BUS 450 Exam 2 Study Guide

Exam 2 Study Guide

 

Exam 2 will cover Chapters 4, 5, and 6 and will consist of no more than 50 multiple choice questions and no more than 3 short answer questions. You will be given a maximum of 60 minutes to complete the exam.

 

As you observed from Exam 1, the self-graded quizzes on the McGraw Hill website and the Learning Module Assignments (LMAs) you have spent so much time and effort completing are far from “busywork.” In fact, they are your study guide and are essential to doing well on Exam 1. Those who understand the concepts advanced in the LMAs and self-graded quizzes will find the exam to be straightforward.

 

How do I prepare?

To prepare for your exam, I recommend that for each concept covered in Chapters 4-6 of our textbook, you should be prepared to a) define it, b) explain its importance to effective strategy making/execution, and c) demonstrate your ability to apply it in a short answer format. Also, you should be prepared to define and apply each of these concepts in the context of organizational strategy (“a” module assignments) or career strategy (“b” module assignments).

 

The following charts might be helpful in this regard:

Definition	Locate the definition of this term, principle or analytical tool in your textbook or other source material. Then, in your own words, define and/or describe the term, principle or analytic tool.
Importance	Describe why it is important for strategists to have or make use of this term concept, tool or principle. For example, why should every organization set financial and strategic objectives?   What are the consequences for not having this? For example, what are the consequences if an organization attempts to compete without clear financial and strategic objectives?
Application	Describe how to apply this term, tool or concept to improve an organization’s strategy and competitiveness. In the case of an analytical tool, you should be able to describe, STEP BY STEP, how to conduct the analysis.

 

 

 

 

Strategy Concepts Covered	Chapter #	You should know the following for each of these concepts.
Value Chain Analysis	4	Definition, Importance, Application
Resources and Capabilities Analysis	4	Definition, Importance, Application
SWOT Analysis	4	Definition, Importance, Application
Competitive Strength Assessment	4	Definition, Importance, Application
Strategic Issue Identification	4	Definition, Importance, Application
Generic Strategy Analysis: Strategic Intent	5	Definition, Importance, Application
Generic Strategy Analysis: Basis of Competitive Strategy	5	Definition, Importance, Application
Generic Strategy Analysis: Product Line	5	Definition, Importance, Application
Generic Strategy Analysis: Production Emphasis	5	Definition, Importance, Application
Generic Strategy Analysis: Marketing Emphasis	5	Definition, Importance, Application
Generic Strategy Analysis: Keys to Maintaining Strategy	5	Definition, Importance, Application
Generic Strategy Analysis: Resources and Capabilities Analysis	5	Definition, Importance, Application
Financial Analysis: Profitability Ratios	5	Definition, Importance, Application
Financial Analysis: Liquidity Ratios	5	Definition, Importance, Application
Financial Analysis: Leverage Ratios	5	Definition, Importance, Application
Offensive Strategic Moves	5	Definition, Importance, Application
First Mover Advantage	6	Definition, Importance, Application
Defensive Strategic Moves	6	Definition, Importance, Application
Timing of Strategic Moves	6	Definition, Importance, Application
Horizontal Integration/Strategic Alliances	6	Definition, Importance, Application
Vertical Integration	6	Definition, Importance, Application
Outsourcing	6	Definition, Importance, Application

 

In summary, if you can define, understand and apply the concepts above or in bold print below, you will likely do very well on the exam. Good luck!

 

Chapter 4 Study Guide

This Learning Module involves answering six key questions which are critical in evaluating an organization’s ability to compete successfully:

 

1. How well is the company’s present strategy working?
   1. What moves has the company’s leadership made recently in pursuing the organization’s goals?
   2. What have the company’s leaders done recently to improve the organization’s competitiveness?
   3. How well is the organization’s strategy working?
2. What competitively important resources and capabilities is the company leveraging to outcompete its rivals? (resource and capability analysis)
   1. Identify the organization’s resources and capabilities (pgs 96-99)
   2. Test the competitive power of these resources and capabilities (pgs 100-101; also, the chart at the end of this document may be useful)
3. How is the company doing in terms of seizing market opportunities and nullifying external threats? (SWOT analysis, Table 4.3)
   1. What is a SWOT analysis and why is conducting a SWOT analysis important for determining competitive success?
      1. Strengths –identify the company’s strengths
         1. What are the company’s competencies?
         2. What are the company’s core competencies?
         3. What are the company’s distinctive competencies?
      2. Weaknesses– identify the company’s weaknesses
         1. What competitive deficiencies may be hindering the company’s current or future competitiveness (next five years)?

• Opportunities-identify the company’s opportunities
  1. What opportunities does the company appear to be pursuing in the next five years?

1. Threats-identify the company’s threats
   1. Identify the threats to the company’s future prospects.
   2. What strategic actions can be taken to neutralize or lessen their impact?
2. What conclusions can you draw from this analysis concerning the company’s competitive situation (e.g. alarmingly weak to exceptionally strong, attractive or unattractive, etc)? (pg 107-108; Figure 4.2)
3. What strategic actions can the company take to better match its strategy to its internal strengths and external opportunities, to correct important weaknesses, and to defend against external threats? (pg 107-108; Figure 4.2)

4. Are the company’s prices and costs competitive with those of its rivals and does it have an appealing customer value proposition?
   1. What specific tactics or resources could the company employ to benchmark its characteristics against those of its competitors to assess the organization’s competitiveness?
   2. What “best practices” are the company’s competitors using?
5. Is the company competitively stronger or weaker than its rivals?
   1. What is a Competitive Strength Assessment and how can conducting one help to strengthen the company’s strategy?
   2. Using Table 4.4 as a guide, conduct a Competitive Strength Assessment of the company’s professional situation.
   3. Based on this assessment, what specific strategic actions should the company take to improve the organization’s competitiveness?
6. What strategic issues and problems merit front-burner managerial attention?
   1. Which strategic issues should be on the company’s “worry list”? (pg 125)
   2. Indicate the seriousness of each of these items (e.g very serious – not very serious)

 

 

Chapter 5 Study Guide

1. Utilizing Table 5.1 in Chapter 5, describe which of the five generic competitive strategies best characterizes a company’s strategic approach.
   1. Strategic intent
   2. Basis of your competitive strategy
   3. Product line
   4. Production emphasis
   5. Marketing emphasis
   6. Keys to maintaining your strategy
   7. Resources and capabilities required
2. Use the financial ratios in Table 4.1 in Chapter 4 to demonstrate how to continuously measure and improve strategic and financial performance.
   1. Describe what profitability ratios are and how they can be used to measure and improve financial performance.
      1. In addition, identify which of these ratios are most appropriate for a particular firm’s financial strategy.
   2. Describe what liquidity ratios are and how to use them to measure and improve financial performance.
      1. In addition, identify which of these ratios are most appropriate for a particular financial strategy.
   3. Describe what leverage ratios are and how to use them to measure and improve financial performance.
      1. In addition, identify which of these ratios are most appropriate for a particular financial strategy.

 

Chapter 6 Study Guide

1. Explain what is meant by the notion of offensive strategic moves.
   1. What offensive strategic moves should company leadership consider to improve the organization’s competitiveness?
   2. Identify at least 2 offensive actions that company leadership has taken recently.
   3. Identify at least 2 offensive moves that company leadership should seriously consider to improve its competitiveness.
2. Explain what is meant by the notion of first-mover advantage.
   1. What options for being a first mover does the company have?
   2. Do any of these first-mover options hold competitive advantage potential?
3. Explain what is meant by the notion of defensive strategic moves.
   1. What defensive strategic moves should company leadership consider to improve its competitiveness?
   2. Identify at least 2 defensive actions that company leadership has taken recently.
   3. Identify at least 2 defensive moves that company leadership should seriously consider to protect its market share and improve its competitive standing.
4. Explain what is meant by the notion of strategic alliances and horizontal integration.
   1. With whom could the company form a strategic alliance, merge with or acquire in order to increase the organization’s competitiveness and protect market share?
5. Explain what is meant by the notion of a company value chain.
   1. List the activities that comprise the company’s value chain.
   2. Are any of these value chain activities unnecessary or detrimental to the company’s strategy (i.e. minimizing expenses, maximizing revenue and competitiveness)?
   3. Identify those activities that are value adding, value destroying, or value neutral.
6. Explain what is meant by the notion of outsourcing.
   1. Are there value chain activities that the company is currently performing that if performed by another organization would increase the company’s revenues or reduce its expenses?