Chapter 1 Questions

1. What is competitive advantage, and how does it relate to a company’s business

model?
It is evident from the course materials that competitive advantage is defined as a state in which a
company enjoys success over its competitors. This takes place when a few items which are similar
to that of the competitors are conveyed at a cost that is lower than that of the rivals as well as when
they convey goods and services that are superior than those of the competitors and a reasonable
prices. Competitive advantage can be based on cost/pricing or process taken.
 Come up with a brand with an incentive which brings more customers
 Research more about clients interests which will help increase customer base
 Perfect brand imaging on all products on the market
2. Describe the strategic planning model, and who is involved in the strategy-making
process
The employees associated with strategy making process are known as corporate level managers,
business level managers or directors and functional level managers. The strategic planning
process deals with the below:
 Formulating the business vision as well as mission
 Determining external forces that affect the business so does the risks that come handy
 Analyzing external business opportunities and weaknesses
 Developing systems that support business success
 Implement and define business ideals and strategies
3. Describe the SWOT analysis, its components, and how it aids a company in making
strategic decisions. Provide examples of each component in the SWOT analysis.
SWOT simply means Strength, Weakness, Opportunities and lastly Threats
SWOT is a company or product assessment that deals with an organizations quality, openings,
risks and shortcomings that may come handy. It helps assess both internal and external
perspectives of an organization. It asserts the firms quality in order that the organization can be
able to deal with product development, its weaknesses so that it can improve on them to create a
competitive advantage, its opportunities to increase its market base and dominance and finally the
threats so that it can avoid them.
Examples:
 Strength: Money saving credit, increased innovation, motivated employees
 Weakness: Problems in staff management
 Opportunities: New administration and workforce
 Threats: Increased wage bill and new competitors
4. What are the various levels of management, and how do they participate in the
process of strategic decision making?
The different levels of management are:
 The corporate level of management includes the CEO, CFO and other corporate level
managers and employees.
 The CEO with all the other senior managers work on key choices of the organization. The
choices include definition of main objectives for the firm, assets management and resources
allotment are part of the functions.
 Business level managers include marketing department, sales department, finance
department, and office administration departments. The main administrator or general
 administrator exchanges information from top management level to middle level as well as
to lower levelled management or an organization.
 Functional level management deals with administration and includes: all the practical level
managers or administrators. The manager comes up with the rules and regulations so does
the procedures and this functional level managers help to execute the corporate needs.

Chapter 2 Questions
1. Define “Industry”, “Business” and “Sector”. How are these related?
Business is considered as a entity made of individuals and groups that come up together by a
certain reason or aim to bring and offer services and goods to the market with the aim of making
profits. On the other hand, an industry, it a collection of organizations that offer the same goods
and services and can be substituted by each other. A good example of such is soft drink
organizations. A segment means a certain large part of the economy. A dozen of such sectors form
up an economy. An organization under the similar sector can’t perform as an industry on the same
sector.
2. How can Porter’s five-forces model aid in strategic decision making?
Porter’s five-forces:
Potential New Entrants || Supplier Power || Buyer Power ||Threat of Substitute || Industry
Rivalry
With the help of porters five power forces model, the structure of an organization or industry at
large is able to be dictated by leaders in the market domain because these powers affect the profit
making decisions of an organization. It also affect, quality, cost and opportunities that come handy
in the industry. The use of porters forces model is to make sure that an organization is able to boost
the purchasing power of the buyers so does that of the suppliers. Porters forces is helpful to reduce
threats of substitute and reduce the level of industry rivals.
3. Describe how “Risk of Entry”, “Bargaining Power of Buyers”, “Bargaining Power of
Suppliers”, and industry competition (“Threat of Substitutes”) affect the external threats a
company faces. Provide examples of each.
Risk of Entry- Here it deals with potential competitors that are not currently competing with
others in the industry but are risk to those in the market domain. It is clear that the industry is at
risk of new firms yet to join the already flooded industry with new products and services that
quality could be lower or better threating the success of the already developed firms in the industry.
Bargaining Power of Buyers-Buyers are the kings in the market. They are the ones that complete
the entire cycle of business process. Once the buyers have a better or higher bargaining power,
they are able to make purchase at whichever cost but ready to be part of the decision making
process.
Bargaining Power of Suppliers-Suppliers are the ones important in the provision of new products
and goods in the market. For a progressive business, the suppliers out to be increased and their
cost reduced in order to reduce the cost of production. However, suppliers have power because
they are the primary sources. They can determine the prices of commodities in the market when
they posses the power, however, when they lose the power they have limited decision making
efforts in the process and could be disadvantaged.
 4. Describe the industry life cycle, what are strategic groups and what mobility barriers.
Embryonic- This is the first stage in the business life cycle. The business development process is
low at this phase since the customer does not know the cost of the item. It helps clients important
in determining cost, as well as the channel of distribution. Growth-. This comes into light when
the client requirement is met and adequate product in the market. Business developed starts when
the customer asserts to the cost of the product or service to be rendered. Distribution Channel is
already settled in this process. Shakeout- This stage is all about rendering the goods and services.
It takes place when the immersion point takes effect after the clients wants to buy the commodity.
Competition is high in this phase. Develop: Less competition is seen at this phase. The product
development ends, products are ready for the market. Mature-Development process is now over.
Products are ready for the market. Cost is down in order to increase clients purchasing power.
Case # 14 Given
1. Analyze the gastrointestinal endoscopy industry and identify where the key opportunities
and challenges are for Given.
Gastrointestinal endoscope industry from the case study is seen to have taken a turn with the
commence of PillCams. Given a good start of the industry until 2005. With the introduction of
Olympus in the market, competition started to increase thus, the quality of the pills in question
affected the cost thus the challenges that are handy. Given had only one supplier who supplied the
sensors and transmitter of the PillCam. Just because the suppliers has limited resistance, Given to
ended up paying for more increasing their business costs. However, an opportunity is using less
by having in-house collection of supplies. This will reduce cost of production thereby increasing
level of productivity.
Another challenge faced by the firm is the resistance from the market. There are many new
entrants in the market that threat the sale of the PillCams. In order for given to increase its
dominance, it should increase its marketing strategies however, it is already faced with this
challenge. This challenge can be turned into opportunity if Given can increase its camera quality.
2. What are some of Given’s advantages and weaknesses in this market?
Advantages: It is clear that one merit is that Given enjoys economies of scale offered by the
government of United States. The income level in the country is very high. This means that the
purchasing power of the buyers is low making them easy to make purchase even at high prices. It
is ideal to note that the ability of increasing sales is based on customers power to purchase a reason
of Givens, increased sales. Lastly, the citizens or the Americans are technology ready clients, this
helps the firm to make sales if their technologies developed.
Weaknesses: Being the first to producer of Cam Pill, the firm is faced with market resistances.
Quality production seems to a challenge to the company hence a weakness. The distribution system
is long, increasing delivery time.
 Reference

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: Theory & cases: An
integrated approach. Cengage Learning.