1.According to the I/O model, what should a firm do to earn above-average returns?
The I/O model suggests that conditions and characteristics of the external environment (the general, industry and competitive environments) are the primary inputs to and determinants of strategies that firms should formulate and implement to earn above-average returns. Assumptions of the I/O model are that: (1) the external environment impos pressures and constraints that determine which strategies will result in superior profitability, (2) most firms competing in an industry (or industry gment) control similar strategically-relevant resources and pursue similar strategies in light of resource similarity, (3) resources ud to implement strategies are highly mobile across firms, and (4) decision makers are assumed to be rational and committed to acting in the firm‘s best interests. The I/O model thus challenges firms to ek out the industry (or industry gment) with the greatest profit potential and then learn how to u their resources to implement value-creating strategies given the structural characteristics of the industry.
2. How do the five forces of competition in an industry affect its profit potential? Explain.
陶母责子 An industry’s competitive intensity and profit potential can be determined by the relative strengths of five competitive forces. This model of industry competition recognizes that suppliers can influence industry profitability by raising prices or reducing the quality of goods sold if industry participants are unable to recover cost increas through pricing structures. Buyers can influence the profit potential of an industry if the buyer group is able to successfully bargain for higher quality, greater levels of rvice, and lower prices. Substitute products influence an industry’s profit potential by placing an upper limit on prices that can be charged. New entrants to an industry influence industry profitability becau they bring additional production capacity to the industry. Unless product demand is increasing, additional capacity holds down (or reduces) buyers’ costs, reducing profitability for all firms in the industry. The intensity of rivalry among competitors reflects competitor actions and respons as firms initiate moves to improve their competitive position or when they act in retaliation for competitive pressures brought about by the strategic actions of rival firms. Generally, the greater the intensity of competitive rivalry, the lower the overall profitability of an industry.脑卒中防治
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3. What are capabilities? What must firms do to create capabilities?
Capabilities exist when resources have been purpoly integrated to achieve a specific task or t of tasks.
Firms must be able to utilize the knowledge they have and transfer it among their business units, and to create an environment that allows people to integrate their individual knowledge with that held by others in the firm so that, collectively, the firm has significant organizational knowledge.
4. What are strategic competitiveness, strategy competitive advantage, above-average returns, and the strategic management process?
Strategic competitiveness is achieved when a firm successfully formulates and implements a value-creating strategy.
A strategy is an integrated and coordinated t of commitments and actions designed to exploit core competencies and gain a competitive advantage.
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A competitive advantage is achieved when a firm‘s current and potential competitors either are not able to simultaneously formulate and implement its value-creating strategy, are unable to duplicate the benefits of the strategy, or find the strategy too costly to imitate.
Above-average returns are returns in excess of what an investor expects to earn from other investments with a similar amount of risk.
The strategic management process is the full t of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns.
鞭炮的鞭怎么写5. What are the attributes associated with a successful acquisition strategy?
The acquiring and target firms have complementary resources that are the foundation for developing new capabilities ;the acquisition is friendly ,thereby facilitating integration of the firms’ resources ; the target firm is lected ang purchad bad on thorough due diligence ;the acquiring and target firms have considerable slack in the form of cash or de
bt capacity ;the newly formed firm maintains a low or moderate level of debt by lling off portions of the acquired firm or some of the acquiring firm’s poorly performing units ;the acquiring and acquired firms have experience in terms of adapting to change ;R&D and innovation are emphasized in the new firm.
6. What are the differences between the general environment and the industry environment? Why are the differences important?
Compare with the general environment, the industry environment has a more direct effect on the firm’s strategic actions .The five forces model of competition includes the threat of entry, the power of suppliers, the power of buyers, product substitutes, and the intensity of rivalry among competitors.
7. What are the four criteria ud to determine which of a firm’s capabilities are core competencies?
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Only when a capability is valuable, rate, costly to imitate, and nonsubstitutable is it a core competence and a source of competitive advantage.
8. What are vision and mission? What is their value for the strategic management process?
阅读记录卡内容 Vision is a picture of what the firm wants to be and, in broad terms, what it wants to ultimately achieve. Vision is ”big picture” thinking with passion that helps people feel what they are suppod to be doing.
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