Global Economy and Competitive Advantage
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Questions and Answers

What is the reason why customers prefer to purchase from a global competitor rather than a domestic firm?

  • The global company's brand is well-known
  • The global company has a strong marketing strategy
  • The global company's product is cheaper
  • The global company's product is superior (correct)

    • What is a key source of competitive advantage in the global economy?

  • Financial resources
  • Technological infrastructure
  • Marketing strategies
  • Employees (correct)

    • What is required for companies to earn above-average returns in the 21st century?

  • Merging with other companies
  • Meeting local standards
  • Innovating new products
  • Meeting global standards (correct)

    • What is the result of the increasing rate of technology diffusion?

    <p>Increased competition</p> Signup and view all the answers

    How long did it take for the telephone to reach 25% of all homes in the United States?

    <p>35 years</p> Signup and view all the answers

    What is one way in which technological changes have impacted individual firms and industries?

    <p>Shift from physical to electronic movie rentals</p> Signup and view all the answers

    What is one category of technology-related trends and conditions?

    <p>Technology diffusion and disruptive technologies</p> Signup and view all the answers

    What is the name given to the current economic environment with many important countries having unique interests and environments?

    <p>Multi-polar world</p> Signup and view all the answers

    What drives firms to aggressively challenge their competitors in a hypercompetitive market?

    <p>The desire to improve their competitive position</p> Signup and view all the answers

    What is a global economy characterized by?

    <p>Goods and services moving freely across geographic borders</p> Signup and view all the answers

    What is globalization a product of?

    <p>A large number of firms competing against one another</p> Signup and view all the answers

    What is a result of globalization?

    <p>An increase in the range of opportunities for companies</p> Signup and view all the answers

    Why is it important for firms engaging in globalization to make culturally sensitive decisions?

    <p>To avoid cultural conflicts</p> Signup and view all the answers

    What is a challenge faced by highly globalized firms?

    <p>Ever-increasing complexity in operations</p> Signup and view all the answers

    What has been the result of globalization on performance standards?

    <p>An increase in performance standards</p> Signup and view all the answers

    What is an example of a company that has engaged in globalization?

    <p>Starbucks</p> Signup and view all the answers

    What is the primary goal of a firm's strategy implementation?

    <p>To achieve strategic competitiveness and above-average returns</p> Signup and view all the answers

    What has become increasingly challenging due to advances in technology?

    <p>Determining the boundaries of an industry</p> Signup and view all the answers

    What is a result of effective strategic actions in the context of carefully integrated strategy formulation and implementation efforts?

    <p>Positive performance</p> Signup and view all the answers

    Why is the pace of change relentless and ever-increasing in many industries?

    <p>Due to the increasing volatility of markets</p> Signup and view all the answers

    What has changed the competitive landscape of the entertainment industry?

    <p>Advances in interactive computer networks and telecommunications</p> Signup and view all the answers

    What is the primary role of the strategy portion of the model?

    <p>Strategy formulation and implementation</p> Signup and view all the answers

    What is the outcome of a dynamic strategic management process?

    <p>Strategic competitiveness and above-average returns</p> Signup and view all the answers

    What is a recent development in the entertainment industry?

    <p>Telecommunication companies are moving into the entertainment business</p> Signup and view all the answers

    What is the main assumption of the resource-based model of above-average returns?

    <p>Each organization is a collection of unique resources and capabilities.</p> Signup and view all the answers

    What are resources classified into?

    <p>Three categories: physical, human, and organizational capital</p> Signup and view all the answers

    What is a capability in the resource-based model?

    <p>The capacity for a set of resources to perform a task or an activity in an integrative manner</p> Signup and view all the answers

    What are core competencies?

    <p>Capabilities that serve as a source of competitive advantage</p> Signup and view all the answers

    What is an example of a core competency?

    <p>Apple's R&amp;D function</p> Signup and view all the answers

    According to the resource-based model, what is the primary reason for differences in firms' performances across time?

    <p>Firms' unique resources and capabilities</p> Signup and view all the answers

    What is a resource in the resource-based model?

    <p>Inputs into a firm's production process, such as capital equipment, the skills of individual employees, patents, finances, and talented managers</p> Signup and view all the answers

    Can individual resources alone yield a competitive advantage?

    <p>No, but they can be a source of competitive advantage when formed into a capability</p> Signup and view all the answers

    What is a common feature among Netflix and other streaming content providers like Amazon?

    <p>They produce their own content</p> Signup and view all the answers

    What is the impact of social media advertising on traditional competitive advantages?

    <p>It has reduced their effectiveness</p> Signup and view all the answers

    What is required for a firm to be strategically competitive in today's business world?

    <p>A mind-set that values flexibility and innovation</p> Signup and view all the answers

    What is the consequence of failure for firms in today's competitive landscape?

    <p>Severe consequences</p> Signup and view all the answers

    What does the effective use of the strategic management process do for firms?

    <p>Reduces the likelihood of failure</p> Signup and view all the answers

    What is hypercompetition characterized by?

    <p>Excessive competition that creates inherent instability</p> Signup and view all the answers

    What drives hypercompetition according to the text?

    <p>The dynamics of strategic maneuvering among global and innovative combatants</p> Signup and view all the answers

    What is one of the forms of competition that occurs in hypercompetition?

    <p>Competition to create new know-how and establish first-mover advantage</p> Signup and view all the answers

    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.

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    Description

    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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