Strategic Quiz 1 PDF

Question 1 Omar wants to open his own food truck but doesn't know anything about business. What is the best tool you will use for the strategic planning process? Answer: AFI strategy framework The AFI (Analyze-Formulate-Implement) framework is the best tool for strategic planning as it provides a s...

Question 1 Omar wants to open his own food truck but doesn't know anything about business. What is the best tool you will use for the strategic planning process? Answer: AFI strategy framework The AFI (Analyze-Formulate-Implement) framework is the best tool for strategic planning as it provides a structured approach to analyzing competition, formulating strategies, and implementing them. Question 2 RubADub, Inc. is a company that manufactures hot tubs. Which of the following best illustrates a product-oriented vision for RubADub, Inc.? Answer: To be the pioneering manufacturer of hot tubs A product-oriented vision focuses specifically on the product rather than the broader impact or purpose. Question 3 Aisha is trying to determine if her company has a competitive advantage. What is the second task? Answer: Compare and benchmark her firm's performance to other competitors in her same industry. Benchmarking against competitors helps in understanding relative performance and identifying a competitive advantage. Question 4 Frozen Gold has an edge through unique flavors and a cool atmosphere. What concept best describes their success? Answer: Their core business competencies. Core competencies are unique capabilities that differentiate a company from its competitors, such as unique flavors and a distinct store atmosphere. Question 5 Bill's Auto & Airplane Repair shop generates an industry-average net income of $10,000 a week. What can we conclude? Answer: Correct-competitive parity is achieved by generating average returns, relative to competition in a given industry. Competitive parity is when a company generates average returns in comparison to its competitors. Question 6 The CEO of All Star Corp. has decided to enter emerging markets like China and Brazil. Which strategy does this scenario illustrate? Answer: Corporate strategy Corporate strategy involves decisions on the overall scope and direction of a company, including expansion into new markets. Question 7 Chris wants to encourage his employees to start contributing to strategy formulation. What step should he take? Answer: Designate Thursday afternoons as time for employees to pursue outside interests loosely related to the business. This approach encourages creativity and employee involvement in the strategic process. Question 8 Which of the following best describes strategic commitments? Answer: Actions that are long-term-oriented. Strategic commitments involve significant long-term investments that are difficult to reverse. Question 9 Tony’s pizza shop nets $10,000 a week, while his competitors net more. Who has a competitive advantage? Answer: Anthony's Pizza Palace - competitive advantage is only achieved by generating above average returns, relative to competition. Competitive advantage is defined by generating returns above the industry average. Question 10 Teach for America founder Wendy Kopp's vision. What is the phrase that best represents the vision? Answer: To give all children in the United States the opportunity to attain an excellent education. This vision emphasizes providing quality education opportunities to all children. Question 11 Best Clothing Corp. is planning for future situations like a rise in the prices of raw materials. What strategic planning approach does this describe? Answer: Scenario planning Scenario planning involves preparing for various future events to ensure readiness if they occur. Question 12 What concept best describes Amazon's network of distribution centers? Answer: Core competency Efficient distribution is a core competency that gives Amazon a competitive edge in delivery times. Question 13 Which refers to barriers to entry in the airline industry? Answer: The threat of new entrants Barriers to entry represent obstacles that new firms face when trying to enter an industry. Question 14 Southwest and Alaska Airlines draw upon different resource bundles. Which assumption does this illustrate? Answer: Resource heterogeneity Resource heterogeneity suggests that firms have different resources, leading to different strategies and competitive advantages. Question 15 Sayed is analyzing economic factors. Which could he identify as an economic factor? Answer: The stage of the business cycle that the country is in. Economic factors include elements like the business cycle stage, which affects business opportunities and risks. Question 16 Which best represents a customer-oriented vision statement? Answer: "We provide solutions to professional communication needs." A customer-oriented vision focuses on fulfilling customer needs and providing value to them. Question 17 Shad uses a top-down approach in a chaotic self-driving vehicle industry. What is wrong with this scenario? Answer: The top-down approach is not effective because self-driving vehicle industry is changing too much. A top-down approach lacks the flexibility needed in a rapidly changing and uncertain industry. Question 18 Dimitre Corp. gains an advantage through relationships with employees, customers, suppliers, and communities. What best describes this? Answer: Stakeholder strategy Dimitre Corp.'s approach focuses on creating value for all stakeholders, which helps in building a sustainable competitive advantage. Question 19 (Short answer question - 10 points) Every successful organization has a strategy. This strategy has to be clear, simple, short, but also must be justified by a few strategic choices. Elements of a Good Strategy for an Organization: 1. Diagnosis of the Situation: Identify and analyze the current situation, including challenges and opportunities. 2. Guiding Policy: Set a guiding policy to address the diagnosed challenges and opportunities. It should provide an overall approach. 3. Coherent Actions: Implement a set of coherent actions that effectively support the guiding policy. Organization Selected: Amazon o Reason for Selection: Amazon is well known for its strategic approach to being customer-centric and leveraging technology for efficient operations. Definition of Strategy Concept: o Strategy refers to a plan of action designed to achieve a long-term or overall goal. It provides direction and sets priorities to gain a competitive advantage. Three Elements of a Good Strategy: 1. Diagnosis of the Situation: Involves understanding the external environment, identifying problems, and recognizing opportunities. 2. Guiding Policy: Provides a clear approach to tackling the diagnosed challenges. 3. Coherent Actions: Refers to specific steps taken to implement the guiding policy and achieve strategic objectives. Application to Amazon: 1. Diagnosis: Amazon diagnosed inefficiencies in the traditional retail market and recognized the opportunity to capitalize on e-commerce growth. 2. Guiding Policy: Amazon focused on a customer-centric approach and scalability to offer a wide range of products at low prices. 3. Coherent Actions: Amazon invested in efficient distribution networks, improved delivery services, and created value-added services like Prime. Examples to Justify Strategy: o Prime Membership: By offering expedited shipping and exclusive deals, Amazon ensures customer loyalty and satisfaction. o Data-Driven Personalization: Leveraging user data to provide personalized product recommendations enhances customer experience and increases sales. Question 20 (5 points) Instagram's Corporate Mission Answer: B) To give people the power to build community and bring the world closer together.  Organization's Mission: o A mission statement defines the purpose of an organization, outlining what it does, whom it serves, and its objectives. Explanation for Selecting Instagram's Mission: o The answer "To give people the power to build community and bring the world closer together" aligns with Instagram's purpose of connecting people and promoting social engagement. o Why Not Other Answers: § Option A ("By transforming photos into professional-looking snapshots") and Option C ("To transform photos into professional-looking snapshots") are too narrow, focusing only on the feature rather than the overall mission of community building. Support with Example: o Instagram's Explore tab and personalized feeds aim to bring people closer by connecting them to relevant content, making community building the primary focus. Question 21 (5 points) Most Important Instagram Stakeholder Answer: C) Users of the Instagram's platform who communicate mainly through photos and videos. Stakeholder Concept: o A stakeholder is any individual or group that has an interest in the success and activities of an organization. Stakeholders can affect or be affected by the organization's actions. Explanation for Selecting Stakeholder: o Users are the most important stakeholders because they create the content that drives Instagram’s engagement. Without active users, Instagram would not be able to attract advertisers or generate revenue. o Why Not Other Answers: § Option A (shareholders) and Option B (advertisers) are important, but they depend on the platform’s user base for success. Support with Example: o Advertisers buy ads based on the active engagement of users. Therefore, user engagement is critical to Instagram's success. Question 22 (5 points) Most Relevant Example of Porter's Five Forces in Instagram's Mini-Case Answer: C) Threat of products which can substitute Instagram's platform. Porter's Five Competitive Forces: o Porter's model includes five forces that influence industry attractiveness and profitability:  1. Threat of New Entrants 2. Bargaining Power of Suppliers 3. Bargaining Power of Buyers 4. Threat of Substitute Products or Services 5. Competitive Rivalry Explanation for Selecting Competitive Force: o The threat of substitutes is relevant because Instagram operates in a highly competitive social media market, with other platforms like TikTok or Snapchat that can easily attract users away. o Why Not Other Answers: § Option A (bargaining power of suppliers) is not applicable, as Instagram’s primary "suppliers" are software providers with limited bargaining power. § Option B (bargaining power of buyers) is relevant but not as significant as the threat of substitutes in the competitive social media landscape. Support with Example: o If users leave Instagram for new platforms, this would be a threat to its user engagement, making the threat of substitutes a critical force in the competitive environment.