Exam 1: What Is Strategy and the Strategic Management Process

Strategic choices are generally limited to very experienced senior managers in large corporations; in smaller and entrepreneurial firms, many employees end up being involved in the strategic management process.

A firm's ________ is its long-term purpose that defines both what it aspires to be in the long run and what it wants to avoid in the meantime.

One of the first scholars to examine the longevity of competitive advantage was

The cost of equity is equal to the interest a firm must pay its debt holders in order to induce those debt holders to lend money to the firm.

A sequential set of analyses and choices that can increase the likelihood that a firm will choose a strategy that generates competitive advantages is the

Liquidity ratios are ratios that focus on the firm's ability to meet its short-term financial obligations.

There is complete consensus among strategic managers and academic researchers about what a "strategy" is.

Thermacorp's weighted average cost of capital is 13.5. If the average WACC in the heating and cooling industry is 19, Thermacorp can be said to be earning

All firms have almost entirely emergent strategies.

Define the term "strategy," discuss the set of assumptions and hypotheses that a strategy is based on and discuss what makes a good strategy.

It is usually possible to know for sure that a firm is choosing the right strategy.

Activity ratios are ratios with some measure of profit in the numerator and some measure of firm size or assets in the denominator.

Waring found that firms that operate in industries that are informationally complex, require customers to know a great deal in order to use the industry's products, require a great deal of R & D, and have significant economies of scale are more likely to have sustained competitive advantage than those firms in industries without those characteristics.

A firm that is able to attract additional capital because debt holders and equity holders will scramble to make additional funds available for it is likely earning

________ are specific measurable targets a firm can use to evaluate the extent to which it is realizing its mission.

Theories of how to gain competitive advantage in an industry that emerge over time or that have been radically reshaped once they are initially implemented are known as

Why is it important to understand a firm's strategy, even if you are not a senior manager in a firm?

When a firm is able to create more economic value than rival firms it is said to have a(n)

The realized strategy of most firms tends to be

The strategic management process is a sequential set of analyses and choices that can increase the likelihood that a firm will choose a good strategy that generates competitive advantages.