Quiz 1: Strategic Management and Strategic Competitiveness
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1.Define strategic competitiveness and above-average returns. What is the relationship between
strategic competitiveness and returns on investment? [Xác định khả năng cạnh tranh chiến lược và lợi
nhuận trên trung bình. Mối quan hệ giữa năng lực cạnh tranh chiến lược và lợi tức đầu tư là gì?]
Strategic competitiveness is achieved when the firm successfully formulates and implements a value-
creating strategy. Above-average returns are returns in excess of what investors expect to earn from other
investments with similar risk levels. Firms will only be able to earn above-average returns if they develop a
competitive advantage. Competitive advantage derives from a strategy that competitors cannot duplicate or find
too costly to imitate.
2.Hypercompetition is a characteristic of the current competitive landscape. Define
hypercompetition and identify its primary drivers. How can organizations survive in a hypercompetitive
environment? [Hypercompetition là một đặc điểm của bối cảnh cạnh tranh hiện tại. Xác định siêu cạnh
tranh và xác định trình điều khiển chính của nó. Làm thế nào các tổ chức có thể tồn tại trong một môi
trường siêu cạnh tranh?]
Hypercompetition is a condition of rapidly escalating competition based on price-quality positioning,
competition to create new knowledge and establish first-mover advantage, and competition to protect or invade
established product or geographic markets. In hypercompetition, firms aggressively challenge their competitors.
Markets are assumed to be inherently unstable and changeable. The two primary drivers of hypercompetition are
the global economy and rapid technological change. To survive in a hypercompetitive environment firms need
strategic flexibility. This demands continuous
learning which allows the firm to develop new skills so that they can adapt to the changing environment
and to consistently engage in change.
3.Describe the industrial organization [I/O] model of above-average returns. What are its main
assumptions? What is the key to success according to the I/O model?
The I/O model of above-average returns argues that the external environment is the primary determinant of
firm success, rather than the firm's internal resources. The model has 4 underlying assumptions:
1] The external environment is assumed to impose pressures and constraints that determine the strategies
that would result in above-average returns.
2] Most firms competing within a particular industry, or in a certain segment of the industry, are assumed
to control similar strategically relevant resources and pursue similar strategies in light of those resources.
3] Resources used to implement strategies are mobile across firms, which results in resource differences
between firms being short-lived.
4] Organizational decision makers are assumed to be rational and committed to acting in the firm's best
interests as shown by their profit maximizing behaviors.
The key to success according to the I/O model is to find the most attractive industry [the one with the
highest profit potential] in which to compete.
4.Describe and discuss the resource-based model of above-average returns.
The resource-based model focuses on the firm's internal resources and capabilities. These resources and
capabilities determine the firm's strategy and its ability to earn above-average returns. The firm's resources are
inputs into its production process. Resources must be formed into capabilities, the capacity to perform a task or
activity in an integrative manner. According to this model, capabilities evolve over time and must be managed
dynamically to achieve above-average returns. Resources and capabilities that give a firm a competitive
advantage are called core competencies. This model assumes that resources are not highly mobile across firms;
consequently, all firms within a particular industry may not possess the same strategically relevant resources and
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