•High
exit barriers:•Specialized assets•Fixed costs at exit (labor agreements
Why is it hard to analyze the internal organization? - Answers - uncertainty: Industry,
environment, and customers.•Complexity: What is the impact of interrelationships?
What is the value of intangible assets?•Intra-organizational Conflict: between decision
makers and those affected by decisions
How do customers perceive value? - Answers - (perceived) performance
characteristics.•How much people are willing to pay for something.•So a critical
component that cannot be ignored is CUSTOMER PREFERENCES (which is why clear
segmentation is important). This highlights the importance of customers when
evaluating resources and capabilit
What are resources? - Answers - Can be defined as tangible or intangible assets
