Strategic Management Discussion Questions

Discussion Questions p. 72 1-4.

1.Under what environmental conditions are price wars most likely to occur in an industry? What are the implications of price wars for a company? How should a company try to deal with the threat of a price war?

2.Discuss the competitive forces model with reference to what you know about the US mar- ket for wireless telecommunications services (see the Opening Case). What does the model tell you about the level of competition in this industry?

3.Identify a growth industry, a mature industry, and a declining industry. For each industry,

4. Assess the impact of macroenvironmental factors on the likely level of enrollment at your university over the next decade. What are the implications of these factors for the job security and salary level of your professors?

Discussion Questions p. 105 1-5

1.What are the primary implications of the material discussed in this chapter for strategy formulation?

2.When is a company’s competitive advantage most likely to be sustained over time?

3. It is possible for a company to be the lowest-cost producer in its industry and simultaneously have an output that is the most valued by customers. Discuss this statement.

4. Why is it important to understand the drivers of profitability as measured by the return on in- vested capital?

5. Which is more important in explaining the success and failure of companies: strategizing to create valuable resources, or luck?

Discussion Questions on p. 167  1-5.

1.What are the main differences between a low- cost strategy and a differentiation strategy?

2.Why is market segmentation such an important step in the process of formulating a business- level strategy?

3.How can a business-level strategy of (a) low cost and (b) differentiation offer some protection against competitive forces in a company’s industry?

4. What is required to transform a business-level strategy from a concept to a reality?

5. What is meant by the term value innovation? Can you identify a company not discussed in the text that has established a strong competitive position through value innovation?

Discussion Questions p. 198 1-5.

1. Why are industries fragmented? What are the primary ways in which companies can turn a fragmented industry into a consolidated industry?

2. What are the key problems in maintaining a competitive advantage in embryonic and growth industry environments? What are the dangers associated with being the leader in an industry?

3. What investment strategies should be made by: (a) differentiators in a strong competitive position, and (b) differentiators in a weak competitive position, while managing a company’s growth through the life cycle?

4. Discuss how companies can use: (a) product differentiation, and (b) capacity control to manage rivalry and increase an industry’s profitability.

5. What strategies might these enterprises use to strengthen their business models (a) a small piz- za place operating in a crowded college mar- ket, and (b) a detergent manufacturer seeking to unveil new products in an established market?

Discussion Questions on p. 233-234  (1-6).

1. What is different about high-tech industries? Were all industries once high-tech?

2. Why are standards so important in high-tech industries? What are the competitive implications of this?

3. You work for a small company that has the leading position in an embryonic market. Your boss believes that the company’s future is ensured because it has a 60% share of the market, the lowest cost structure in the industry, and the most reliable and highest-valued product. Write a memo to your boss outlining why the assumptions posed might be incorrect.

4. You are working for a small company that has developed an operating system for PCs that is faster and more stable than Microsoft’s Windows operating system. What strategies might your company pursue to unseat Windows and establish its own operating system as the dominant technical standard in the industry?

5. You are a manager for a major record label. Last year, music sales declined by 10%, primarily because of illegal file sharing. Your boss has asked you to develop a strategy for reducing illegal file sharing. What would you suggest that the company do?

6. Reread the Strategy in Action 7.1, on Micro- soft’s “segment zero” threat. Do you think one operating system for smartphones or tablets will become dominant? If so, which one and why?