SEVI 3013 - Final Exam with Complete
Solutions
What is Strategy? - ANSWER-is an integrated and coordinated set of commitments and
actions designed to exploit core competencies and gain competitive advantage
An effective strategy enables what? - ANSWER-enables firm to exploit competencies in
a way that differentiates itself from competitors
Effective strategy allows: - ANSWER-firm to outperform its rivals, and achieve above
average returns
Above Average Returns - ANSWER-returns in excess of what an investor expects to
earns from other investments with a similar amount of risk
what questions do strategy answer? - ANSWER-1. WHERE do we compare
2. What UNIQUE VALUE do we bring?
3. What RESOURCES & CAPABILITIES do we utilize?
4. How do we SUSTAIN UNIQUE VALUE over time?
I/O Model - ANSWER-the external environment drives company performance - Find the
"right" industry
Resource Based Model - ANSWER-resources and capabilities drive company
performance - identify and lever core competencies
Industry Environment Analysis - ANSWER-1) Threat of new entrants
2) Bargaining power of suppliers
3) Bargaining power of buyers
4) Threat of substitute products
5) Intensity of rivalry among competitors
External Analysis Outcomes - ANSWER-determine the opportunities and threats in an
industry or any segment that will drive profitability, growth, and volatility through
1) economic
2) sociocultural
3) global
4) technological
5) political/legal
6) demographic
, Five Forces Model (finding the "right" Industry) - ANSWER-Rivalry among existing
competitors: 1. threat of new entrants
2. bargaining power of buyers
3. threat of substitutes products or services
4. bargaining power of suppliers
Components of External Analysis
1. Scanning - ANSWER-identifying early signs of environmental changes and trends
Components of External Analysis
2. Monitoring - ANSWER-defining meaning through ongoing observations of changes
and trends
Components of External Analysis
3. Forecasting - ANSWER-developing projections of anticipated outcomes based on
changes and trends
Components of External Analysis
4. Assessing - ANSWER-determining the timing and importance of changes and trends
for firms strategies
Internal Analysis - ANSWER-- The process of examining an organization's strengths
and weaknesses.
- helps the company decision-makers accurately identify areas for growth or revision to
form a practical business strategy or business plan.
Tangible Resources - ANSWER-resources that have physical attributes and thus are
visible
intangible resources - ANSWER-resources that do not have physical attributes and thus
are invisible
Building Competitive Advantage - ANSWER-1. Resources: physical, human,
organizational capital (tangible & intangible)
2. Capability: an integrated set of resources
3. Core competencies: a source of competitive advantage
Characteristics of Core Competency - ANSWER-- costly to imitate
- valuable
- rare
- non substitutable
Not valuable, rare, costly to imitate, nonsubstitutable - ANSWER-its has a competitive
disadvantage with below avg returns
Solutions
What is Strategy? - ANSWER-is an integrated and coordinated set of commitments and
actions designed to exploit core competencies and gain competitive advantage
An effective strategy enables what? - ANSWER-enables firm to exploit competencies in
a way that differentiates itself from competitors
Effective strategy allows: - ANSWER-firm to outperform its rivals, and achieve above
average returns
Above Average Returns - ANSWER-returns in excess of what an investor expects to
earns from other investments with a similar amount of risk
what questions do strategy answer? - ANSWER-1. WHERE do we compare
2. What UNIQUE VALUE do we bring?
3. What RESOURCES & CAPABILITIES do we utilize?
4. How do we SUSTAIN UNIQUE VALUE over time?
I/O Model - ANSWER-the external environment drives company performance - Find the
"right" industry
Resource Based Model - ANSWER-resources and capabilities drive company
performance - identify and lever core competencies
Industry Environment Analysis - ANSWER-1) Threat of new entrants
2) Bargaining power of suppliers
3) Bargaining power of buyers
4) Threat of substitute products
5) Intensity of rivalry among competitors
External Analysis Outcomes - ANSWER-determine the opportunities and threats in an
industry or any segment that will drive profitability, growth, and volatility through
1) economic
2) sociocultural
3) global
4) technological
5) political/legal
6) demographic
, Five Forces Model (finding the "right" Industry) - ANSWER-Rivalry among existing
competitors: 1. threat of new entrants
2. bargaining power of buyers
3. threat of substitutes products or services
4. bargaining power of suppliers
Components of External Analysis
1. Scanning - ANSWER-identifying early signs of environmental changes and trends
Components of External Analysis
2. Monitoring - ANSWER-defining meaning through ongoing observations of changes
and trends
Components of External Analysis
3. Forecasting - ANSWER-developing projections of anticipated outcomes based on
changes and trends
Components of External Analysis
4. Assessing - ANSWER-determining the timing and importance of changes and trends
for firms strategies
Internal Analysis - ANSWER-- The process of examining an organization's strengths
and weaknesses.
- helps the company decision-makers accurately identify areas for growth or revision to
form a practical business strategy or business plan.
Tangible Resources - ANSWER-resources that have physical attributes and thus are
visible
intangible resources - ANSWER-resources that do not have physical attributes and thus
are invisible
Building Competitive Advantage - ANSWER-1. Resources: physical, human,
organizational capital (tangible & intangible)
2. Capability: an integrated set of resources
3. Core competencies: a source of competitive advantage
Characteristics of Core Competency - ANSWER-- costly to imitate
- valuable
- rare
- non substitutable
Not valuable, rare, costly to imitate, nonsubstitutable - ANSWER-its has a competitive
disadvantage with below avg returns
