Podcast
Questions and Answers
Which of the following are considered primary activities in the value chain?
Which of the following are considered primary activities in the value chain?
Which criterion is NOT associated with sustaining a competitive advantage?
Which criterion is NOT associated with sustaining a competitive advantage?
What type of resources are considered tangible?
What type of resources are considered tangible?
What is the focus of vertical links in value chain interrelations?
What is the focus of vertical links in value chain interrelations?
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Which of the following is a method of improving resource provision?
Which of the following is a method of improving resource provision?
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Which of the following is NOT a barrier to entry for new competitors in an industry?
Which of the following is NOT a barrier to entry for new competitors in an industry?
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What factor can decrease the likelihood of new entrants successfully entering an industry?
What factor can decrease the likelihood of new entrants successfully entering an industry?
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Which of the following correctly describes substitute products?
Which of the following correctly describes substitute products?
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What effect do established competitors' actions have on new entrants?
What effect do established competitors' actions have on new entrants?
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Which of the following describes a condition that may signal reprisals from established competitors?
Which of the following describes a condition that may signal reprisals from established competitors?
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What is the primary goal of strategic decisions in a firm?
What is the primary goal of strategic decisions in a firm?
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Which of the following contributions is NOT associated with the academic field of strategic management?
Which of the following contributions is NOT associated with the academic field of strategic management?
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What is one of the primary advantages of the ABC Model in strategic management?
What is one of the primary advantages of the ABC Model in strategic management?
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Which of the following is a component of strategic analysis?
Which of the following is a component of strategic analysis?
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What does the term 'internationalization' pertain to in strategic formulation?
What does the term 'internationalization' pertain to in strategic formulation?
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Which of the following is included in strategic performance evaluation?
Which of the following is included in strategic performance evaluation?
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Which theory is associated with understanding costs and incentives in strategic management?
Which theory is associated with understanding costs and incentives in strategic management?
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What is a significant problem identified in the ABC Model?
What is a significant problem identified in the ABC Model?
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What defines a firm's competitive environment?
What defines a firm's competitive environment?
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In a homogeneous competitive environment, what characteristic do firms share?
In a homogeneous competitive environment, what characteristic do firms share?
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What challenges might arise when defining a competitive environment?
What challenges might arise when defining a competitive environment?
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What is the primary concern when companies compete across different industries?
What is the primary concern when companies compete across different industries?
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Which of the following represents a heterogeneous competitive environment?
Which of the following represents a heterogeneous competitive environment?
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What should managers base their analysis of the competitive environment on?
What should managers base their analysis of the competitive environment on?
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Why is the concept of industry less relevant from a strategic perspective?
Why is the concept of industry less relevant from a strategic perspective?
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When companies from the same industry pursue different functions, what is the resulting competitive situation?
When companies from the same industry pursue different functions, what is the resulting competitive situation?
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What is the main conflict regarding corporate objectives within the firm?
What is the main conflict regarding corporate objectives within the firm?
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What does the Theory of Organizational Equilibrium suggest about a firm's objectives?
What does the Theory of Organizational Equilibrium suggest about a firm's objectives?
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What can happen if all stakeholder objectives are not fully met?
What can happen if all stakeholder objectives are not fully met?
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What is indicated as a priority objective for a firm in the face of stakeholder conflicts?
What is indicated as a priority objective for a firm in the face of stakeholder conflicts?
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Why is stakeholder analysis particularly relevant for firms?
Why is stakeholder analysis particularly relevant for firms?
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According to the content, which group tends to have the most influence over the firm's objectives?
According to the content, which group tends to have the most influence over the firm's objectives?
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What might happen if stakeholders are dissatisfied with the firm's objectives?
What might happen if stakeholders are dissatisfied with the firm's objectives?
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In the context of corporate governance, what does a successful negotiation among stakeholders aim to achieve?
In the context of corporate governance, what does a successful negotiation among stakeholders aim to achieve?
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What characterizes hypercompetitive industries?
What characterizes hypercompetitive industries?
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Which of the following is an external factor that can lead to changes in an industry?
Which of the following is an external factor that can lead to changes in an industry?
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How does industry segmentation benefit competitive analysis?
How does industry segmentation benefit competitive analysis?
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What is a strategic group in the context of industry segmentation?
What is a strategic group in the context of industry segmentation?
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What do maps of strategic groups illustrate?
What do maps of strategic groups illustrate?
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What is a limitation of the five-forces model in hypercompetitive industries?
What is a limitation of the five-forces model in hypercompetitive industries?
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Which of the following is NOT a typical characteristic considered in traditional industry segmentation?
Which of the following is NOT a typical characteristic considered in traditional industry segmentation?
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What is a consequence of an increasing pace of change in hypercompetitive industries?
What is a consequence of an increasing pace of change in hypercompetitive industries?
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Study Notes
Strategic Management
- Strategic management emerged in the 1960s.
- Pioneers include Chandler, Boston Consulting Group, Andrews, Ansoff, and Michael Porter.
- Strategic decisions aim to improve firm performance and competitiveness.
- The firm's environment, strategy, and performance are key aspects of strategic management.
- Stakeholders, including academics, business professionals, and consultants are involved.
Academic Contributions
- Economics (Agency Theory & Transaction Cost Theory)
- Industrial Organization
- Organization Theory
- Behavioral Sciences (Psychology)
- Strategic Management Society and its divisions (e.g., Strategy Section, ACEDE, Spanish Academy of Management)
Strategic Analysis
- Involves researching a company and its environment to create a strategy.
- Data relevant to the company's strategy is identified and evaluated.
Strategic Formulation
- Defines future direction and values
- Analyzes the internal and external environments
- Formulates clear objectives for the organization
- Develops robust strategies
- Involves comprehensive analysis and research
- Establishes a competitive advantage
Strategic Implementation
- Executing a plan to achieve desired goals
- Key to strategy implementation is feedback and status reports.
- Action-oriented process.
- Includes team participation.
- Strategy formulation plans require thorough communication.
Strategic Decisions
- Organizations experience high uncertainty due to globalization, artificial intelligence, and social/political challenges.
- Strategic decisions are complex, and need a holistic approach focusing on mission, value, vision, impact on the organization (people, management and environment), and network of outside relations.
Strategic Failure
- Poor diagnosis or failure to identify options.
- Incorrect defining of objectives.
- Lack of adaptability to necessary changes
- The organization's inability to stop declining from successes.
- Incorrect identification of the strategic process.
Levels of Strategy
- Corporate strategy: long-term objectives set by top management
- Business unit strategy: competitive advantage/segment focus
- Functional strategy: departmental approach (e.g, marketing, finance)
Phases/Process of Strategic Management
- Strategic Analysis
- Strategic Formulation
- Strategic Implementation
Responsibility for Strategy
- Top management (CEO and department heads) defines corporate strategy
- Board of Directors oversees the process and evaluates top management performance.
- Strategy & corporate development staff provides advice and analyzes information to assist top management.
Strategic Fit & Change
- Strategic fit is the alignment between context (environment & characteristics) & the chosen strategy.
- Strategic change is necessary, which the organization must adapt to the changing environments to avoid suffering consequences
Stakeholder Management
- Stakeholders include shareholders, managers, employees, and society.
- Organizational equilibrium results from negotiation and adjustment between different stakeholder objectives.
- Firms must recognize various stakeholder interests to achieve success and stability.
Corporate Governance
- Conflicts between firm management and shareholders' interests exist.
- Corporate governance mechanisms include mechanisms internal to the company (e.g., direct supervision, board of directors) and external mechanisms (e.g., market for corporate control, capital market, and labor market).
- There are significant ethical and legal considerations in corporate governance.
Analysis of General Environment
- Analysis considers the social and political systems, localizations, and economic or sector-based variables.
- This analysis may be based on models such as Porter's Diamond model.
- Factors such as technology development, globalization, and cultural change are critical factors to evaluate for the success of the firm.
Analysis of Competitive Environment
- Considering competitors, the scope of the industry, and alternative products for customers.
- Identification of substitute products, and competitive pressures
- Competitors and possible actions and reactions among competitors need to be analyzed.
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Description
Explore the foundations of strategic management, including its historical emergence in the 1960s and contributions from key theorists. Learn about strategic decisions that enhance firm performance and the importance of analyzing both internal and external environments. This quiz covers essential concepts and theories that shape strategic management today.
