BUSI 690 Paper Exercise 1

Exercise One

Discussion Question 1.1

How is a strategy different from a business model?  How is it similar?

Discussion Question 1.2

Threadless (in Strategy Highlight 1.1) is an example of a firm building its customer base to use new products and also to participate in the design and vetting of popular designs.  In the summer of 2010, Dell Computer announced a partnership with Threadless for designs on its laptop computers.  For a small additional fee (and an extra day’s delay in shipping), you can get a Threadless design etched on your new Dell laptop.  Why do you think Dell is keen on offering this service?  What other firms use this crowdsourcing technique?  Where else might this type of business model show up in the future?

Discussion Question 1.3

As noted in the chapter, research found that firm effects are more important than industry effects.  What does this mean?  Can you think of situations where this might not be true?

Discussion Question 2.1

What characteristics does an effective mission statement have?

Discussion Question 2.2

What is strategic intent? How can it be useful for goal setting and achievement?

Discussion Question 2.3

In what situations is top down planning likely to be superior to bottom up emergent strategy development?

Discussion Question 2.4

Based on discussions in this chapter which railroad firm seems more prepared to use planned emergence, CSZ or Japan Railways? Why?

Discussion Question 2.5

Discuss how scenario planning can be used to prepare a firm for future events. Can some industries benefit more than others from this type of process?

Discussion Question 3.1

Why is it important for an organization to study and understand its external environment?

Discussion Question 3.2

How do the five competitive forces in Porter’s model affect the profitability of the overall industry?  For example, in what way might weak forces increase industry profits, and in what way do strong forces reduce industry profits?

Discussion Question 3.3

What is a strategic group? How can studying such groups be useful in industry analysis?

Discussion Question 3.4

How do mobility barriers affect the structure of an industry? How do they help us explain firm difference in performance?

Discussion Question 4.1

Why is it important to study the internal resources, capabilities, and activities of firms?  What insights can be gained?

Discussion Question 4.2

Strategy Highlight 4.2 explains IBM’s major transformation from a hardware to a services-oriented company.  List the major dynamic capabilities that enabled IBM to make this change.  Can you think of other firms that have been successful at a major transition such as this?

Discussion Question 4.3

The resource-based model identifies four criteria that firms can use to evaluate whether particular resources and capabilities are core competencies and can, therefore, provide a basis for competitive advantage.  Explain.  If (some of) the measures are interdependent, what implications does the fact have for managers wanting to create and sustain a competitive advantage?

Small Group Exercises 5.1

According to surveys from Bain & Company in recent years about 60% of firms in both public and private sectors have used a balance scorecard for performance measures. How do customers view us?  How do we create value? What core competencies do we need? How do shareholders view us?

Small Group Exercises 5.2

In the electronics retail industry, Circuit City filed for bankruptcy in the spring of 2009, but Best Buy continues on. Calculate some of the key profitability, activity leverage, liquidity, and market ratios for Best Buy and Circuit City. Can you find signs of performance differences between the two firms that may have indicated problems at Circuit City in 2007?