Competitive Strategy
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Course Introduction
Competitive Strategy explores the frameworks and analytical tools that businesses use to gain and sustain competitive advantage in dynamic markets. The course examines concepts such as industry analysis, value creation, differentiation, cost leadership, and the strategic positioning of firms. Through case studies and real-world examples, students will learn how firms respond to competitive forces, anticipate threats, and leverage their unique resources and capabilities to achieve superior performance. Emphasis is placed on decision-making at the business unit and corporate level, fostering a strategic mindset necessary for navigating complex and competitive environments. Recommended Textbook
Crafting and Executing Strategy Concepts and Cases 18th Edition by Arthur Thompson
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Chapter 1: What Is Strategy and Why Is It Important
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Q1) Is it more accurate to think of strategy as being "proactive" or as being "reactive?" Why?
Answer: Answer will vary
Q2) Crafting and executing strategy are top-priority managerial tasks because
A) working their way through the tasks of crafting and executing strategy helps top executives create tight fits between a company's strategic vision and business model.
B) all company personnel, and especially senior executives, need to know the answer to "who are we, what do we do, and where are we headed?"
C) there is a compelling need for managers to proactively shape how the company's business will be conducted and because a strategy-focused enterprise is more likely to be a stronger bottom-line performer than a company whose management views strategy as secondary and puts its priorities elsewhere.
D) without clear guidance as to what the company's business model and strategic intent are, managerial decision-making is likely to be rudderless.
E) how well executives perform these tasks are the key determinants of executive compensation.
Answer: C
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Chapter 2: Charting a Companys Direction: Vision and Mission,
Objectives, and Strategy
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Q1) What a company's top executives are saying about where the company is headed and about what the company's future product-customer-market-technology will be
A) indicates what kind of business model the company is going to have in the future.
B) constitutes their strategic vision for the company.
C) signals what the firm's strategy will be.
D) serves to define the company's mission.
E) indicates what the company's long-term strategic plan is.
Answer: B
Q2) Why does an organization need both financial and strategic objectives?
Answer: Answer will vary
Q3) A set of "stretch" financial and strategic objectives
A) pushes the company closer to true profit maximization.
B) helps create a "balanced scorecard" for judging company performance.
C) helps convert the mission statement into meaningful company values.
D) challenges company personnel to execute the strategy with greater proficiency.
E) is an effective tool for avoiding ho-hum results.
Answer: E
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Chapter 3: Evaluating a Companys External Environment
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Q1) The real payoff for strategy making comes when managers draw conclusions about A) what strategy adjustments are needed to deal with the changes in conditions.
B) determining the overall strength of the five competitive forces.
C) determining whether the industry's strategic group map will be static or dynamic.
D) conditions in the economy at large.
E) the extent to which rivals have more than two competitively valuable competencies or capabilities
Answer: A
Q2) In mapping strategic groups
A) one strategic variable and one financial variable should be used as axes for the map.
B) it is important for the variables used as axes to be highly correlated.
C) the best variables to use as axes for the map are those that differentiate how rivals have positioned themselves in the marketplace.
D) it is important to use price as the variable for the vertical axis.
E) the primary objective is to determine which strategic groups are profitable and which are not.
Answer: C
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Chapter 4: Evaluating a Companys Resources, Capabilities, and Competitiveness
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Q1) What are the three parameters of conducting a SWOT analysis?
Q2) Identify the six questions that form the framework of evaluating a company's resources and competitive position.
Q3) Which one of the following is inaccurate as concerns a distinctive competence?
A) A distinctive competence is a competitively important activity that a company performs better than its competitors.
B) A distinctive competence is typically less difficult for rivals to copy than a core competence.
C) A distinctive competence can be a basis for sustainable competitive advantage.
D) A distinctive competence can underpin and add real punch to a company's strategy.
E) A distinctive competence gives a company competitively valuable capability that is unmatched by rivals.
Q4) Draw a typical company value chain and briefly explain why the proficiency with which a firm performs the activities comprising its value chain matters.
Q5) Explain the difference between a company competence,a core competence,and a distinctive competence.
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Chapter 5: The Five Generic Competitive Strategies: Which
One to Employ
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Q1) Which of the following is not one of the five generic types of competitive strategy?
A) A low-cost provider strategy
B) A broad differentiation strategy
C) A best-cost provider strategy
D) A focused low-cost provider strategy
E) A market share dominator strategy
Q2) Successful differentiation allows a firm to
A) be the industry's best-cost provider.
B) set the industry ceiling on price.
C) avoid being dragged into a price war with industry rivals and not be overly concerned about whether entry barriers into the industry are high or low.
D) command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand.
E) take sales and market share away from rivals by undercutting them on price.
Q3) What are the five generic competitive strategies? Briefly describe each one and identify the type of competitive advantage that each strategy is aimed at achieving.
Q4) What are the keys to sustaining a focused low-cost strategy?
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Chapter 6: Strengthening a Companys Competitive
Position: Strategic Moves, timing, and Scope of Operation
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Q1) Which of the following is not a potential advantage of backward vertical integration?
A) Reduced vulnerability to powerful suppliers (who may be inclined to raise prices at every opportunity)
B) Reduced risks of disruptions in obtaining crucial components or support services
C) Reduced costs
D) Reduced business risk because of controlling a bigger portion of the overall industry value chain
E) Adding to a company's differentiation capabilities and perhaps achieving a differentiation-based competitive advantage
Q2) Identify and briefly discuss four disadvantages of a vertical integration system.
Q3) Which of the following is NOT a purpose of a defensive strategy?
A) To increase the risk of having to defend an attack.
B) To weaken the impact of any attack that occurs.
C) To pressure challengers to aim their efforts at other rivals.
D) To help protect a competitive advantage.
E) To decrease the risk of being attacked.
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Chapter 7: Strategies for Competing in International Markets
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Q1) When a company operates in the markets of two or more different countries,its foremost strategic issue is
A) whether to use strategic alliances to help defeat its rivals.
B) whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.
C) whether to maintain a national (one-country) manufacturing base and export goods to the other countries.
D) choosing which foreign companies to team up with via strategic alliances or joint ventures.
E) whether to test the waters with an export strategy before committing to some other competitive approach.
Q2) The reasons why a company opts to expand outside its home market include
A) gaining access to new customers for the company's products/services.
B) spreading its business risk across a wider market base.
C) achieving lower costs and enhancing the company's competitiveness.
D) a desire to capitalize on its core competencies and capabilities.
E) All of these.
Q3) Briefly identify the special features of competing in foreign markets.
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Chapter 8: Corporate Strategy: Diversification and the
Multibusiness Company
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Q1) Which one of the following is not one of the elements of crafting corporate strategy for a diversified company?
A) Picking new industries to enter and deciding on the means of entry
B) Choosing the appropriate value chain for each business the company has entered
C) Pursuing opportunities to leverage cross-business value chain relationships and strategic fits into competitive advantage
D) Establishing investment priorities and steering corporate resources into the most attractive business units
E) Initiating actions to boost the combined performance of the businesses the firm has entered
Q2) Shareholder interests are generally best served by concentrating corporate resources on businesses that can contend for market leadership. Explain your answer.
A)True
B)False
Q3) Which is the better approach to diversification-a strategy of related diversification or a strategy of unrelated diversification? Explain and support your answer.
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Chapter 9: Ethics, Corporate Social Responsibility,
Environmental Sustainability, and Strategy
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Q1) The litmus test of a company's code of ethics is
A) the degree to which it is connected to a company's statement of core values.
B) the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business.
C) the extent to which a company's approach to ethical behavior mirrors the ethical principles for society at large.
D) based on the rules a company's top management and board of directors make about "what is right" and "what is wrong."
E) determined by the ethical behaviors expected of company personnel in the course of doing their jobs.
Q2) Identify and briefly describe any three of the four approaches to managing a company's ethical conduct.
Q3) What is the case for why business strategies should be ethical?
Q4) What is the essence of the moral case for why a company should engage in socially responsible actions and environmentally sustainable business practices?
Q5) What is the essence of the business case for why a company should engage in socially responsible actions and environmentally sustainable business practices?
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Chapter 10: Building an Organization Capable of Good
Strategy Execution: People, Capabilities, and Structure
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Q1) Management's handling of the strategy implementation/execution process can be considered successful
A) when the internal organization develops 2 or more core competencies in performing value chain activities.
B) if and when the company meets or beats its performance targets and shows good progress in achieving its strategic vision for the company.
C) if the company's culture is strong and strategy-supportive.
D) if management is able to marshal adequate resources to put the strategy in place within 6-12 months.
E) if managers and employees express strong support for the company's strategy and long-term direction.
Q2) What are the advantages of outsourcing non-critical and sometimes even critical value chain activities?
Q3) Identify and discuss the basic tenets,the chief advantages,and the chief disadvantages of decentralized organizational structures.
Q4) A decentralized organization structure is more likely to further the cause of good strategy execution than is a centralized organization structure. Justify your answer.
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Chapter 11: Managing Internal Operations: Actions That
Promote Good Strategy Execution
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Q1) To build a total quality culture and achieve full value from the use of TQM or Six Sigma initiatives,managers can take such action steps as
A) signaling unequivocal and unyielding commitment to total quality and operating excellence; encouraging quality-supportive behaviors on the part of employees, empowering employees to make changes to improve quality; and using online systems to give employees immediate access to best practice information and experiences.
B) requiring all company personnel to attend Six Sigma training programs and achieve "black belt" status.
C) instituting greater centralization of decision-making to help enforce strict compliance with quality control policies and procedures.
D) stressing 100% accurate individual performance rather than group or team performance.
E) dismissing employees who repeatedly fail to achieve 100% accuracy in their work after a 12-month trial period.
Q2) The use of incentives and rewards is the single most powerful tool at management's disposal to win strong employee commitment to carrying out the strategic plan.True or false? Explain.
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Chapter 12: Corporate Culture and Leadership: Keys to Good Strategy Execution
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Q1) Which of the following is not one of the leadership roles that senior managers have to play in pushing for good strategy execution and operating excellence?
A) Learning the obstacles in the path of good execution and clearing the way for progress.
B) Being out in the field, seeing how well operations are going.
C) Being out front personally leading the execution process and driving the pace of progress.
D) Weeding out managers who are consistently in the ranks of the lowest performers (the bottom 10%) and who are not enthusiastic about the strategy or how it is being executed.
E) Delegating authority to middle and lower-level managers and creating a sense of empowerment among employees to move the implementation process forward.
Q2) The core of a company's corporate culture is a shared commitment to achieve the firm's strategic and financial objectives. Justify your answer.
A)True
B)False
Q3) Briefly identify 3 types of unhealthy corporate cultures.
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