Essentials of Strategic Management, 3rd Edition Chapter 1 The Strategy-Making Process Name: __________________________ Date: _____________ 1. T F A strategy can be defined as a set of related actions that managers take to increase their company's performance relative to rivals. ANS: True PTS: 1 REF: 2 NAT: AACSB Analytic | AACSB Strategy 2. T F If a company's strategy does result in superior performance, it is said to have a competitive advantage. ANS: True PTS: 1 REF: 2 NAT: AACSB Analytic | AACSB Strategy 3.
What are the company’s key resources and competitive capabilities? What competitive liabilities and resource weaknesses does it have? What opportunities exist? What threats to its continued success are present? 7.
Buyer power tends to be higher if suppliers provide undifferentiated or standard products. 3. Porter's five forces model helps to determine both the nature of competition in an industry and the industry's profit potential. 4. If all of Porter's five competitive forces for an industry are weak (low), then established companies in the industry have the potential to raise prices and earn higher returns.
Explain. 5 Which of the company’s resources and capabilities have the greatest competitive power? Are Coach’s resources and capabilities (1) competitively valuable, (2) rare, (3) difficult to copy, and (4) not easily be trumped by the substitute resources of rival firms. How well do Coach’s resources and capabilities match up with the industry’s key success factors? 7 What is your appraisal of Coach’s financial performance based on the data in case Exhibits 1,2 and 3?
C. Profit maximization does consider the impact on individual shareholder's EPS. D. Profit maximization is concerned more with maximizing net income than the stock price. 6. __________ is concerned with the branch of economics relating the behavior of principals and their agents. A.
Listo System is finding hard to differentiate itself in product and price from its competitors Power Shift to Buyer During 1990s, Listo was a great success. Listo inabilities to differentiate itself from the competitors jeopardize that success. If Listo had been able to differentiate and create competitive advantage, it would have created loyal customers and strong brand image. Creating loyal customers and strong brand image would help to keep bargain power to the seller. However, inability of Listo to differentiate shifts the bargaining power to Buyer.
6. What are the company’s key resources and competitive capabilities? What competitive liabilities and resource weaknesses does it have? What opportunities exist? What threats to its continued success are present?
This term can be described as reason for a superior performance. Competitive advantages therefore explain why the company happened to perform better than its competitors.] Progressive’s good performance has mainly three reasons. First, its superior risk algorithms, second, the major shift to a customer-centric organization including the implementation of its fast service program and third, its high performing personnel. For an insurance company it is key to finely segment customers in order to give them appropriate rates.
6) Competitive Matching * Designed to match or beat competitor's prices. The goal is to maintain the perception of good value relative to the competition. 7) Prestige * Sets high prices that are consistent with a prestige or high status product. Prices are set with little regard for the firm's cost structure or the competition. 8) Status Quo * Maintains current prices in an effort to sustain a position relative to the competition.