Strategic Management

What is strategic competitiveness?

• When a firm faces losses

• When a firm achieves average returns

• When a firm fails to implement any strategy

• When a firm successfully formulates and implements a value creating strategy

What is strategy?

• A random set of actions taken by a firm

• An integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage

• A strategy to achieve average returns

• A strategy to minimize risks

What is competitive advantage?

• When a firm faces intense competition

• When a firm fails to create value for customers

• When a firm has average returns

• When a firm creates superior value for customers and competitors are not able to imitate the value

What are above-average returns?

• Returns in excess of what an investor expects to earn from other investments with a similar amount of risk

• Returns that are unpredictable

• Returns that are lower than expected

• Returns equal to what an investor expects from other investments

What is the I/O model of above-average returns based on?

• Analysis of macroeconomic factors

• Analysis of factors contributing to a firm's overall strategy and product placement

• Analysis of internal resources of a firm

• Analysis of customer preferences

What are resources in the resource-based model?

• Inputs into a firm's production processes such as capital equipment, skills of employees, patents, and finances

• Outputs of a firm's production processes

• External factors affecting a firm

• Competitors' resources

What is vision in a firm?

• A marketing strategy

• A short-term goal

• A detailed financial plan

• A picture of what the firm wants to be and achieve

Who are stakeholders in a firm?

• Individuals, groups, and organizations that can affect the firm's vision and mission

• Only the shareholders

• Only the employees

• Only the customers

What do strategic leaders do?

• Avoid change

• Select actions to help the firm achieve its vision and mission

• Only focus on short-term profits

• Ignore the competitive landscape

What is the strategic management process?

• A random set of decisions taken by a firm

• A process to avoid risks

• The full set of commitments, decisions, and actions firms take to achieve strategic competitiveness and earn above-average returns

• A process to achieve average returns