Strategic Management

Instructions

Part I of this exam includes 8 questions, each drawn from one or more chapters of the text and each requiring both reflection and critical thinking [i.e, something beyond simply defining or explaining a concept using textbook language]. Please be sure to answer each question completely, referencing a specific page[s] from your text as needed - and using the correct APA citation. One word or one sentence answers will not be sufficient to answer each question completely enough. If there are multiple parts to the question, please make sure you answer each part of the question. Be sure to check for spelling and grammar as well. It counts.

Part II includes 3 short-answer essay "caselettes", each of which presents an abbreviated case situation followed by one or more questions. Please make sure to answer each question/sub-question thoroughly using the correct APA citation if appropriate. As with Part I, one-word or one sentence answers will not be sufficient to answer each question completely enough. If there are multiple parts to the question, please make sure you answer each part of the question and, of course, be sure to check for spelling and grammar as well.

1. Explain the relationship of the strategic management process to organizational ethics.

2. Describe the six segments of the general environment.

3. Describe and discuss the resource-based model of above-average returns.

4. When a firm chooses a business-level strategy, it must answer the questions: Who? What? and How?� What are these questions and why are they important?

5. Who are the firm's strategic leaders? How do strategic leaders predict the profit outcomes of different strategic decisions?

6. Discuss how a cost leadership strategy can allow a firm to earn above-average returns in spite of strong competitive forces. Address each of the five competitive forces.

7. Describe the four specific criteria that managers can use to decide which of their firm's capabilities have the potential to create a sustainable competitive advantage.

8. Describe a value chain analysis. How does a value chain analysis help a firm gain competitive advantage?

9. Case Scenario: B.B. Mangler.
B.B. Mangler is a top U.S. business-to-business distributor of maintenance, repair, and service equipment, components, and supplies such as compressors, motors, signs, lighting and welding equipment, and hand and power tools. Its industry is typically referred to as MRO, which is an acronym for maintenance, repair, and supplies. MRO products are typically small, fairly inexpensive (light bulbs and washers), but often needed on short notice. It states its strategy as having the capacity to offer an unmatched breadth of lowest total cost MRO solutions to business.Mangler's GoMRO sourcing center for indirect spot buys locates products through its database of 8,000 suppliers and 5 million products. Mangler has 388 physical branches in the U.S., including Puerto Rico (90% of sales), 184 in Canada, and 5 in Mexico. Customers include contractors, service and maintenance shops, manufacturers, hotels, governments, and health care and educational facilities. Mangler also provides materials-management consulting services.

How should Mangler respond to the threat of new Internet-based entrants?

10. Case Scenario: ERP Inc.
ERPI is a leading provider of enterprise integration software (EIS). EIS allows a firm to connect and integrate processes across all aspects of its business, regardless of where they are located around the world. ERPI is a product-focused company, whereas most competitors in its market space, like Oracle, operate as solutions companies.Oracle and Microsoft have begun to devote considerable resources to the development of and acquisition of products to compete in the EIS space. Despite these recent threats, one benefit of its product-focused strategy is that ERPI's proprietary product is generally recognized as being 200% to 300% better than competitors' software. ERPI estimates it will take 2 to 3 years for competitors to develop the capabilities needed to bring a competing product to market. ERPI invests a considerable percentage of its profits in basic R&D to support its core products. As evidence of this, among its competitors the firm maintains the largest in-house programming staff dedicated solely to the development of advanced enterprise integration software. Installation and related consulting for EIS typically cost between $100 and $200 million, with the ERPI software component accounting for about 20% of the installed cost (the remaining 80% is spent on the actual installation, not counting the value of the customer's time). ERPI's target market consists of the world's largest manufacturing and industrial firms and it currently enjoys a 60 percent market share.

Imagine that ERPI's historic growth strategy has focused on making one sale and then moving on to the next target company. After several years of building market share using this approach, what new resources has ERPI developed?

11. Case Scenario: Abrahamson's Jewelers.
Through its sole location in an affluent suburb of San Francisco, Abrahamson's Jewelers has established a strong niche market in the upscale jewelry store segment. Abrahamsonâ??s was founded in 1871 and is currently owned and operated by John Wickersham, who bought the firm from its namesake founders in 1985. Wickersham joined the firm as a trainee out of high school, completed his gemology training, and several years later took ownership with the financial help of his parents. That debt has long been paid off and business has thrived. When he first acquired the business, Abrahamson's offered a full range of jewelry and gift items from watches to wedding sets to silverware to clocks. This broad range of products was mirrored by a broad price range-$10,000 Rolex watches were sold next to $50 Seiko watches. While some jewelry was custom designed and manufactured, most of the products were â??case ready,â? meaning they were sourced from large jewelry and silver manufacturers from around the world. Over the last 15 years, Wickersham has narrowed the company's product offering considerably to focus only on high-end watches like Rolex and Piaget, custom jewelry, and estate jewelry. Wickersham stresses that this is an appropriate focus for his business since each of the products lends itself to relationship selling, and price rarely comes into the discussion. Despite the narrower offering moreover, Abrahamson's floor space has doubled, and clients are intensely loyal to the good taste, design skills, and personal service level provided by Mr. Wickersham.

What generic business strategy best describes Abrahamsons? Why?