Questions and Answers of Strategic Management

Why do so many oligopolies exist in healthcare?
What are the main barriers to entering the healthcare market? Do they vary by type of organization? How?
What are two measures of market concentration? Why might one be preferred over the other?
How might healthcare services pass through the product life cycle? How do the size and number of organizations in a market affect the product life cycle?
What must a firm do to succeed in the declining product market stage?
How should the strategic actions of an organization whose product is in an emerging market stage differ from those of an organization whose product is in the mature stage?
Herman has been working in healthcare administration for 10 years. He has finally taken a healthcare strategy course and learned about different market structures. He wondered why different segments
A three-judge panel for the Commonwealth Court of Pennsylvania ruled that the Borough of Jefferson Hills Zoning Hearing Board was wrong when it decided in 2019 that the borough’s zoning code only
Identify the market shares for general acute care services, by organization, in a city of your choosing. Determine the HHI and the four-firm concentration ratio for this area. How much monopoly power
Write a one-page paper on the problems of monopolistic power in healthcare. How might the proposed changes in the ACA affect the market power of healthcare providers? What can the government and
Can you identify some of the eight general environmental factors that might be important for the personal care industries that Procter &Gamble participates in, such as shampoo, dish and laundry
Practice evaluating the industry five forces using the strategy tools presented in this chapter and using the cola industry case included in your textbook.Read the case, Coca-Cola, Pepsi, and the
Practice evaluating the five forces, using the strategy tools presented in this chapter.1. Use either an industry that your professor assigns to you or pick an industry of your choice.2. Use a
Analyze the effects of the general environment on an industry of your choice.1. Identify an industry you would like to learn more about. Ideally, you should be able to gather sufficient information
Identifying the value chain.1. Go to your local grocery store and walk down the cereal aisle, the soda and snack foods aisle, and the meat aisle. How many different brands do you see on each aisle?
Understanding and using the competitive advantage pyramid.1. Choose a company you would like to work for. Using the competitive advantage pyramid, analyze the strength (or weakness) of competitive
Personalizing the competitive advantage pyramid.Create a competitive advantage pyramid. Collect data from those around you to identify activities that create strengths and weaknesses.List what you,
Understanding Diversification1. Look in The Wall Street Journal, Businessweek, or other business publication and find a company looking to expand through diversification—either greenfield entry or
Understanding Acquisitions 1. Choose a diversification move that entails acquisition. Using the company diamond from Chapter 3, identify areas where you believe the acquisition can add value for
Choose a competitive situation and model it as a game. Identify at least two players and two actions. Possible examples could include two banks that are considering whether to offer free checking;
Applying the 7 S framework.1. Select a company you would like to work for. Using the 7 S model and the framework provided in this chapter as a template, audit that company. Describe each S for the
Understanding change.1. Think about two change efforts you have been a part of, one that succeeded and one that did not. What did success mean? Use the three-step model of change and the eight key
Personalizing your line of sight.1. Create your own line of sight measure. Are you doing the most important things to move your strategy forward? Which activities contribute most, and what measures
More learning about social value and entrepreneurship.1. Identify a social-value organization near your university or community. Research this organization and try to interview one or more leaders of
Understanding corporate social responsibility.1. Choose a firm you may want to work for and that files a GRI report.Read the report and summarize the main CSR initiatives in which the company
What are the four choices that are part of strategy formulation?
Examine the Business Strategy of a Company.1. Identify a company you would like to learn more about that seems to have a competitive advantage (earns above-average profit returns).2. Gather data
Amazon is an online discount retailer that has successfully entered other businesses, such as electronic devices with the Kindle, Kindle Fire, and Echo as well Amazon Web Services. Read what you can
Which type of industry has more rivalry, fragmented or concentrated,and why?
Explain what happens to buyer power when buyers have increased price sensitivity.
What are substitutes? Can you name any substitutes for the laptop most of your classmates are using? What about substitutes for watching your university play football on Saturdays?
Under what conditions does the traditional advice concerning entering attractive markets and staying away from unattractive ones not hold? Besides the examples used in the book, can you think of any
How does each of the eight general environmental factors influence industry profitability? Take your time in answering this one and examine how at least one general environmental factors affects each
Identify and describe the two major elements of the value chain.How can the value chain help you do internal analysis?
How is a resource different from a capability? How are the two similar?How do different types of resources work together to create competitive advantage?
Identify three situations in which a competitive advantage pyramid analysis would be useful to you. What two rules about data collecting should you remember when you do a pyramid analysis?
Find the sources of cost advantage of a successful company with low prices.1. Identify a company you would like to learn more about that seems to have a cost advantage—it consistently has the
Airbnb and Uber are companies that have successfully entered the lodging and ride-hailing markets,respectively. Both provide offerings that are typically less expensive than their incumbent
Understanding Sources of Differentiation 1. What product do you use because of differentiation? What do you buy because it is awesome, rather than because it is the lowest-price alternative? What
Why do acquiring companies have to pay a premium when they acquire another firm? How does that premium create challenges for the acquiring firm?
Look for a story in a news source such The Wall Street Journal, Forbes, Fortune, or Bloomberg Businessweek about two companies that have announced an alliance or partnership. As you read the
Brainstorm opportunities to create partnerships—and value—with other companies 1. Identify a target company that you understand well—either because you have worked for the company or have read
What does a multidomestic strategy look like? What are the key elements?Comparatively, what are the key elements of a global strategy?Can you name a firm that pursues each strategy?
What makes an arbitrage strategy different from a multidomestic or global one? Name the four types of arbitrage and explain how each one works.
Understanding the Nature of Competition 1. Find a company that is rapidly stealing market share from incumbents. How is the business model of the growing company different? What innovative strategy
Choose an industry and construct a strategic group map.Do this by identifying some of the major players and some of the key differences in how they compete. Select two factors for the two axes and
Identify a company whose products you use frequently. Now identify one of its competitors. Imagine that you are the chief strategist for the first company. Using the principles of competitive
Identify a company whose products you use frequently.Determine whether this company operates in a monopoly, oligopoly, or competitive market. What does this imply about the competitive strategies
Identify a company whose products you use frequently.Choose and apply one or more of the tactics of sustainability and explain how the company could employ the tactic to extend their competitive
Thinking critically about governance and ethics.1. Write a short position paper (one or two pages) that supports either the shareholder primacy or stakeholder answer to the question,“For whom
What is entrepreneurship, and what are entrepreneurial opportunities? Why are they important for firms competing in the twenty-first–century competitive landscape?
How do the internal and external managerial labor markets affect the managerial succession process?
What trends exist regarding executive compensation? What is the effect of the increased use of long-term incentives on executives’ strategic decisions?
Lynda Gratton, Professor of Management Practice at the London Business School, talks about the role of cooperation coming from a profession that is really quite competitive. As you prepare for this
Hulu (http://www.hulu.com) is a Web site and a cooperative alliance that offers commercially supported content of TV (video on demand) shows through the Internet. The name is derived from a Chinese
What are the risks of international diversification? What are the challenges of managing multinational firms?
What environmental trends are affecting international strategy?
What are the three international corporate-level strategies?How do they differ from each other? What factors lead to their development?
What four factors provide a basis for international businesslevel strategies?
What are the four primary benefits of an international strategy?
Cadbury and Schweppes are two prominent and long-established companies. Cadbury was founded in 1824 and is the world’s largest confectionary company. The bulk of Cadbury’s sales are generated in
The text argues that mergers and acquisitions are a popular strategy for businesses both in the United States and abroad. However, returns for acquiring firms do not always live up to
Sir Mark Weinberg discusses the wisdom, or lack thereof, in firms that diversify their portfolio of businesses. Having been a director of a firm (British American Tobacco) that implemented an
What is corporate-level strategy and why is it important?
What makes one team successful while another team struggles?At first glance, a National Football League franchise or Women’s National Basketball Association team may not seem like a typical
IKEA is a brand famous for its focus on innovative solutions to the business of selling high-quality, low-price home furnishings. Anders Dahlvig, IKEA’s Group President and CEO, argues that
What are the four criteria used to determine which of a firm’s capabilities are core competencies? Why is it important for firms to use these criteria in developing capabilities?
Professor Jeffrey Pfeffer of Stanford Business School comments on a concept he coined the knowing–doing gap in which he discusses why conventional wisdom is often the correct path but quite often
Henry Ford is often credited with saying that he would rather be the first person to be second. This is strange coming from the innovator of the mass-produced automobile in the United States.So is
In 1986, NetJets founder Richard Santulli created the fractional airline ownership business model. Today his airline flies over 390,000 flights annually to more than 173 different countries.With 800
What are the four criteria used to determine which of a firm’s capabilities are core competencies? Why is it important for firms to use these criteria in developing capabilities?
The focus of this chapter is on understanding how firm resources and capabilities serve as the cornerstone for competencies, and, ultimately, a competitive advantage. However, when firms cannot
What is outsourcing? Why do firms outsource? Will outsourcing’s importance grow as we progress in the twenty-first century? If so, why?
Professor Jeffrey Pfeffer of Stanford Business School comments on a concept he coined the knowing–doing gap in which he discusses why conventional wisdom is often the correct path but quite often
The focus of this chapter is on understanding how firm resources and capabilities serve as the cornerstone for competencies, and, ultimately, a competitive advantage. However, when firms cannot
Jerry Rice (born October 13, 1962) is widely regarded as the greatest wide receiver ever and one of the greatest players in National Football League (NFL) history. He is the all-time leader in every
A critical ingredient to studying the general environment is identifying opportunities and threats. As discussed in this chapter, an opportunity is a condition in the environment that, if exploited,
The International Air Transport Association (IATA) reports statistics on the number of passengers carried each year by major airlines.Passenger data for 2007 are reported for the top 10 carriers in
Based on the financial statements provided for McDonald’s how much dividends in dollars did McDonald’s pay in 2007? In 2008?Data from McDonald’s income statement and balance sheet EXHIBIT 5
Monitoring competitors’ performance and strategies is a key aspect of an external audit. This exercise is designed to give you practice evaluating the competitive position of organizations in a
Financial ratio analysis is one of the best techniques for identifying and evaluating internal strengths and weaknesses. Potential investors and current shareholders look closely at firms’
The purpose of this exercise is to get you familiar with strategy terms introduced and defined in Chapter 1. Let’s apply these terms to McDonald’s Corporation (stock symbol =
External and internal factors are the underlying bases of strategies formulated and implemented by organizations. Your college or university faces numerous external opportunities/threats and has many
This activity is aimed at giving you practical knowledge about how organizations in your city or town are doing strategic planning. This exercise also will give you experience interacting on a
Most universities have a vision and mission statement. The purpose of this exercise is to give you practice writing a vision and mission statement for a nonprofit organization such as your own
This exercise is designed to get you familiar with the Strategic Management Club Online (SMCO), which offers many benefits for the strategy student. The SMCO site also offers templates for doing case
There is always room for improvement in regard to an existing vision and mission statement. Currently McDonald’s does not have a vision statement or mission statement, so this exercise will ask you
A business mission statement is an integral part of strategic management. It provides direction for formulating, implementing, and evaluating strategic activities. This exercise will give you
This exercise gives you the opportunity to study the nature and role of vision and mission statements in strategic management.InstructionsStep 1 Call various organizations in your city or county to
This exercise will give you practice developing an EFE Matrix. An EFE Matrix summarizes the results of an external audit. This is an important tool widely used by strategists.InstructionsStep 1 Join
This exercise will help you become familiar with important sources of external information available in your college library. A key part of preparing an external audit is searching the Internet and
More colleges and universities are embarking on the strategic-management process. Institutions are consciously and systematically identifying and evaluating external opportunities and threats facing
Your college or university competes with all other educational institutions in the world, especially those in your own state. State funds, students, faculty, staff, endowments, gifts, and federal
This exercise will give you experience in developing an IFE Matrix. Identifying and prioritizing factors to include in an IFE Matrix fosters communication among functional and divisional managers.
This exercise gives you the opportunity to evaluate your university’s major strengths and weaknesses. As will become clearer in the next chapter, an organization’s strategies are largely based
In performing strategic management case analysis, you can find information about the respective company’s actual and planned strategies. Comparing what is planned versus what you recommend is an
This exercise can improve your understanding of various strategies by giving you experience classifying strategies. This skill will help you use the strategy-formulation tools presented later.
This exercise focuses on how risky various alternative strategies are for organizations to pursue. Different degrees of risk are based largely on varying degrees of externality, defined as movement
Strategy articles can be found weekly in journals, magazines, and newspapers. By reading and studying strategy articles, you can gain a better understanding of the strategic management process.
Portfolio matrices are widely used by multidivisional organizations to help identify and select strategies to pursue. A BCG analysis identifies particular divisions that should receive fewer

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