Corporate Strategy Final - part
1questions and answers
What is strategy? - correct answer-The set of goal-directed actions a firm takes to gain and
sustain superior performance relative to competitors.
Define sustained competitive advantage. - correct answer-Outperforming competitors or the
industry average over a prolonged period of time.
What is a core competency? - correct answer-A unique strength that may be a capability,
activity, or resource.
Define capability. - correct answer-An organizational and managerial skill needed to
orchestrate a diverse set of resources and deploy them strategically.
What is the difference between industry effects and firm effects? - correct
answer-Performance attribution - firm performance is based on either structure of the
industry or actions of managers.
Why is dynamism important (think of dynamic capabilities)? - correct answer-Essential to
move beyond a short-lived advantage and create a sustained competitive advantage. Allows
the firm to adapt to changing markets and create market changes to strengthen their own
strategic position.
Describe the difference between a firm's vision, mission, and objectives. - correct
answer-Vision is a general statement about the company's aspiration; mission describes
what the organization actually does - the products and services it plans to provide, and the
markets in which it will compete; objectives are the goals of the organization.
What are entry barriers? - correct answer-Obstacles that determine how easily a firm can
enter an industry. Entry barriers are often one of the most significant predictors of industry
profit potential.
Explain network effects. - correct answer-A positive effect that one user of a product/service
has on the value of that product/service for other users. Reduces the threat of entry.
What are economies of scale? - correct answer-Cost advantages that accrue for firms with
larger output because they can spread fixed costs over more units, employ technology more
efficiently, benefit from a more specialized division of labor, and demand better terms from
suppliers.
Define switching costs. - correct answer-One-time sunk costs incurred by moving from one
supplier to another. These can be a formidable barrier to entry.
1questions and answers
What is strategy? - correct answer-The set of goal-directed actions a firm takes to gain and
sustain superior performance relative to competitors.
Define sustained competitive advantage. - correct answer-Outperforming competitors or the
industry average over a prolonged period of time.
What is a core competency? - correct answer-A unique strength that may be a capability,
activity, or resource.
Define capability. - correct answer-An organizational and managerial skill needed to
orchestrate a diverse set of resources and deploy them strategically.
What is the difference between industry effects and firm effects? - correct
answer-Performance attribution - firm performance is based on either structure of the
industry or actions of managers.
Why is dynamism important (think of dynamic capabilities)? - correct answer-Essential to
move beyond a short-lived advantage and create a sustained competitive advantage. Allows
the firm to adapt to changing markets and create market changes to strengthen their own
strategic position.
Describe the difference between a firm's vision, mission, and objectives. - correct
answer-Vision is a general statement about the company's aspiration; mission describes
what the organization actually does - the products and services it plans to provide, and the
markets in which it will compete; objectives are the goals of the organization.
What are entry barriers? - correct answer-Obstacles that determine how easily a firm can
enter an industry. Entry barriers are often one of the most significant predictors of industry
profit potential.
Explain network effects. - correct answer-A positive effect that one user of a product/service
has on the value of that product/service for other users. Reduces the threat of entry.
What are economies of scale? - correct answer-Cost advantages that accrue for firms with
larger output because they can spread fixed costs over more units, employ technology more
efficiently, benefit from a more specialized division of labor, and demand better terms from
suppliers.
Define switching costs. - correct answer-One-time sunk costs incurred by moving from one
supplier to another. These can be a formidable barrier to entry.
