Chapter 1: Strategic Management: Creating Competitive Advantages

1. How is "strategic management" defined in the text and what are its five key attributes?
2. Briefly discuss the three key activities in the strategic management process. Why is it important for
managers to recognize the interdependent nature of these activities?
3. Explain the concept of "stakeholder management"? Why shouldn’t managers be solely interested in
stockholder management, that is, maximizing the returns for owners of the firm—its shareholders?
4. How can "symbiosis" (interdependence, mutual benefit) be achieved among a firm’s stakeholders?
5. What are some of the major trends that now require firms to have a greater strategic management
perspective and empowerment in the strategic management process throughout the firm?
6. What is meant by a "hierarchy of goals"? What are the main components of it and why must
consistency be achieved among them?

Chapter 2: Analyzing the External Environment of the Firm

1. Why must managers be aware of a firm’s external environment?

2. What is gathering and analyzing competitive intelligence and why it is important for firms to engage
in?
3. Discuss and describe the six elements of the external environment.
4. Select one of these elements and describe some changes relating to it in an industry that interests
you.
5. Describe how the five forces can be used to determine the average expected profitability in an
industry.
6. Explain how the general environment and industry environment are highly related. How can such
interrelationships affect the profitability of a firm or industry?
7. Explain the concept of strategic groups. What are the performance implications?

Chapter 3: Assessing the Internal Environment of the Firm

1. SWOT analysis is a technique to analyze the internal and external environment of a firm. What are
its advantages and disadvantages?
2. Briefly describe the primary and support activities in a firm’s value chain.
3. How can managers create value by establishing important relationships among the value-chain
activities both within their firm and between the firm and its customers and suppliers?
4. Briefly explain the four criteria for sustainability of competitive advantages.
5. What are the advantages and disadvantages of conducting a financial ratio analysis of a firm?
6. Summarize the concept of the balanced scorecard. What are its main advantages?

Chapter 4: Recognizing a Firm’s Intellectual Assets: Moving Beyond a Firm’s

Tangible Resources

1. Explain the role of knowledge in today’s competitive environment.

2. Why is it important for managers to recognize the interdependence in the attraction, development,
and retention of talented professionals?
3. Discuss the need for managers to use social capital in leveraging their human capital both within
and across their firm.
4. Why are teams so valuable in combining and leveraging knowledge in organizations?
5. Discuss the key role of technology in leveraging knowledge and human capital.

Chapter 5: Business-Level Strategy: Creating and Sustaining Competitive

Advantages

1. Explain why the concept of competitive advantage is central to the study of strategic management.
2. Briefly describe the three generic strategies: overall cost leadership, differentiation, and focus.
3. Explain the relationship between the three generic strategies and the five forces that determine the
average profitability within an industry.
4. Describe some of the pitfalls associated with each of the three generic strategies.
5. Can firms combine the generic strategies of overall cost leadership and differentiation? Why or why
not?
6. Explain why the industry life cycle concept is an important factor in determining a firm’s business-
level strategy.

Chapter 6: Corporate-Level Strategy: Creating Value Through Diversification

1. Discuss how managers can create value for their firm through diversification efforts.
2. What are some of the reasons that many diversification efforts fail to achieve desired outcomes?
3. How can companies benefit from related diversification? Unrelated diversification? What are some
of the key concepts that can explain such success?
4. Discuss some of the various means that firms can use to diversify. What are the pros and cons
associated with each of these?
5. Discuss some of the actions which managers may engage in to erode shareholder value.

Chapter: 7 International Strategy: Creating Value in Global Markets

1. What are some of the advantages and disadvantages associated with a firm’s expansion into
international markets?
2. What are the four factors described in Porter’s diamond of national advantage? How do the four
factors explain why some industries in a given country are more successful than others?
3. Explain the two opposing forces—cost reduction and adaptation to local markets—that firms must
deal with when they go global.
4. There are three basic international strategies—global, multidomestic, and transnational. What are
the advantages and disadvantages associated with each?
5. Describe the basic entry strategies that firms have available when they enter international markets.
What are the relative advantages and disadvantages of each?

Chapter 8: The Internet and E-Commerce: Creating Value Through E-Business

Strategies

1. How do Porter’s five competitive forces affect companies that compete primarily on the Internet?
Provide an example.
2. What effects does the Internet have on the three competitive strategies—overall low-cost,
differentiation, and focus? How does this relate to a firm’s competitive advantage?
3. What effect does e-commerce have on the profitability an industry is able to achieve? How can
companies use e-commerce to enhance their own profitability?
4. Explain the difference between the effective use of technology and the technology itself in terms of
achieving and sustaining competitive advantages.
5. Describe how the three competitive strategies can be combined to create competitive advantages
when firms compete primarily by means of e-commerce.

Chapter 9: Implementing Strategy: Achieving Effective Strategic Control

1. Why are effective strategic control systems so important in today’s economy?

2. What are the main advantages of "contemporary" control systems over "traditional" control
systems? What are the main differences between these two systems?
3. Why is it important to have a balance between the three elements of behavioral control—culture,
rewards and incentives, and boundaries?
4. Boundaries become less important as a firm develops a strong culture and reward system. Explain.
5. Why is it important to avoid a "one best way" mentality concerning control systems? What are the
consequences of applying the same type of control system to all types of environments?
Chapter 10 : Implementing Strategy: Creating Effective Organizational Designs

1. Why is it important for managers to carefully consider the type of organization structure that they
use to implement their strategies?
2. Briefly trace the dominant growth pattern of major corporations from simple structure to
functional structure to divisional structure. Discuss the relationship between a firm’s strategy and its
structure.
3. What are the relative advantages and disadvantages of the types of organization structure—simple,
functional, divisional, matrix—discussed in the chapter?
4. When a firm expands its operations into foreign markets, what are the three most important
factors to take into account in deciding what type of structure is most appropriate? What are the
types of international structures discussed in the text and what are the relationships between
strategy and structure?
5. Briefly describe the three different types of boundaryless organizations: barrier-free, modular, and
virtual.
6. What are the advantages and disadvantages of the three types of boundaryless organizations:
barrier-free, modular, and virtual?

Chapter 11: Effective Strategic Leadership: Creating a Learning Organization

and an Ethical Culture

1. Three key activities—setting a direction, designing the organization, and nurturing a culture and
ethics—are all part of what effective leaders do on a regular basis. Explain how these three activities
are interrelated.
2. The knowledge a firm possesses can be a source of competitive advantage. Describe ways that a
firm can continuously learn to maintain its competitive position.
3. How can the five central elements of "learning organizations" be incorporated into global
companies?
4. What are the benefits to firms and their shareholders of conducting business in an ethical manner?
5. Firms that fail to behave in an ethical manner can incur high costs. What are these costs and what is
their source?

Chapter 12: Effective Strategic Leadership: Fostering Corporate

Entrepreneurship and New Venture Creation

1. What is the difference between discovery and formation in the process of opportunity recognition?
Give an example of each.
2. How can bootstrapping help a young start-up or small business minimize its resource
requirements? How would this impact decisions about strategic positioning?
3. What is the role of the product champion in bringing a new product or service into existence in a
corporation? How can companies use product champions to enhance their venture development
efforts?
4. Explain the difference between proactiveness and competitive aggressiveness in terms of achieving
and sustaining competitive advantage.
5. Describe how the entrepreneurial orientation (EO) dimensions of innovativeness, proactiveness,
and risk taking can be combined to create competitive advantages among entrepreneurial firms.