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Questions and Answers
What does the term 'storming the castle' signify in entrepreneurial context?
'Storming the castle' signifies entrepreneurs embarking on business ventures with a focus on action and adaptability, often lacking extensive formal planning.
What statistical evidence did the authors find regarding business planning and firm performance?
The authors found evidence that planning benefits established firms more than new firms, and that cultural context, specifically lower uncertainty avoidance, plays a significant role.
According to the S-curve hypothesis, how does international diversification initially affect firm performance?
The S-curve hypothesis suggests that international diversification initially incurs costs, which may lead to lower performance before enhancing benefits and performance later on.
What are some liabilities a firm must overcome when entering foreign markets?
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What role do complementary assets play in the appropriation of economic rents from innovation?
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Identify one factor that moderates the relationship between international diversification and firm performance.
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What is the overall value of business planning according to the discussed perspectives?
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What does the meta-analysis conclude about the significance of firm development stage in business planning?
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What does VRIN stand for in the Resource Based View of organizations?
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Identify two reasons firms struggle to respect their stakeholders despite their importance for growth.
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What is the primary focus of the Service-Dominant Logic proposed by Scherer et al.?
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Describe the shape of the relationship between diversification and firm performance according to the provided content.
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How do customer characteristics moderate the relationship between service proposition types and customer retention?
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Why do firms with significant intellectual property prefer related diversification?
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What is the mediating role proposed by Scherer et al. regarding technology-based self-service?
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What might cause firms to undervalue stakeholder engagement despite recognizing its importance?
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How would Sawhney et al. categorize Amazon's move into logistics services?
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Which argument is NOT used to explain a positive relationship between product-service portfolio relatedness and financial performance?
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Study Notes
Business Planning for Firm Performance
- Business planning benefits established firms more than new ones
- Planning benefits firms more in cultures with lower uncertainty avoidance
- Business planning benefits firm performance despite its complexity
International Diversification and Firm Performance
- The relationship between international diversification and firm performance can be best described by an "S-curve"
- Firms entering foreign markets must overcome liabilities such as local market conditions, cultural differences, and foreign regulations
- Resource fungibility is a moderator in the relationship between international diversification and firm performance
Innovation vs. Imitation
- Innovators benefit more from strong appropriability regimes when complementary assets are tightly held
- Factors influencing intellectual property rights preferences include:
- Innovation's nature
- Industry practices
- Legal protection strength
Stakeholder- vs.Shareholder-Oriented Growth
- Resources are considered VRIN when they are Valuable, Rare, Inimitable, and Non-substitutable
- Imitating close stakeholder relationships is difficult due to:
- Pattern dependency
- Causal ambiguity
- Social complexity
- Firms may not prioritize stakeholders despite their importance due to:
- Short-term financial pressures
- Misalignment between firm strategies and perceived benefits of stakeholder engagement
Growing with Technology Enabled Self-services or Employee Provided Services
- Scherer et al. (2015) proposed a model where technology-based self-service increases customer satisfaction, leading to improved customer retention
- The Service-Dominant Logic explains that value is co-created through interactions between providers and customers
- Moderators between service proposition types and customer retention include:
- Customer characteristics (age, tech-savviness)
- Contextual factors (competitive intensity, service complexity)
Related vs. Unrelated Diversification
- The relationship between relatedness of diversification and firm performance is an "Inverted U" shape
- Firms with substantial intellectual property primarily invest in related diversification for maximizing knowledge utilization
- Coordination costs are not a commonly cited argument for a positive linear relationship between product portfolio relatedness and financial performance
Growing with Products or Services
- Sawhney et al. (2004) would describe Amazon's strategic move into logistics as leveraging operational capabilities to transform a cost center into a profit center
- Amazon's strategy is categorized as "service infusion" within the Service Opportunity Matrix, leveraging logistics expertise beyond core e-commerce to other companies
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Description
Explore the intricate relationships between business planning, international diversification, and innovation strategies. Understand how these factors influence firm performance in various market conditions. This quiz delves into the complexities and dynamics that firms face in a competitive business environment.