MGT430 Spring 2017 Final Exam Study Guide, Sample Questions

Study Guide: MGT430 Final Exam: Sample Exam questions, Topics covered

Final Exam is 25% of course grade

Students will have 2.5 hours to complete
Exam will include True/False, Short answer and short essay questions Please write in
ink

Disclaimer: This study guide is a guide only and not meant to be 100% inclusive of
questions etc. Any materials in the readings or covered in class slides are
considered fair-game for the exam and there will be questions and T/F not shown
here. The questions snd T/F shown are only to show the type of questions that will
be asked, some may be used- some not.

Note: The Final exam is not specifically cumulative. However there are some
areas to be covered that were covered on MidTerm.These include Value
Chain/Value System, Porters 5 Forces, Chapter 5 in Crafting and Executing
Strategy, Value Proposition and the book Understanding Michael Porter.

Materials Covered:

Class Slides: All

Readings:

Books:

Understanding Michael Porter

(all) Only the Paranoid 1-120
Leading Strategic Change (all)
Crafting and Executing Strategy
6, 7,
Business Model
Generation_excerpts.pdf BMG
Strategy

Modules:

SWOT/TOWS Module
Activity Systems
Module

Articles:

What is Strategy
How To Thrive In Turbulent
Markets The Real Value of
Strategic Planning. Putting
Leadership Back Into Strategy
Turning Great Strategy into Great Performance
 Sample True or False: Be prepared to explain why true or false

The vision statement of a firm focuses on its future business purpose - where we
are going
T.
A company's strategic vision concerns a company's directional path and future product-martket-customer-
technology focus.
delineates management's aspirations for the business, providing a panoramic view
of "where we are going" and a convincing rationale for why this makes good
business sense

The ability of the organization to influence the performance of other organizations

in the value system may be a crucially important competence and a source of
competitive advantage
T
very rarely does a single organisation undertake all of the value activities from the product
design through to the delivery of the final product or service to the final consumer. There is
usually specialisation of the role and any one organisation is part of the wider value system
which creates a product or service. For example, the quality of an automobile when it reaches
the final purchaser is not only influenced by the activities which are undertaken within the
manufacturing company itself

Sustainability comes from the activity system as a whole, not from the parts or
pieces of the activity system
T.
Cuz weakness in the other pillars can directly weaken the other parts/pieces

The strongest competitive force or forces determine the profitability of an industry

and become(s) the most important to strategy formulation.
T.
The strongest competitive force or forces determine the profitability of an industry
and so are of greatest importance in strategy formulation. For example, even a
company with a strong position in an industry unthreatened by potential entrants
will earn low returns if it faces a superior or a lower-cost substitute productas the
leading manufacturers of vacuum tubes and coffee percolators have learned to their
sorrow. In such a situation, coping with the substitute product becomes the number
one strategic priority.

Leaders in the connected economy view the entire value chain as an extension of
their own enterprise
T.
Leaders in the connected economy view the entire value chain as an extension of their own
enterprise. Value chains are seen as integrated networks -- a web encompassing all trading
partners -- focused on profitably meeting customer needs. Competition has evolved from
company vs company to value chain vs value chain. Internal capabilities, whether physical
or financial, no longer constrain the ability to satisfy customer requirements. The resources
of the entire web provide the "muscle" to execute. Leading companies in the connected
economy seek to collaborate with trading partners in their extended network.
 Andy Grove, says that strategic inflection points and the fundamental changes
they represent are always a destructive force.
T.
Strategic Inflection Points are what happens to a business when a
major change takes place in its competitive environment. at they
require a fundamental change in business strategy, and that's
almost a definition of a Strategic Inflection Point. A Strategic
Inflection Point is that which causes you to make a fundamental
change in business strategy. depending on the actions you take in
responding to this challenge, you will either go on to new heights or
head downward in your prosperity as a firm.

Strategic management is a set of managerial actions that determines only

the short-term performance of the company
F.
Strategic management is the set of managerial decision and action that determines
the long-run performance of a corporation

The very existence of competitive advantage sets in motion creative innovations

that, as competitors strive to level the playing field, cause the advantage to
continually increase.
F.
the very existence of competitive advantage sets in motion creative innovations
that, as competitors strive to level the playing field, cause the advantage to
dissipate.
http://global.oup.com/uk/orc/busecon/business/henry2e/01student/journal_abstracts
/ch07/

Strategic positioning means performing different activities from rivals' or performing

different activities in similar ways.
F.
Strategic Positioning: means performing different activities from rivals' or performing
similar activities in different ways ..

Fit locks out imitators by creating a chain that is as strong as its strongest link.
T
fit among a company's activities creates pressures and incentives to improve
operational effectiveness, which makes imitation even harders to match an array of
interlocked activities than it is merely to imitate a particular sales-force approach,
match a process technology, or replicate a set of product features. Positions built on
systems of activities are far more sustainable than those built on individual
activities.

The overriding objective of strategic management is to become operationally

effective as a business and ignore competitive advantage.
F.
A strategy statement communicates your companys strategy to everyone within your startup.
The statement consists of three components: objective, scope and competitive advantage. All
three components must be expressed as clearly as possible.
 In the value chain, operations include the receiving, warehousing, and inventory
control of input materials.
F.
Inbound logistics include receiving, warehousing and inventory control. Operations include
value-creating activities that transform inputs into products.

The ability of the organization to influence the performance of other organizations

in the value system may be a crucially important competence and a source of
competitive advantage.
F,
Value chain system is these competencies to perform particular activities and the ability to
manage linkages between activities, which are the source of competitive advantage for
organisations.

If a company buys one of their suppliers this is considered an aspect of horizontal

integration
T.
Horizontal integration
is a strategy where a company acquires, mergers or takes over another company in the
same industry value chain.

Support activities often are viewed as "overhead", but some firms successfully have
used them to develop a competitive advantage.

T.

For example, to develop a cost advantage through innovative management of

information systems can call (HR , tech, R+D,
If a companies strategy is working well there really is no need for management to do
environmental audits and consider changing strategic direction.
F.
Companies need to adapt its strategies to the changing environment continuously.

The overriding objective of strategic management is always to become operationally

effective as a business, and ignore competitive advantage.
F.

Sample Questions:

Define Value System.

A value system is the network of organizations and the value producing activities involved in
the production and delivery of an offering. The major business processes are the value
producing activities.
How can examining the value system help a company create and adjust a
sustainable strategy? (book)

What is the ultimate goal of

strategy? Define value chain?

The idea of the value chain is based on the process view of organisations, the idea of seeing a
manufacturing (or service) organisation as a system, made up of subsystems each with inputs,
transformation processes and outputs. Inputs, transformation processes, and outputs involve the
acquisition and consumption of resources - money, labour, materials, equipment, buildings, land,
administration and management. How value chain activities are carried out determines costs and affects
profits.

A fundamental question in value-chain management is: How is value created?

Explain how value is created in the value chain/system and this relates to
competitive advantage. (book)

From Only The Paranoid: Strategic inflection points can be caused by technological
change but they are more than technological change. Explain what he means by
this and how is it relevant to strategy?
Is A major change due to introduction of new technologies. A major
change due to the introduction of a different regulatory
environment. The major change can be simply a change in the
customers' values, a change in what customers prefer

Andy Grove poses the question: "How do we know whether a change signals a
strategic inflection point? and When is a change really a strategic inflection
point? ...he also writes that They are often not clear until you can look at the
events in retrospect. What can managers do to know if a change signals an
inflection point, and what can managers and organizations do to know that change
is needed before these inflection points happen? Give examples.
Some key warning signs that hint that the change you are dealing
with make a Strategic Inflection Point is when it is clear to you that
all of a sudden the company or the entity that you worry about has
shifted.
So how do we know whether a change signals a strategic inflection point? Grove
offers useful guidelines. First, we must figure out who our key competitor is. When the
answer to this question is not as clear as it used to be, its time to sit up and pay
special attention. Does the company that in past years mattered the most to us and
our business seem less important today? Does it look like another company is about
to eclipse them? If so, it may be a sign of shifting industry
A linkage exists if the performance or cost of one activity affects that of another. Do
you agree/ disagree? What is the relation of this to establishing and maintaining
competitive advantage?
dynamics. Do people seem to be losing it around you? Does it seem that people
who for years had been very competent have suddenly gotten decoupled from what
really matters? The Cassandras in the organization are a consistently helpful
element in recognizing strategic inflection points. Although they can come from
anywhere in the company, Cassandras are usually in middle management. Often
they work in the sales organization. They usually know more about upcoming
change than the senior management because they spend so much time outdoors
where the winds of the real world below in their faces. The most important tool in
identifying a particular development as a strategic inflection point is a broad and
intensive debate. How will it affect our business if we make a dramatic move? How
will it affect it if we dont? The more complex the issues are, the more levels of
management should be involved because people from different levels of
management bring different points of view and expertise to the table. The debate
should also involve people outside the company, customers and partners who not
only have different areas of expertise but also have different interests. They bring
their own biases and their own interests into the picture. But that according to Grove
is acceptable. A business can succeed only if it serves the interests of outside
parties as well.

FromThe Real Value of Strategic Planning

The goal of a strategic planning process should not be to make strategy but to build
prepared minds that are capable of making sound strategic decisions. Do you
agree/disagree and why? How can organizations build prepared minds ?

From Putting Leadership Back Into Strategy .we need to think about strategy in
a new way one that recognizes the inherently fluid nature of competition and the
attendant need for continuous, not periodic, leadership.
a. What is meant by the inherently fluid nature of competition.
b. define what is meant by the attendant need for
continuous, not periodic, leadership. How is this
relevant to strategy?
c. Who (according to the article) should be the chief strategist for the
company?
Strategic fit creates competitive advantage and superior profitability What is
strategic fit and how does it help achieve the above?

From the article How To Thrive In Turbulent Markets Organizations can

achieve agility in three distinct ways. Define each way briefly and give an example
of a company that follows this approach, what one of the must haves is and then
Leaders Need To

1.Operational :

Example:
Must Have:
Leaders Need To:

2.Portfolio:

Example:
Must Have:
Leaders Need To:

3.Strategic:

Example:
Must Have:
Leaders Need To:

Porters 5 Tests of Strategy