mqm_exam_1_solutions - EXAM 1 MQM 385 Student Name Student...

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EXAM 1: MQM 385 Student Name:_________________________________ Student Id:_____________________ Questions 1-3 are 10 points each (TOTAL 30 POINTS) 1. Define and then relate the concepts of sectors, industries, market segments, and strategic groups. ANS :All of these concepts are useful in terms of understanding the nature of competition and the forces in the industry environment that affect performance. A skilled strategic manager must take all of these into account when developing strategies. A sector refers to a group of closely related industries. In terms of scope, sectors encompass the broadest set of firms. A sector is typically composed of several interrelated industries. An industry refers to a group of companies offering products and services that are close substitutes for each other. Market segments refer to a distinct group of customers within an industry market that can be differentiated from each other on the basis of their distinct attributes and specific demands. A strategic group is a group of companies within an industry in which each company follows a business model that is similar to that pursued by other companies in the group. A useful way to look at a strategic group is as an intersection of market segments and industries. The concept of a strategic group is especially useful in the strategy process because it helps a company determine its direct competition. 2. Identify and discuss the four building blocks of competitive advantage. ANS : The four building blocks of competitive advantage are superior efficiency, quality, innovation, and customer responsiveness. These building blocks allow a company to differentiate its product offering to provide more utility to customers and/or lower its cost structure. Superior efficiency is viewed from the perspective of the producers in an industry. It is powerful because it allows a company to increase the productivity of its employees and capital and thus reduce its cost structure.
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