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Name ______________________________________________

BADM 450 – Exam 2

PART I (50 points)

1. What is the difference between a cost leadership business-level strategy and a focused cost leadership business-level strategy? (10 points)

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2. What is the difference between a differentiation business-level strategy and a focused differentiation business-level strategy? (5 points)

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3. What are two risks associated with using a cost leadership business-level strategy? (4 points) (a)___________________________________________________________________________

(b)_____________________________________________________________________________

4. What are two risks associated with using a focused differentiation business-level strategy? (4 points)

(a)___________________________________________________________________________

(b)__________________________________________________________________________

5. What are two risks associated with using an integrated cost leadership/differentiation strategy? (4 points)

(a)___________________________________________________________________________

(b)___________________________________________________________________________

6. What is a corporate-level strategy? (5 points)

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7. Can a firm use a corporate-level strategy and a business-level strategy simultaneously? Explain. (4 points)

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8. What are three reasons firms choose to diversify their operations? (6 points)

(a) ________________________________________________________________________

(b) ________________________________________________________________________

(c) ________________________________________________________________________

9. What is vertical integration? (4 points) ____________________________________________________________________________________________________________________________________________________________
10. In what two ways can value be created with an unrelated diversification strategy. (4 points)

(a)___________________________________________________________________________

(b)_____________________________________________________________________________

PART II (50 points)

Select one of the following cases and answer the following questions.

___ Starbucks    ____ Siemens   ___ Southwest Airlines

 

1. What are three of the firm’s core competencies? (6 points) __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

 

2. Which two of the firm’s core competencies are likely to provide the firm with a sustainable competitive advantages? Why? (10 points)

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3. What is an industry? (4 points) ___________________________________________________________________________________________________________________________________________________________

 

4. What industry is this company a part of? (5 points) ____________________________________________________________________________________________________________________________________________________________

 

5. How would you use the Standard Industrial Classification System (SIC) or the North American Industry Classification System (NAICS) to evaluate this industry? (5 points)

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6. Use Porter’s five to evaluate the attractiveness of this industry? (10 points)

Assign a value to rate the importance of each of Porter’s five forces to this industry on a 1 (not important) to 5 (very important) scale.  Then assign a value to reflect the threat that each force poses as a threat to the industry on a scale of 1 (low threat) to 5 (high threat).   What is minimum score?  _______ What is maximum score?  _______ What is the attractiveness score for this industry?  _______ Show calculations in table below.
Porter’s  Five Forces	Importance (1-5) (1 = not important, … 5 = very important)	Threat(s) to Industry (1-5) (1 = Low,  3 = Medium, 5 = High)	Weighted Score
Total   _____

 

 

 

7. What other forces in the general external environment might have impacted the attractiveness of the industry? (10 points)

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