40 Questions
What is the reason why customers prefer to purchase from a global competitor rather than a domestic firm?
The global company's product is superior
What is a key source of competitive advantage in the global economy?
Employees
What is required for companies to earn above-average returns in the 21st century?
Meeting global standards
What is the result of the increasing rate of technology diffusion?
Increased competition
How long did it take for the telephone to reach 25% of all homes in the United States?
35 years
What is one way in which technological changes have impacted individual firms and industries?
Shift from physical to electronic movie rentals
What is one category of technology-related trends and conditions?
Technology diffusion and disruptive technologies
What is the name given to the current economic environment with many important countries having unique interests and environments?
Multi-polar world
What drives firms to aggressively challenge their competitors in a hypercompetitive market?
The desire to improve their competitive position
What is a global economy characterized by?
Goods and services moving freely across geographic borders
What is globalization a product of?
A large number of firms competing against one another
What is a result of globalization?
An increase in the range of opportunities for companies
Why is it important for firms engaging in globalization to make culturally sensitive decisions?
To avoid cultural conflicts
What is a challenge faced by highly globalized firms?
Ever-increasing complexity in operations
What has been the result of globalization on performance standards?
An increase in performance standards
What is an example of a company that has engaged in globalization?
Starbucks
What is the primary goal of a firm's strategy implementation?
To achieve strategic competitiveness and above-average returns
What has become increasingly challenging due to advances in technology?
Determining the boundaries of an industry
What is a result of effective strategic actions in the context of carefully integrated strategy formulation and implementation efforts?
Positive performance
Why is the pace of change relentless and ever-increasing in many industries?
Due to the increasing volatility of markets
What has changed the competitive landscape of the entertainment industry?
Advances in interactive computer networks and telecommunications
What is the primary role of the strategy portion of the model?
Strategy formulation and implementation
What is the outcome of a dynamic strategic management process?
Strategic competitiveness and above-average returns
What is a recent development in the entertainment industry?
Telecommunication companies are moving into the entertainment business
What is the main assumption of the resource-based model of above-average returns?
Each organization is a collection of unique resources and capabilities.
What are resources classified into?
Three categories: physical, human, and organizational capital
What is a capability in the resource-based model?
The capacity for a set of resources to perform a task or an activity in an integrative manner
What are core competencies?
Capabilities that serve as a source of competitive advantage
What is an example of a core competency?
Apple's R&D function
According to the resource-based model, what is the primary reason for differences in firms' performances across time?
Firms' unique resources and capabilities
What is a resource in the resource-based model?
Inputs into a firm's production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers
Can individual resources alone yield a competitive advantage?
No, but they can be a source of competitive advantage when formed into a capability
What is a common feature among Netflix and other streaming content providers like Amazon?
They produce their own content
What is the impact of social media advertising on traditional competitive advantages?
It has reduced their effectiveness
What is required for a firm to be strategically competitive in today's business world?
A mind-set that values flexibility and innovation
What is the consequence of failure for firms in today's competitive landscape?
Severe consequences
What does the effective use of the strategic management process do for firms?
Reduces the likelihood of failure
What is hypercompetition characterized by?
Excessive competition that creates inherent instability
What drives hypercompetition according to the text?
The dynamics of strategic maneuvering among global and innovative combatants
What is one of the forms of competition that occurs in hypercompetition?
Competition to create new know-how and establish first-mover advantage
Study Notes
Globalization and Technological Changes
- Firms competing in the global economy must meet or exceed global standards to earn above-average returns.
- Workers flow freely among global economies, making employees a key source of competitive advantage.
- Managers must learn to operate in a "multi-polar" world with many important countries having unique interests and environments.
Technology and Technological Changes
- Technology trends and conditions can be categorized into: technology diffusion and disruptive technologies, the information age, and increasing knowledge intensity.
- The rate of technology diffusion has increased significantly over the past 15-20 years.
- Examples of technology diffusion rates: telephone (35 years), TV (26 years), radio (22 years), PCs (16 years), Internet (7 years).
The Competitive Landscape
- The fundamental nature of competition in many industries is changing.
- Markets are increasingly volatile, and the pace of change is relentless.
- Advances in interactive computer networks and telecommunications have blurred the boundaries of the entertainment industry.
- Cable companies, satellite networks, telecommunications companies, and internet-only streaming services are competing for entertainment revenue.
Hypercompetition
- Hypercompetition describes excessive competition that creates inherent instability and necessitates constant disruptive change.
- It results from the dynamics of strategic maneuvering among global and innovative combatants.
- Firms aggressively challenge their competitors to improve their competitive position and ultimately their performance.
The Global Economy
- A global economy is characterized by the free flow of goods, services, people, skills, and ideas across geographic borders.
- Globalization increases the range of opportunities for companies competing in the current competitive landscape.
- Firms engaging in globalization must make culturally sensitive decisions when using the strategic management process.
Resource-Based Model of Above-Average Returns
- The resource-based model assumes that each organization is a collection of unique resources and capabilities.
- A firm's resources are classified into three categories: physical, human, and organizational capital.
- Resources are either tangible or intangible in nature.
- Individual resources alone may not yield a competitive advantage; capabilities are formed when resources are integrated.
- Core competencies are capabilities that serve as a source of competitive advantage for a firm over its rivals.
This quiz covers the impact of globalization on domestic firms, the role of global competitors, and the significance of workers in gaining a competitive edge. Learn how managers can operate effectively in a multi-polar world.
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