BSAD 490
STUDY GUIDE, TEST #1
(If you have concerns about the accuracy of your answers, you can bring them to me
for review.)
1. List & briefly discuss the 5 business-level strategies identified in Ch 4.
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Cost leadership
An integrated set of actions designed to produce or deliver goods or services with
features that are acceptable to customers at the lowest cost, relative to that of
competitors
Differentiation
An integrated set of actions designed by a firm to produce or deliver goods or
services (at an acceptable cost that customers perceive as being different in ways
that are important to them
Focused on cost leadership
Focused on differentiation
Integrated cost leadership/differentiation
2. Compare & contrast corporate- vs. business-level strategy.
 Corporate-level strategy
Specifics actions taken by the firm to gain a competitive advantage by selecting
and managing a group of different businesses competing in several industries and
product markets
 Business-level strategy
An integrated and coordinated set of commitments and actions the firm uses to
gain a competitive advantage by exploiting core competencies in specific product
markets
3. Define & briefly discuss the importance of a sustainable competitive advantage.
It occurs when a firm implements a value-creating strategy and other companies are
unable to duplicate it or find it too costly to imitate
4. Define & discuss the strategic management process (in terms of str’c inputs, actions,
outcomes, etc). see p. 5
Aramark
Providing coffee is a relatively inexpensive way to keep employees in the office and
stimulated. Simply b4enefit from conditions in their external environment
Brinker International
 Decentralized approach allowing each of it restaurant chains to operate
entrepreneurially in local markets
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The approach pays off—sales per restaurant have increased by approximately
3.7% per year while sales for its competitors
Meal-to go operation that provides gourmet foods for take-out dining.
5. What do we mean by “success/failure is impermanent?”
There are no guarantees of success
Success won’t continue
6. List & briefly discuss 3 ways in which the ever increasing role of a “global economy”
has impacted firms, management, &/or customers.
 Global economy
One in which goods, services, people, skills, and ideas move freely across
geographic borders
① Increasing rate of technological change and diffusion
 Perpetual innovation
② The information age
③ Increasing knowledge intensity
7. Define stakeholders & list the 3 types (w/ examples).
The individuals and groups who can affect, and are affected by, the strategic
outcomes achieved and who have enforceable claims on a firm’s performance
① Capital market stakeholders
 Shareholders
 Major suppliers of capital (e.g. banks)
② Product market stakeholders
 Primary customers
 Suppliers host communities
 Unions
③ Organizational stakeholders
 Employees
 Managers
 Non-managers
8. Define general environment & list the 6 segments identified in the text.
Composed of dimensions in the broader society that influence an industry and the
firms within it
①
②
③
④
⑤
⑥
Economic
Socio-cultural
Global
Technological
Political/legal
Demographic
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9. Define industry environment (definition must include the 5 forces).
The set of factors that directly influences a firm and its competitive actions and
competitive responses (the 5 forces of competition model):
① The threat of new entrants
② Bargaining power of suppliers
③ Bargaining power of buyers
④ Threat of substitute products
⑤ Rivalry among competing firms
10. Briefly discuss how 2 of the 5 forces of competition influence the attractiveness of the
industry.
11. List the 4 components (STEPS) of the external analysis.
12. Define a strategic group & briefly discuss why is it especially important for firms to
identify, analyze & track firms within their strategic group?
13. Why has the importance of the internal analysis increased?
14. What are resources? What is the difference between tangible & intangible resources?
Which type is USUALLY the best source of competitive advantage & Why?
15. List & briefly define the 4 criteria for a capability to create a sustainable competitive
advantage.
16. Define outsourcing & list 3 reasons why a firm may AND why a firm may not
outsource (6 TOTAL).
***(over) ***
17. What is a SWOT analysis? What are the goals?
18. List 4 methods of identifying/classifying consumer markets/segments.
19. List the 5 types of diversification identified in Ch. 6.
20. List & briefly discuss the 3 main motives behind diversification strategies designed to
enhance strategic competitiveness.
21. List 3 incentives and/or resources for diversification with neutral effects.
22. Define synergy & briefly discuss how it may increase the risk of firm failure.
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DON’T FORGET TO BE AWARE OF THE REST OF THE NOTES, ESP. THOSE
ASPECTS WHICH WE HAVE SPENT MORE TIME DISCUSSING &/OR HAVE
DISCUSSED ON SEVERAL OCCASIONS (E.G. ULTIMATE GOALS OF STR’C
MGT PROCESS  ABOVE-AVG. RETURNS)
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