BADM 449 Exam 2 – Study Guide, Key Concepts & Practice Questions Review
Define game plan. - correct answer ✔✔The ways in which a firm will compete against present
and future rivals within a particular business
What is the question to ask for a business strategy? - correct answer ✔✔How to compete?
What is the question to ask for a corporate strategy? - correct answer ✔✔In which markets to
compete?
What components make up a strategy diamond? - correct answer ✔✔economic logic, arenas,
vehicles, staging, differentiators
What questions are you addressing via vehicles? - correct answer ✔✔How will we get there?
-internal development?
- joint ventures?
- licensing/ franchising?
- alliances?
- acquisitions?
What questions are you addressing via arenas? - correct answer ✔✔Where will we be active (&
how much emphasis)?
- which product categories?
- which channels?
-which market segments?
- which geographic areas?
- which core technologies?
,- which value-creation strategies?
What questions are you addressing via differentiators? - correct answer ✔✔How will we win?
- image?
- customization?
- price?
- styling?
- product reliability?
- speed to market?
What questions are you addressing via staging? - correct answer ✔✔What will be our speed
and sequence of moves?
- speed of expansion?
- sequence of initiatives?
What questions are you addressing via economic logic? - correct answer ✔✔How will returns be
obtained?
- lowest costs through scale advantages?
- lowest costs through scope and replication advantages?
- premium prices due to unmatchable service?
- premium prices due to proprietary product features?
What is a value-based business strategy? (2) - correct answer ✔✔(1) The amount of value that a
firm can claim cannot exceed its added value under unrestricted bargaining
(2) The key to a firm's achieving a positive added value is the existence of a favorable
asymmetry between the firm and its competitors.
, What are the 4 routes to favorable asymmetry in value-based strategies - correct answer
✔✔Firm// Competitors
Willingness-to-pay
opp. cost
(up, down, down, up)
Business strategy should be designed to match: (2) - correct answer ✔✔(1) competitive forces
in the industry
(2) the firm's resources and capabilities
Cost- Quality Frontier graph: - correct answer ✔✔tradeoff between cost and quality= feasible
frontier
How to gain cost leadership? (2) - correct answer ✔✔(1) produce products/services at the
lowest cost & with features that are acceptable to customers
(2) focus on simplification, standardization, and continual cost reductions in input acquisition,
production, & distribution processes
When do the economies of scale exist? - correct answer ✔✔during a period of time if the
average total cost for a unit of production is lower at higher levels of output
What are 4 key drivers of cost advantage? - correct answer ✔✔(1) combine economy of scale &
learning curves
(2) scale comes down a given learning curve
(3) technology allows movement to steeper curve
(4) combination can leapfrog in competitive advantage
Define game plan. - correct answer ✔✔The ways in which a firm will compete against present
and future rivals within a particular business
What is the question to ask for a business strategy? - correct answer ✔✔How to compete?
What is the question to ask for a corporate strategy? - correct answer ✔✔In which markets to
compete?
What components make up a strategy diamond? - correct answer ✔✔economic logic, arenas,
vehicles, staging, differentiators
What questions are you addressing via vehicles? - correct answer ✔✔How will we get there?
-internal development?
- joint ventures?
- licensing/ franchising?
- alliances?
- acquisitions?
What questions are you addressing via arenas? - correct answer ✔✔Where will we be active (&
how much emphasis)?
- which product categories?
- which channels?
-which market segments?
- which geographic areas?
- which core technologies?
,- which value-creation strategies?
What questions are you addressing via differentiators? - correct answer ✔✔How will we win?
- image?
- customization?
- price?
- styling?
- product reliability?
- speed to market?
What questions are you addressing via staging? - correct answer ✔✔What will be our speed
and sequence of moves?
- speed of expansion?
- sequence of initiatives?
What questions are you addressing via economic logic? - correct answer ✔✔How will returns be
obtained?
- lowest costs through scale advantages?
- lowest costs through scope and replication advantages?
- premium prices due to unmatchable service?
- premium prices due to proprietary product features?
What is a value-based business strategy? (2) - correct answer ✔✔(1) The amount of value that a
firm can claim cannot exceed its added value under unrestricted bargaining
(2) The key to a firm's achieving a positive added value is the existence of a favorable
asymmetry between the firm and its competitors.
, What are the 4 routes to favorable asymmetry in value-based strategies - correct answer
✔✔Firm// Competitors
Willingness-to-pay
opp. cost
(up, down, down, up)
Business strategy should be designed to match: (2) - correct answer ✔✔(1) competitive forces
in the industry
(2) the firm's resources and capabilities
Cost- Quality Frontier graph: - correct answer ✔✔tradeoff between cost and quality= feasible
frontier
How to gain cost leadership? (2) - correct answer ✔✔(1) produce products/services at the
lowest cost & with features that are acceptable to customers
(2) focus on simplification, standardization, and continual cost reductions in input acquisition,
production, & distribution processes
When do the economies of scale exist? - correct answer ✔✔during a period of time if the
average total cost for a unit of production is lower at higher levels of output
What are 4 key drivers of cost advantage? - correct answer ✔✔(1) combine economy of scale &
learning curves
(2) scale comes down a given learning curve
(3) technology allows movement to steeper curve
(4) combination can leapfrog in competitive advantage
