Strategic management (business, international and management

UMSD7T-15-3 – Strategic management (business, international and management) 20sep_1

 

Strategy and Innovation – Portfolio Test 3

Question 1

 

True or False?

Path dependency not only impacts on the strategic choices a firm considers and makes, it also influences the expectations of key stakeholders – shareholders, regulators, media etc. An approach in the industry becomes the expected norm and managers are challenged if they go against that norm. Ultimately the approach becomes taken for granted and not even thought about.

True

False

Question 2

 

Kim and Mauborgne’s strategy canvas depicts the ‘as is’ value curve and ‘target’ value curve by plotting competitive factors against which of the following?

    The amount of each competing factor (e.g. in the hotel industry the number room types)
    The perceived quality or value as rated by customers)
    The level of fit to customer’s needs derived from senior managers interviewing customers and non customers
    The difficulty competitors have copying each competing factor

 

Question 3

Which of the following is at the core of the Blue Ocean strategy perspective?

  a. Possessing a small number of unique and difficult to copy competencies that enable the firm to do things others can not
  b. Looking across and challenging existing industry boundaries to create uncontested market space
  c. Seeking a series of resource advantages. As competitors match an advantage the firm has moved on to a new source of advantage
  d. Choosing a position in an industry and then aligning all the activities in the firm to that choice

Question 4

Which of the following were competing factors in the ‘as is’ value curve for Blockbuster and other video rental stores

(Select ALL that apply)

  a. The customer value delivered by the video store offering.
  b. Number of copies available in store of new release hit films
  c. Rental price
  d. Proximity of physical store to residential areas
  e. Number of Stores

Question 5

True or False?

As a product or service passes through its life cycle – from invention to maturity – a dominant design will emerge in an industry. At early stages of the life cycle there will be wide variations in the components used and also in the product and production architecture. However, in maturity, when a dominant design is established, the architecture will be set  and often taken for granted, with competition taking place on changes to components.

True

False

Question 6

Which of the following are symptoms you will tend to see if a firm has misinterpreted architectural innovation as component or modular innovation?

(Select ALL that apply)

  a. Legacy processes and systems (e.g. IT systems) hinder the transitioning to a new architecture
  b. Change is being interpreted through existing, usually effective, frameworks (e.g. capital allocation processes, capacity planning) and explained by making links to previous events
  c. The firm makes rational choices to serve the needs of it’s best customers for whom the new approach does not offer the required performance
  d. The firm is reluctant or unable to redirect time and resources to the new approach (often the firm is still reliant on the revenue generated by the old approach)
  e. Managers are unsure of what existing architectural knowledge can be retained and what needs to be replaced
  f. The firm does not possess the competencies needed to make the change and can not obtain them

Question 7

True or False?

As performance of a low end innovation improves and starts to attract the customers who had traditionally been price sensitive, and who made little contribution to profitability, Christensen argues that the a logical reaction of existing firms is to increase focus on existing customers especially those who need higher performance and are often more profitable.

True

False

Question 8

What are the two types of innovation that Christensen suggests have the potential to cause disruption

  a. An innovation with very low performance on attributes valued in the market (Low-End Foothold)
  b. An upgrade in the performance of the the products sold in the market (High-End Foothold)
  c. An innovation in a new market segment/adjacent industry offering different attributes not valued in the established market (New-Market Foothold)
  d. A radical innovation that offers superior performance to existing customers (First Mover Foothold)

Question 9

How should you use the theories of disruption to analyse a case or business?

  a. Work through each of the two theories separately and see what facts from the case or business fit the theory.
  b. Pick the theory you prefer and just use that in your analysis
  c. Work through the case drawing in which ever element of the theory fits what you see.

Question 10

Which of the following suggest that Christensen’s theory of disruptive innovation may explain the failure of Blockbuster?

  a. Initially Netflix was a low performing market entrant that could not match the performance of Blockbuster on traditional industry metrics (e.g. availability of latest Hollywood film releases)
  b. Recruitment of a new CEO with retail turnaround experience
  c. The focus by Blockbuster on to in-store cross-sales to its regular (best) customers
  d. Netflix/streaming was just one of the competitive changes faced by the video rental market in the early 2000s (e.g. supermarket sales, vending machines, Amazon)

 

Strategy as Choice – Portfolio Test 1

 Question 1

The following are areas of primary activities in Porter’s value chain

(Select ALL that apply)

  a. In Bound Logistics
  b. Operations
  c. Human Resource Management
  d. Finance Function
  e. After Sales Service
  f. Out Bound Logistics

Question 2

Porter argues that competitive strategy requires firms to think about which of the following 2 areas

(Select the 2 answers that apply)

  a. Its geographic scope
  b. How the firm positions itself in the industry
  c. The industry structure
  d. Its social responsibilities to its stakeholders

Question 3

True or false?

“A trade off choice means you are making a choice that in doing so you are also choosing to not do something else – even if that alternative is attractive”

True

False

Question 4

To prevent competitors from imitating your strategic position Porter describes a number of “lines of defence”. these are:

(Select ALL that apply)

 

  a. You need a tailored value chain to deliver the chosen value proposition
  b. There must be a high level of fit in the system of activity choices the firm has made
  c. Trade off choices need to have been made in your value proposition and/or value chain
  d. The ability to create new Blue Ocean space where the competition is irrelevant
  e. You have unique strategic assets that others cannot acquire

 

Question 5

Which of the following does Porter argue create a successful strategy?

(Select ALL that apply)

  a. A different, tailored value chain
  b. Strategic continuity
  c. A generic strategy (cost leadership or differentiation)
  d. A unique Value Proposition
  e. Activities that fit together and reinforce each other as an activity system
  f. Clear trade off choices
  g. None of the above

Question 6

Which of the following are dimensions of Porter’s “Value Proposition” that define the strategic position of a firm?

(Select All that apply)

 

  a. Choosing what relative price position to adopt
  b. Choosing which customers to serve and which not
  c. Choosing which customer needs to meet and which not
  d. The mapping of activities into the value chain
  e. Choosing a generic strategy i.e. cost leadership or differentiation

 

Question 7

Porter’s activity system map is constructed by drawing and linking together which of the following?

(Select ALL that apply)

 

  a. Strategic themes
  b. Specific activity choices
  c. All activities carried out by the firm
  d. The resources in the firm

 

Question 8

Porter’s activity system map can be used to assess which levels of fit?

(Select ALL that apply)

    First Order Fit: Simple Consistency
    Second Order Fit: Reinforcing Fit
    Third Order of Fit: Optimisation of Effort
    Strategic Consistency

Question 9

Looking at Jet Blue’s introduction of the new business class service from Porter’s pperspective the danger is that the firm …

  a. Is trying to straddle two strategic positions and so lose its competitive advantage
  b. Has not thought through the operational implications of the new service
  c. Has failed to fully assess the financial implications of the move
  d. Is not going far or quickly enough to satisfy the demands of its shareholders

Question 10

What could be the impact of adding a second type of aircraft to Jet Blues operation as envisaged in Jet Blue case (part 1)

(Select ALL that apply)

  a. Increased training costs
  b. Higher purchase prices of aircraft
  c. Increase in stocks of spare parts
  d. Reduced air and ground crew familiarity with an aircraft leading to longer turnaround times
  e. Increase maintenance crew training

 

RBV and Competencies – Portfolio Test 2

 Question 1

True or False?

A competency is an integrated bundle of resources where the elements create more value by operating together than if they stood alone. As an integrated bundle competencies are potentially far more difficult for others to copy.

True

False

Question 2

Fill in the missing word:

The competencies – integrated bundles of resources – possessed by the organisation create the Strategic ______________ of the organisation – the reason why customers choose to buy from this organisation. This Strategic  ____________ enables the firm to operate across multiple product/service markets.

 

Question 3

In a VRIO test a competency is found to be valuable and inimitable, and the organisation benefits from the competency. However it is  not rare in the industry where the firm competes. Does the competency provided competitive advantage?

  a. No it provides parity with its competitors.
  b. Yes sustainable competitive advantage – it will enjoy an advantage for the foreseeable future
  c. Yes but only temporary competitive advantage – at some stage competitors will copy the competency and so the firm will lose its advantage
  d. No the cost of holding that competency put the firm at a disadvantage to its competiotrs

Question 4

While a highly useful analysis tool the RBV theory is criticised for its static view of competitive advantage. Critics argue that in today’s turbulent markets it is unrealistic to believe that a resource advantage will provide sustainable competitive advantage.

True

False

Question 5

To determine whether an organisation gains competitive advantage from its competencies its needs to test them using Barney’s VRIO test (Valuable, Rare, Inimitable and Organisation). Which of the following is the correct way to apply the VRIO test.

  a. Look across the competencies and see if there is one that passes the valuable test. Then move to the rare element and determine if there is a competency that is rare. Conduct a similar approach with inimitable and organisation.  Back up your assessment with evidence from the organisation or case study.
  b. Test each competency in turn using the the full VRIO test. So is that competency valuable, is it rare, is it inimitable and does the organisation gain the value from that competency. Ensure evidence is provided from  the organisation to support your assessment of each element of the test.

Question 6

CEMEX’s relationships with owners of the stores that are members of the Construrama network suggest as a competency it may be difficult to copy due to…

  a. Causal ambiguity
  b. Social complexity
  c. The cost of setting it up
  d. Historic circumstances

Question 7

Which of the following are mechanisms and formal routines that firms employ to reconfigure/transform their competency and resource portfolio?

(Select ALL that apply)

  a. Strategic Alliances
  b. Cultural change
  c. M&A (mergers and acquisitions) to acquire new competencies and single resources
  d. Succession Planning and Senior Leadership Changes

Question 8

True or False?

Dynamic capabilities create a firm’s consistent ability to integrate, build and reconfigure competencies to address rapidly changing environment.

True

False

Question 9

The managing/seizing dynamic capabilities that IBM put in place included which of the following?

(Select ALL that apply)

  a. The $500 million corporate investment fund
  b. The integration and values team
  c. Strategic leadership forums (SLFs)
  d. The emerging opportunities portfolio of processes
  e. None of these

Question 10

Which of the following are formal mechanisms delivering CEMEX’s dynamic capabilities

(Select ALL that apply)

  a. Its formal PMI process (post merger integration process)
  b. Construrama
  c. Its social media system ‘Shift’
  d. Its CEMEXnet satellite system
  e. Its global networks

 

Strategy and Responsibility – Portfolio Test 4

 Question 1

Complete the following sentence

When developing corporate strategy you are looking at the firm for the perspective of _____________

  a. Society
  b. Gaining competitive advantage
  c. Customers
  d. Shareholders

Question 2

Managers often claim that growth and risk reduction result from diversification. However such moves are often not in the interests of shareholders. What are the reasons for this?

(Select ALL that apply)

  a. In a developed capital market shareholders can more effectively diversify their portfolio themselves to reduce risk
  b. In a less developed capital market, ownership by a group is needed to gain transparency on performance and exert control
  c. Unless growth is achieved at a level of profitability above that in the firm’s current activities then it dilutes the performance of the firm’s stock. Shareholders would have been better off investing directly in the acquired business.
  d. While diversification can lead to more consistent firm performance this often comes at the expense of above average performance. This reduces the returns across shareholder’s own investment portfolios

Question 3

A Synergy Manager adds value through which of the following activities?

  a. Realising the cost savings in an acquisition by the removal of duplicate activities and departments
  b. Using the parent’s centrally held competencies and expertise to enhance the performance of individual business units (for example subsidiaries of Virgin using its brand)
  c. Managing the financial flows between individual subsidiaries. For example balancing the cash needs of mature businesses with those of businesses in growing markets
  d. Spotting opportunities and facilitating the sharing/transfer of resources and expertise between different subsidiaries to grasp those opportunities

Question 4

A parent firm imposes cost on to any business unit under its ownership. The reasons for this include:

(Select ALL that apply)

  a. The are business unit administration costs resulting from control, reporting and other governance processes required by the parent
  b. There are opportunity costs for business units resulting from it’s managers having less focus on its performance
  c. It needs to allocate headquarters expenses
  d. There are opportunity costs for the business unit as a result of reduced flexibility and a lower speed of reaction to market events

Question 5

Given the group’s origin, which business unit most clearly fits into the heartland zone of a Parenting Matrix for Esquel?

  a. The cotton farms the group own
  b. The accessory manufacturing business
  c. The retailing business (Pye)
  d. Garment Manufacture

Question 6

Match the area on Porter and Kramer’s CSV framework with its definition

  Social Dimensions of Competitive Context
  Value Chain Impacts
  Generic Social Issues

 

a. Social issues in the external environment that most significantly affect a company’s current or future competitiveness and strategy
b. Social issues that are not significantly affected by the company’s operations and do not materially affect its long term competitiveness
c. Social issues that are significantly affected by a company’s everyday activities in its business operations

 

Question 7

In Porter and Kramer’s CSV matrix, strategic CSR includes which of the following social issues?

(Select ALL that apply)

  a. Value Chain Impacts where action will create economic value as well as social value
  b. The small number of significant social issues mapped into the ‘Social Dimensions of Competitive Context’ box
  c. Generic Social Issues
  d. All Value Chain Impacts

Question 8

Porter and Kramer suggest actions for each social issue depending on where it maps in the CSV framework. Match the action to each part of the framework.

  Act as a good citizen by responding to local requirements but minimising effort. CSR spend can have more impact if invested elsewhere
  Mitigate any harm to social value being caused by the day-to-day activities of the firm. Fix and then focus CSR investment elsewhere
  Invest to change the day-to-day activities of the firm to benefit society where the investments also creating economic value
  Invest and leverage the firm’s capabilities to have a major impact on improving key areas of the firms current and future competitive landscape as well as significantly benefiting society

 

a. Value Chain Impacts where action creates shared value (social value and economic value)
b. Social Dimensions of Competitive Context
c. Generic Social Issues
d. Value Chain Impacts where actions do not create economic value

 

Question 9

Which of the following are criticisms of Porter and Kramer’s concept of share value?

(Select ALL that apply)

  a. It reflects a shallow conception of what the role of a firm in society actually is
  b. It ignore deep tensions between social and economic goals in the firm and society
  c. It is naive about the challenges of business compliance (what is right and wrong is not clear cut)
  d. It brings a strategic perspective to the social responsibility of a firm

Question 10

In to which categories on Porter and Kramer’s CSV framework would the following social initiatives pursued by Esquel be placed?

  Donations to areas struck by a natural disaster
  Improving waste water treatment in its dying operations in Gaoming
  Installation of a thermo-power plant in Gaoming that cuts emmisions and cost of electricity
  Working with farmers on organic approaches to growing of cotton in response to growing concern from end customers and major clothing brands.
  Providing employment to people in the Gaoming province of China