Abdullah Al-Sharmani

Chapter 5 essay questions

Q1. what are the core and distinctive competencies of an
organization?
Resources: an organization asset and are thus the basic building blocks
of the organization.
Capabilities: refer to a corporation’s ability to exploit its resources.
A Competency: is a cross-functional integration and coordination of
capabilities among all departments.
Core competency: is a collection of competencies that cross divisional
boundaries within the company.
Distinctive competency: when core competencies are superior to those
of the competition.

Q2. VRIO Framework of Analysis:

1. Valuable: Does it provide customer value and competitive advantage?
2. Rareness: Do no other competitors possess it at the same level?
3. Imitability: Do the competitors have the financial ability to imitate?
4. Organization: Is the firm organized to exploit the resource?
If the answer for these questions is Yes, then is considered to be a
strength.
Core competency can be easily imitated if it’s:
1. Transparency
2. Transferability
3. Replicability

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Q3. Using R/C to gain competitive advantage (distinctive

competency): A corporation can gain access to a distinctive
competency if four ways:
1. Asset endowment, such as key patent
2. Acquired from someone else
3. Shared with another business unit or alliance
4. Carefully built and accumulated over time within the company
Clusters: are geographic concentration of interconnected companies and
industries. Clusters provide access to Employees, Suppliers, Specialized
information, and Complementary products.

Q4. What are the five elements of business model?

1. Who it serves
2. what it provides
3. How it makes money
4. How it differentiates and sustain competitive advantage
5. how it provides its product/service

Q5. Business Model: (slide 18)

1. Time model
2. Efficiency model
3. Blockbuster model
4. Profit multiplier model
5. Entrepreneurial model
6. De facto industry standard model

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Q6. What are the three steps of Corporate Value-chain Analysis?

1. Examine each product line’s value chain in terms of the various
activities involved.
2. Examine the linkages within each product line’s value chain.
3. Examine the potential synergies among the value chains of different
product lines or business units.

Q7. What are the basic organization structure? (Slide 27)

1. Simple: has no functions and is appropriate for small company with
one or more product line.
2. Functional: is appropriate for medium-sized firm with several
product lines.
3. Divisional: is appropriate for large corporations with many product
lines in several related industries. There are two types;
1. Strategic business units (SBUs)
2. Conglomerate

Q8. What is Corporate Culture? (Slide 30)

Is a collection of beliefs, expectations, and values learned and shared by
a corporation’s members and transmitted from one generation of
employees to another.

Q9. What are the two distinct attributes of corporate culture?

1. Cultural intensity: the degree to which members accept the norms,
values and other cultural content associated with the unit.
2. Cultural integration: is the extent of which units throughout the
organization share a common culture. This is the cultural breadth

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Q10. What are the functions of corporate culture?

1. Conveys a sense of identity for employees
2. Generates employee commitment
3. Adds to the stability of the organization as a social system
4. Serves as a frame of reference for employees

Q11. R&D Mix;

1. Basic R&D: conducted by scientists where the focus is on theoretical
problems.
2. Product R&D: concentrates on marketing and with product or
product packaging improvements.
3. Engineering (Process) R&D: concentrate on
1. Quality control
2. The development of design specifications
3. Improved production equipment

Q12. What are the five trends driving virtual teams?

1. Flatter organizational structure
2. Turbulent environments
3. Increased employee autonomy
4. Higher knowledge requirements
5. Increasing globalization

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Chapter 6 essay questions

Q1. What are the criticisms of SWOT analysis?
1. It is simply the opinions of those filling out the box
2. Virtually everything that is a strength is also a weakness
3. Virtually everything that is an opportunity is also a threat
4. Adding layers of efforts does not improve the validity of the list
5. It uses a single point in time approach
6. There is no tie to the view from the customer
7. There is no validated evaluation approach

Q2. What are the five common elements pf mission statement?

1. It must be short
2. The design must be simple
3. It has to provide direction
4. It should enable employees
5. It should be measurable

Q3. What are the two types of business strategy?

1. Competitive: battling against all competitors for advantage.
2. Cooperative: working with one or more companies to gain advantage
against other competitors

Q4. Porter’s Competitive Strategy Questions;

1. Should we compete on the basis of lower cost (thus price) or should
we differentiate our products/services regardless of cost?

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2. Should we compete head-to-head with our major competitors for the

biggest share or should we focus on a niche in which we can satisfy a
profitable segment of the market?

Q5. What are the three Porter’s Generic Competitive Strategies?

1. Cost leadership: is ability of a company to design product and
market a product more efficiently than the competitors.
2. Differentiation: ability of a company to provide unique and superior
value to the buyer such as quality and special features.
3. Focus: ability of a company to provide unique and superior value to
• Particular buyer group
• Segment of the market line
• Geographic market

Q6. Porter’s Competitive Strategy; explain cost leadership,

differentiation, cost focus, and differentiation focus:
1. Cost leadership: is a lower-cost competitive strategy that aims at the
broad mass market and requires aggressive cost reduction in areas like
R&D, advertising and so on.
Characteristic of cost leadership:
1) Gives a company a defense against rivals
2) Serve as a barrier to entry
1) Allow the company to earn profit
2) Generates increased market share
2. Differentiation: is aimed at the broad mass market and involves the
creation of a product/service that has passed through the elements of
VRIO
Characteristic of differentiation

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1) Lowers customers sensitivity to price

2) Increases buyer loyalty
3) Generates higher profit
3. Cost focus: is low-cost competitive strategy that focus on a particular
buyer group and geographic market.
4. Differentiation focus: it concentrates on a particular buyer group or
geographic market to serve the needs of a narrow strategic market mor
effectively than competitors.

Q7. Strategic rollup: is an efficient way to quickly consolidate a

fragmented industry, with the aid of money from venture capitalists and
private equity firms.
As a result, a large firm creates economic of scale by:
1) Building regional/national brands
2) Applies best practices across all aspects of marketing
3) Hires more sophisticated managers than small companies
Rollups differ from mergers/acquisitions in three ways:
1) Involve large numbers of firms
2) Acquired companies are operated by owners
3) Objective of rollups is to reinvent an entire industry

Q8. Threats of Hyper-competitive Environment;

1. Short product life cycles
2. Short product design cycles
3. New technologies
4. Frequent entry by unexpected outsiders
5. Repositioning by incumbents
6. Diverse industries merge
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Q9. List the Reasons to Form an Alliance; (slide 34)

1. Obtain or learn new capabilities
2. Obtain access to specific markets
3. Reduce financial risk
4. Reduce political risk

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Chapter 7 essay questions

Q1. What do we mean by Corporate Strategy?
Is the choice of direction of the corporate as a whole and the
management of its business.
Corporate strategy addresses three key issues facing the corporation as a
whole;
1. Directional Strategy: the firm’s overall orientation toward growth,
stability, or retrenchment.
2. Portfolio Analysis: the industries or market in which the firm
competes through its product and business units.
3. Parenting Strategy: the manner in which management coordinates
activities, transfers resource, and cultivates capabilities among business
units.

Q2. Directional Strategy: it’s composed of three general orientations

(grand strategies);
Growth Strategy: expand the company’s activities
Stability strategy: make no change to current activities
Retrenchment strategy: reduce the company’s activities

Q3. Vertical Growth: the company grows by making its own supplies
and/or by distributing its own products. This is done in order to;
1) Reduce cost
2) Gain control over a scarce resource
3) Guarantee quality of a key input, or obtain access to potential
customers
Growth can be internally by expanding current operations or externally
through acquisitions.

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Q4. Vertical Integration: the degree to which a firm operates vertically

on a value chain from extracting raw materials (backward integration
which is a supplier’s function) to manufacturing to retailing (forward
integration which is a distributors function) vertical integration is a
result of vertical growth.
To improve its competitive position, a company may use;
1. Backward integration to minimize resource acquisition costs and
inefficient operations.
2. Forward integration to gain more control over product distribution.

Q5. Stability Strategies:

1. Pause/proceed with caution strategy: is, an effect, a time out, an
opportunity to rest before continuing a growth or retrenchment strategy.
2. No-change strategy: is a decision to do nothing new, a choice to
continue current operations and policies foreseeable future.
3. Profit strategy: is a decision to do nothing new in a worsening
situation but instead to act as though the company’s problems are only
temporary.

Q6. Retrenchment strategy: is used when the firm has a weak

competitive position in some or all of its product lines from:
1) Poor performance
2) Sales are down
3) Profits are becoming losses
To eliminate the weakness, management may follow one of several
strategies;
1) Turnaround: (transformation), emphasizes the improvement of
operational efficiency when the corporation’s problems are
pervasive but not critical.

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2) Captive company: a company with a weak competitive position

may not be able to have a full-blown turnaround so managers
search for an angle by offering to be captive company for exchange
of security.
3) Selling out: if a company with a weak competitive position that
can not pull itself up, or cannot find a customer or competitor to be
a captive company, there is no choice but to sell out.
4) Bankruptcy: company gives up management of the firm to the
courts in return for some settlement of corporation’s obligations.
5) Liquidation: seeking to perpetuate a corporation, liquidation is the
termination of the firm by the management.

Q7. What are the Advantages and Limitation of Portfolio Analysis?

1. Encourages top management to:
• Evaluate each of the corporation’s businesses individually.
• Set objectives and allocate resources for each.
2. Stimulates the use of externally oriented data to supplement
management’s judgment.
3. Raises the issue of cash flow availability to use in expansion and
growth.
4. Its graphic depiction facilitates communication.

Q8. What are the tasks Necessary for Managing a Strategic Alliance
Portfolio?
1. Developing and implementing a portfolio strategy for each business
unit.
2. Monitoring the alliance portfolio in terms of, implementing business
unit strategy, and implementing corporate strategy and policies.

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3. Coordinating the portfolio to obtain synergies and avoid conflicts

among alliance.
4. Establishing an alliance management system to support other tasks of
multi-alliance management.

Good Luck

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