Example 1 bu481 midterm 2 questions list 1 2 2010 3

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BU481 – Midterm #2 Questions- List 1 & 2 2010 3. What is the role of management preferences in evaluating and selecting a particular strategic proposal? What factors are at play? Please provide an example covered in the textbook or discussed in class. The Role of Management Preferences o Your personal preferences; what you want the business to accomplish and how you think it should be done play an inevitable and critical role. o On the positive side, preferences serve to focus and motivate the efforts of the firm. The realties of the external environment and internal circumstances seldom determine a single feasible course of action. Therefore, there is a driving force needed to take hold of the situation and press for choices and performance. o On the negative side management preferences may lead to pressures for inappropriate ventures, potential inflexibility, a focus on personal vs. shareholder interests and so on. The roots of strategic preference Basic needs – refers to central aspects of a managers personality. Beliefs – over the years, managers build up beliefs about their own competences, about the capabilities of their colleagues, and about the right way to handle strategic issues. Example : 4. Define and describe the concept of “Entrepreneurial Personality” as defined by “Ket deVries”. How does this concept affect strategic formulation, alternative analysis and recommendation? What options are available when the concept applies to a business situation? 5. According to M. Porter in his article “Strategy & the Internet”, what is the overall impact of the internet on industry attractiveness and what options (2) are available to General Managers to best address these impacts? Overall impact of the internet on industry attractiveness o Negative overall impact. o Threat of new entry – stronger lower entry barriers Existing rivalry – stronger less differentiation, more emphasis on price, more competitors Buyer power – stronger More access to real time information, little perceived differentiation, geographic boundaries reduced. Supplier power – weaker Firms act as buyers, supplier info becomes more transparent Threat of substitutes – stronger More information about existing options. 2 Options available to GM’s to best address these impacts: 1. Achieve operational effectiveness- operate a lower cost or command a premium price, or do both. To maintain a sustainable competitive advantage, must surpass competitors in operational effectiveness (internet makes this difficult since complex applications and solutions are now more accessible to all companies) 2. Engage in strategic positioning-doing things differently from competition. 2
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BU481 – Midterm #2 Questions- List 1 & 2 2010 6. According to the article “The growth crisis and how to escape it”, define and describe the factors (3) that limit profitable growth and what are the implications for strategy formulation?
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