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Nhung ● Components of CSR (chap 1)

● Comparisons between
Top-down and Bottom-up
strategy planning, suitable
situations for each (chap 2)
Htrang Chapter 7,8,11 - làm để học ● 5 competitive forces in Porter’s
mcqs luôn (keyword) model
● Criteria of VRIO framework

Cấu trúc đề: 30 câu MCQs (x0.2 = 6 điểm), 02 câu short questions (x2.0 = 4
điểm)
Thời gian thi: 90 phút
Dạng đề: Closed-book

1. MCQs
1. Company X produces a hotdog bun that goes extremely well with
Company Y’s hotdog. Company X, therefore, is a _____ of Company Y.
A. direct competitor
B. complementor
C. indirect competitor
D. shareholder

2. Lan liked a pair of shoes and thought they would cost around 1 million
VND. She was surprised to find that the price of the shoes was 2 million
VND. However, she decided to buy them anyway. This scenario describes
A. consumer surplus.
B. producer surplus.
C. consumer profit.
D. producer profit.

3. California Fitness & Yoga Centers is a chain of gyms. It offers a fitness

package that allows its members to use the gym facilities for 12 months by
paying only for 10 months. Included in the package are two health
checkups and a gym kit. These add-ons by themselves are not very
valuable, but as a package they can enhance the perceived value of the
service offerings. In this case, its primary value driver is
A. economies of scale.
B. learning-curve effects.
C. availability of complements.
D. experience-curve effects.

4. Company X is a U.S.-based company. It owns smaller firms in China and

India where most of its products are developed and manufactured before
being released worldwide. Which of the following alternatives to
integration does this best illustrate?
A. venture capitalism
B. franchising
C. joint venture
D. parent-subsidiary relationship

5. In the AFI strategy framework, deciding what markets the firm should
compete is about choosing
A. business strategy
B. corporate strategy
C. global strategy
D. ethical strategy

6. Company X had a return on revenue of 13%, and Company Y had a

return on revenue of 17%. Even so, X had a higher return on invested
capital than Y. Explain the reason behind this.
A. X had a higher cost structure than Y.
B. X spent more on research and development and marketing and sales than Y.
C. X was able to charge a much higher margin for its products and services
than Y.
D. X had a much higher selling, general, and administrative expense than Y.

7. Minh paid 500,000 VND for a dress that she thought was worth 750,000
VND. For the manufacturer, the cost of producing the dress was 300,000
VND. What is the consumer surplus in this scenario?
A. 200,000 VND
B. 250,000 VND
C. 450,000 VND
D. 800,000 VND

8. In the growth stage of the industry life cycle

A. The consumer demand increases.
B. The prices of goods begin to rise.
C. The basis of competition moves away from process innovation.
D. The number of competitors decreases.
9. Amazon sells its e-book readers at the cost price of $150 each. However,
the company makes its profits when users have to buy ebooks. Which of the
following business models is Amazon implementing?
A. subscription-based business model
B. razor-razor-blade business model
C. pay-as-you-go business model
D. direct sales business model

10. Cost of production of a product is 350,000 VND. This product sells at

600,000 VND in the market. Considering its features, customers perceive its
value to be around 800,000 VND. What is the economic value created in
this scenario?
A. 200,000 VND
B. 350,000 VND
C. 450,000 VND
D. 800,000 VND

11. A recent graduate started her own company with an investment of 500
million dong. In the first year she made a profit of 100 million dong. If she
had taken up a job at a company, she would have earned 120 million as
salary per year. Also, she could have invested her capital, 500 million dong,
in treasury bonds and earned an interest of 50 million dong. Thus, the
amount 170 million dong (120 + 50) would be her
A. social cost.
B. break-even price.
C. reservation price.
D. opportunity cost.

12. A company tries to ensure that its products are free of harmful side
effects, the chemical waste generated in the manufacturing process is kept
to a bare minimum and is disposed of according to the regulations of the
Environmental Protection Agency. The management assesses its overall
performance based on these dimensions. Thus, the managers are applying
the _____ approach to measure firm performance.
A. economic value creation
B. shareholder value creation
C. triple-bottom-line
D. accounting profitability

13. The crossing-the-chasm framework is based on which tenet?

A. The number and size of competitors remain constant throughout the industry
life cycle.
B. Each stage of the industry life cycle is dominated by a different customer
group.
C. Industries tend to follow an unpredictable industry life cycle.
D. The supply and demand sides of the market remain constant irrespective of
the phase of the industry life cycle.

2. Short questions
ORGANIZATIONAL STRATEGY
1. Module Code: INS 2024
2. Number of credits: 3
3. Pre-requisite: INS2019 – Business Organization & Management
4. Required textbook(s)
[1]Frank, T. Rothaemel (2021) Strategic Management, 5th Ed., McGraw Hill
Education.

Content Topics
Chapter 1: ●Components of CSR
What strategy is? Gaining and sustaining ●AFI framework
competitive advantage ●Competitive
Stakeholders & their impact on strategies advantage/parity
The AFI framework
Chapter 2: ●Comparisons between
Vision, mission, values Top-down and Bottom-up
Formulating strategy across levels strategy planning, suitable
The strategic management process situations for each
●Vision, mission
Chapter 3: ●5 competitive forces in
The PESTEL framework Porter’s model
The Porter's five forces framework ●PESTEL
Chapter 4: ●Criteria of VRIO
Core competencies framework
The resource-based view ●Value chain
The value chain analysis
Chapter 5: ●Triple-bottom-line
Firm performance analysing methods ●Business models (agency,
Business models: What they are and some popular wholesale, freemium,
types bundling,…)
●Firm’s ratios (ex.
R&D/Revenue, return on
revenue,…)
Chapter 6: ●Value/Cost drivers
Business-level strategies ●Consumer/Producer
Differentiation strategy & value drivers surplus/Economic value
Cost-leadership strategy & cost drivers creation
Blue ocean strategy ●Strategies
Chapter 7: ●4 types of innovation
The innovation process ●4Is innovation process
Innovation and the industry life cyle ●Process/product innovation
Types of innovation ●Industry life cycle –
Crossing the chasm
framework – Types of
consumers
●(Social) Entrepreneur
Chapter 8: ●Principal-agent problems
What is corporate strategy? ●Information asymmetry
The boundaries of the firm ●Lemons
Vertical integration ●Buy or Make and
Diversification in-between options
●Strategies
Chapter 11: ●Key components of
Organizational design and competitive advantage organizational design
Strategy and structure ●BCG matrix and its
Organizational culture: values, norms and artifacts strategies

Components of CSR (chap 1)

- What’s the CSR?

CSR, which stands for Corporate Social Responsibility, helps firms recognize
and address the economic, legal, ethical, and philanthropic expectations that
society has of the business enterprise at a given point in time.

- It has 4 components:

+ Economic responsibilities: The business enterprise is first and foremost an

economic institution. Investors expect an adequate return for their risk capital.
Creditors expect the firm to repay its debts. Consumers expect safe products and
services at appropriate prices and quality. Suppliers expect to be paid in full and
on time. Governments expect the firm to pay taxes and to manage natural
resources such as air and water under a decent stewardship. For example, when
Vinamilk pays taxes, this money will be used by the State for support funds.
This is a mandatory activity that businesses must perform.

+ Legal responsibilities: Laws and regulations are a society's codified ethics,

embodying notions of right and wrong. They also establish the rules of the
game. For example, strategic leaders must ensure that their firms obey all the
laws and regulations, including but not limited to labor, consumer protection,
and environmental laws.

+ Ethical responsibilities: A firm's ethical responsibilities go beyond its legal

responsibilities. They embody the full scope of expectations, norms, and values
of its stakeholders. Strategic leaders are called upon to do what society deems
just and fair. In the spring of 2018, after being heavily criticized, the Starbucks
director had to issue a formal apology because a Starbucks employee prevented
an African American from using the restroom because he hadn't ordered a drink.
This is not an action the company is legally obligated to take, but one it feels
ethically obligated to take to avoid a repeat of such incidents.

+ Philanthropic responsibilities: are often subsumed under the idea of corporate

citizenship, reflecting the notion of voluntarily giving back to society. For
example, over the years, Microsoft's corporate philanthropy program has
donated more than $3 billion in cash and software to people who can't afford
computer technology.

=> Carefully balance social responsibilities. Doing so ensures not only effective
strategy implementation but also long-term viability.

Comparisons between Top-down and Bottom-up strategy planning, suitable

situations for each (chap 2)

Top-down Bottom-up
● Senior management makes ● Involves employees at various
strategic decisions and levels in the strategy
communicates them to development process.
lower-level employees. ● Encourages collaboration,
● Suitable for centralized creativity, and employee
decision-making and empowerment.
 well-defined organizational ● Suitable for decentralized
structures. decision-making and fostering
● Used for long-term planning innovation.
and resource allocation. ● Used for tactical and
● Require a broad perspective operational planning,
and coordination across problem-solving, and
different departments or grassroots-level opportunities.
business units.

Suitable situations for each approach:

- Top-down planning is more appropriate in stable and hierarchical
organizations, where the strategic decisions need to be communicated clearly
and effectively to ensure alignment and consistency.
- Bottom-up planning is more suitable in dynamic and innovative organizations
that value employee participation, engagement, and a collaborative culture,
where creativity and agility are important.

These approaches are not mutually exclusive, and a combination of top-down

and bottom-up planning can be used in different parts of an organization or for
different aspects of strategy development.

5 competitive forces in Porter’s model

The Five Forces Model (identifies five forces that determine the profit potential
of an industry and shape a firm’s competitive strategy) helps strategic leaders
understand:
• profit potential of different industries
• how to position their firms to gain and sustain competitive advantage
(potential) competitions: attempting to extractvalue from the industry; the
struggle among forces to capture as much of the economic value created in an
industry as possible

1. Threat of entry.
The risk that potential competitors will enter an industry:
■ Lowers industry profit potential
■ Increases spending among incumbent firms
The threat of entry is high when:
• The minimum efficient scale to compete in an industry is low.
• Network effects are not present.
• Customer switching costs are low.
• Capital requirements are low.
• Incumbents do not possess:
• Brand loyalty
• Preferential access to raw materials.
• Preferential access to distribution channels.
• ...
• Restrictive government regulations do not exist
• New entrants expect that incumbents will not or cannotretaliate

2. Power of suppliers.
Pressures that industry suppliers can exert on an industry’s profit potential
Lowers industry profit potential if:
• Suppliers demand higher prices for their inputs
• Suppliers capture part of the economic value created
The relative bargaining power of suppliers is high when
■ The supplier’s industry is more concentrated than the industry it sells to.
■ Suppliers do not depend heavily on the industry for a large portion of their
revenues.
■ Incumbent firms face significant switching costs when changing suppliers.
■ Suppliers offer products that are differentiated.
■ There are no readily available substitutes for the products or services that the
suppliers offer.
■ Suppliers can credibly threaten to forward-integrate into the industry

3. Power of buyers.
Pressure an industry’s customers can put on the producers’ margins
Lowers industry profit potential if:
• Buyers obtain price discounts, which reduces revenue
• Buyers demand higher quality /service, which raises production costs
The power of buyers is high when
■ There are a few buyers and each buyer purchases large quantities relative to
the size of a single seller.
■ The industry’s products are standardized or undifferentiated commodities.
■ Buyers face low or no switching costs.
■ Buyers can credibly threaten to backwardly integrate into the industry.
Powerful buyers have the ability to extract a ôm significant amount of the value
created in the industry, leaving little or nothing for producers. In addition,
strategic leaders need to be aware of situations when buyers are especially price
sensitive. This is the case when
■ The buyer’s purchase represents a significant fraction of its cost structure or
procurement budget.
■ Buyers earn low profits or are strapped for cash.
■ The quality (cost) of the buyers’ products and services is not affected much by
the quality (cost) of their inputs.

4. Threat of substitutes.
Meet the same basic customer need:\
• In a different way
• Available from outside the given industry
A high threat of substitutes reduces industry profit potential.
The threat of substitutes is high when
■ The substitute offers an attractive price-performance trade-off.
■ The buyers cost of switching to the substitute is low.
Example
software vs. professional services
videoconferencing vs. business travel

5. Rivalry among existing competitors.

The intensity with which companies in the same industry jockey for market
share and profitability
• Can range from genteel to cut- throat
• The other forces in the mode pressure this rivalry
• The stronger the forces, the stronger the competitive intensity
The rivalry among existing competitors is high when
✓ There are many competitors in the industry.
✓ The competitors are roughly of equal size.
✓ Industry growth is slow, zero, or even negative.
✓ Exit barriers are high.
✓ Incumbent firms are highly committed to the business.
✓ Incumbent firms cannot read or understand each other’s strategies well.
✓ Products and services are direct substitutes.
✓ Fixed costs are high and marginal costs are low.
✓ Excess capacity exists in the industry.
✓ The product or service is perishable.

Criteria of VRIO framework

To be the basis of a competitive advantage, a resource must be:
Valuable
Rare
Costly to Imitate
Organized to capture the value of the resource
A firm can gain and sustain a competitive advantage only when it has resources
that satisfy all of the VRIO criteria.
Valuable: It helps to exploit an opportunity or offset a threat
Rare: Only 1 or few firms possess it
Costly to Imitate: Competitors can’t develop the resource for a reasonable price.
Imitation and substitution are risks
Organized to capture the value: Effective internal organizational structure and
coordinating systems. Organized around this resource gor competition

Advantage
● It can help prioritize the allocation of business resources to highlight your
unique value.
● It can highlight internal resources and advantages that would otherwise be
hard to recognize.
● Helps highlight the most important factors to creating and maintaining a
competitive advantage over similar organizations.
● Enables you to identify and prioritize your competitive edge.
● Provides a great opportunity to conduct an internal virtual workshop.

Limited

● Due to the cyclical nature of the competitive ecosystem, your unique value
and edge cannot be predicted in the long term.
● Only really accessible by established organizations. Many smaller
companies may struggle to define many of the key terms in the VRIO
framework.
● Strictly looks inward at your resources and capabilities and does not analyze
exterior opportunities.