MGMT 352 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED LATEST UPDATE
Strategy
a set of goal-directed actions aimed to gain and sustain superior performance relative to
competitors.
- Companies compete for resources to gain superior performance
- Needed for decisions that are important, require significant commitment of resources,
not easy to reverse
Elements of Strategy
1. Diagnosis of the competitive challenge
- Analysis of internal and external environment
2. Guiding Policy to address the challenge
- Formulation, results in a strategy
- Without consistency employees become confused and cannot make effective
decisions to support strategy and stakeholders become frustrated
3. A set of coherent actions
- Implementation
competitive advantage
- Superior performance relative to competitors or the industry average
- To gain: produce goods or services higher in value than those of competitors, or are
,lower prices
- Value gain is a consequence of filling a need and providing a product at price
consumers could afford while still making profit.
- Gains: profitability, market share
Strategic Positioning
- A unique position in the industry that allows firms to provide value to its customers
while controlling costs -> key to a successful strategy
- Economic Contribution = Value Creation - Costs (the greater the better, enhances
competitive advantage)
- Requires tradeoffs (i.e. resource allocation)
- A clear strategic profile (product differentiation, cost, customer service) helps better
need customer needs
- Can be strengthen by operational effectiveness, marketing skills, and other functional
expertise
What strategy is NOT
1. Grandiose Statements (provide little managerial guidance, lead to conflict and
confusion_
2. A failure to face a competitive challenge (i.e. blockbusters did not address streaming)
3. Operational effectiveness, competitive benchmarking, or tactical tools (i.e. local
strategy, brand strategy, pricing strategy
First step in gaining and sustaining competitive advantage
- defining mission, vision, and values
- Vision: what do we want to accomplish ultimately?
,- Mission: How do we accomplish?
- Values: what commitments do we make and what guardrails do we put in place to
pursue our mission and vision
Vision
- Captures and organization's aspiration
- Identifies the long-term objective
- Should be forward-looking and inspiring
- Internal stakeholders help define
- Organization structures also align to the vision (I.e. compensation)
An effective vision
- Pervades the organization
- Provides a sense of winning
- Motivates employees to aim for the same target
Vision: Strategic Intent
- Outlines a firm's stretch goal
- Is based on firm's vision
Actions based on vision will:
- Build necessary resources
- Build capabilities
- Ensure continuous organization learning and learning through failure
Customer Oriented Vision Statements
- Defines a business in terms of providing solutions to customer needs
- Allow to adapt to changing environments
, - Example: Ford (entered in the 1900s with a focus on providing personal mobility)
- Vision is stronger when it it customer-oriented
Product Oriented Vision Statements
- Forces managers to take a more myopic view
- Can hinder understanding of the competitive landscape
- Example: US railroads focused on railroad business instead of transportation and
logistics)
Positive Relationship between Firm Performance and Vision exists when:
- Vision is customer oriented
- Internal stakeholders are invested in defining the vision
- Organizational structures such as compensation systems align with the firm's vision
statement
Mission
- What an organization actually does
- The products and services it will provide
- The markets it will compete in
Mission: Strategic Commitments
- Credible actions that back up vision and mission
- Often costly, long-term oriented, difficult to reverse
Values
- Help employees understand the company culture, deal with complexity, and resolve
conflict through core values statement
COMPLETE SOLUTIONS VERIFIED LATEST UPDATE
Strategy
a set of goal-directed actions aimed to gain and sustain superior performance relative to
competitors.
- Companies compete for resources to gain superior performance
- Needed for decisions that are important, require significant commitment of resources,
not easy to reverse
Elements of Strategy
1. Diagnosis of the competitive challenge
- Analysis of internal and external environment
2. Guiding Policy to address the challenge
- Formulation, results in a strategy
- Without consistency employees become confused and cannot make effective
decisions to support strategy and stakeholders become frustrated
3. A set of coherent actions
- Implementation
competitive advantage
- Superior performance relative to competitors or the industry average
- To gain: produce goods or services higher in value than those of competitors, or are
,lower prices
- Value gain is a consequence of filling a need and providing a product at price
consumers could afford while still making profit.
- Gains: profitability, market share
Strategic Positioning
- A unique position in the industry that allows firms to provide value to its customers
while controlling costs -> key to a successful strategy
- Economic Contribution = Value Creation - Costs (the greater the better, enhances
competitive advantage)
- Requires tradeoffs (i.e. resource allocation)
- A clear strategic profile (product differentiation, cost, customer service) helps better
need customer needs
- Can be strengthen by operational effectiveness, marketing skills, and other functional
expertise
What strategy is NOT
1. Grandiose Statements (provide little managerial guidance, lead to conflict and
confusion_
2. A failure to face a competitive challenge (i.e. blockbusters did not address streaming)
3. Operational effectiveness, competitive benchmarking, or tactical tools (i.e. local
strategy, brand strategy, pricing strategy
First step in gaining and sustaining competitive advantage
- defining mission, vision, and values
- Vision: what do we want to accomplish ultimately?
,- Mission: How do we accomplish?
- Values: what commitments do we make and what guardrails do we put in place to
pursue our mission and vision
Vision
- Captures and organization's aspiration
- Identifies the long-term objective
- Should be forward-looking and inspiring
- Internal stakeholders help define
- Organization structures also align to the vision (I.e. compensation)
An effective vision
- Pervades the organization
- Provides a sense of winning
- Motivates employees to aim for the same target
Vision: Strategic Intent
- Outlines a firm's stretch goal
- Is based on firm's vision
Actions based on vision will:
- Build necessary resources
- Build capabilities
- Ensure continuous organization learning and learning through failure
Customer Oriented Vision Statements
- Defines a business in terms of providing solutions to customer needs
- Allow to adapt to changing environments
, - Example: Ford (entered in the 1900s with a focus on providing personal mobility)
- Vision is stronger when it it customer-oriented
Product Oriented Vision Statements
- Forces managers to take a more myopic view
- Can hinder understanding of the competitive landscape
- Example: US railroads focused on railroad business instead of transportation and
logistics)
Positive Relationship between Firm Performance and Vision exists when:
- Vision is customer oriented
- Internal stakeholders are invested in defining the vision
- Organizational structures such as compensation systems align with the firm's vision
statement
Mission
- What an organization actually does
- The products and services it will provide
- The markets it will compete in
Mission: Strategic Commitments
- Credible actions that back up vision and mission
- Often costly, long-term oriented, difficult to reverse
Values
- Help employees understand the company culture, deal with complexity, and resolve
conflict through core values statement
