MENT 4900 (Ghaddar) UConn Fall 2026

──────── CHAPTERS 1-2 ──────── Strategy & Strategic Management Process

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What is strategy?

Goal-directed actions used to exploit core competencies and gain and sustain competitive advantage.

What is competitive advantage?

Superior performance relative to competitors in the same industry.

What is sustainable competitive advantage?

When a firm outperforms competitors or the industry average over a prolonged period.

What is competitive disadvantage?

When a firm underperforms its rivals and the industry average.

What is competitive parity?

When two or more firms perform at roughly the same level.

What is the ultimate goal of strategy emphasized in the slides?

Shareholder value maximization through both profitability and profit growth.

Why is operational effectiveness not the same as strategy?

Benchmarking, best practices, and efficiency are necessary but not sufficient; strategy also requires a distinctive position, trade-offs, and a coherent set of activities.

What are the main characteristics of strategy?

Create superior value while containing cost, be different from rivals, choose a unique market position, make trade-offs, commit long term, and continually analyze, formulate, implement, and learn.

What does AFI stand for?

Analysis, Formulation, Implementation. Analyze internal/external environments, formulate strategy, then implement it.

What are the three levels of strategy?

Corporate = whole organization/across businesses; Business = how an SBU competes; Functional = actions in areas such as finance, HR, marketing, and operations.

What are the components of the formal strategic planning process?

Mission → external analysis (opportunities/threats) → internal analysis (strengths/weaknesses) → select/formulate strategy → implementation → feedback.

What are Mintzberg-style criticisms of formal strategic planning?

It can be inflexible, top-down, myopic, slow to adapt, ignore lower-level initiatives, assume leaders can predict the future, and separate formulation from implementation.

What is an intended strategy?

A rational, planned, top-down strategy developed in advance.

What is an emergent strategy?

An unplanned strategic initiative that arises in response to unforeseen circumstances, often bubbling up from lower levels.

What are unrealized and realized strategy?

Unrealized = intended strategy that never happens. Realized = what the firm actually does, usually a combination of intended and emergent strategy.

What is a Black Swan event?

A highly improbable event with very large impact; slide examples include Brexit, COVID-19, and the 2008 financial crisis.

What is scenario planning?

Planning for multiple plausible future conditions rather than relying on one forecast; it adds flexibility and a feedback loop.

Strategic fit vs. strategic intent?

Strategic fit matches existing resources to current opportunities; strategic intent deliberately stretches beyond current resources and capabilities.

Product-oriented vs. customer-oriented mission/vision?

Product-oriented defines the firm by products/services and can become myopic; customer-oriented defines the firm by customer needs and markets served.

What are examples of customer-oriented vision statements from the slides?

Amazon: customer-centric shopping; Google: organize/access information; IKEA: better everyday life; Nike: inspire/innovate for athletes; Tesla: accelerate sustainable energy.

What cognitive biases are listed in the slides?

Illusion of control, escalating commitment, confirmation bias, reason by analogy, representativeness, and groupthink.

Devil's advocacy vs. dialectic inquiry?

Devil's advocacy challenges the preferred path and highlights what can go wrong; dialectic inquiry compares competing alternatives and explores compromises.

──────── CHAPTER 3 ──────── External Analysis: Industry Structure, Competitive Forces & Strategic Groups

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General environment vs. task environment?

General = broad macro forces managers have little control over; Task = closer industry/strategic-group forces managers can influence more directly.

What is PESTEL used for?

To scan, monitor, and evaluate external factors to identify opportunities and threats.

What are Political factors in PESTEL?

Government processes/actions; firms may respond through lobbying, public relations, contributions, and litigation.

What are Economic factors in PESTEL?

Growth rates, employment, interest rates, price stability/inflation, and currency exchange rates.

What are Sociocultural factors in PESTEL?

Culture, norms, values, and demographic trends such as age, family size, and socioeconomic characteristics.

What are Technological factors in PESTEL?

Applications of knowledge that create new products or processes, such as process innovations, smartphones, and wearable devices.

What are Ecological factors in PESTEL?

Natural-environment issues such as sustainability, climate change, and resource use; they can create both threats and opportunities.

What are Legal factors in PESTEL?

Laws, mandates, regulations, and court decisions that shape what firms can and cannot do.

Industry effects vs. firm effects?

Industry effects are conditions shared by firms in an industry; firm effects come from managers' actions and firm-specific choices. The slides emphasize firm effects as more important.

What is an industry?

A group of incumbent firms offering relatively similar goods/services, with similar buyers and suppliers, whose products are close substitutes.

What is strategic position in Chapter 3?

A firm's ability to create customer value (V) while containing cost (C); competitive advantage comes from creating a large value-cost gap relative to rivals.

What is the core rule of Porter's Five Forces?

Stronger forces generally mean greater threat and lower industry profit potential; weaker forces generally mean greater opportunity and higher profit potential.

When is the threat of new entrants high?

When entry barriers are low—e.g., weak scale economies, low switching costs, low capital needs, little government restriction, and weak retaliation.

When is supplier bargaining power high?

When suppliers are few/concentrated, inputs are critical or differentiated, substitutes are limited, switching costs are high, or suppliers can forward integrate.

When is buyer bargaining power high?

When buyers are few/concentrated, buy large quantities, products are standardized, substitutes exist, switching costs are low, or buyers can backward integrate.

What raises the threat of substitutes?

Substitutes are readily available, offer an attractive price-performance trade-off, and customers face low switching costs.

What increases rivalry among existing competitors?

Many/similar competitors, slow industry growth, high exit barriers, low differentiation, low switching costs, and high strategic stakes.

Complements and co-opetition?

Complements add value to another industry's product when used together. Co-opetition is cooperation between competitors to achieve a strategic objective.

What are the basic steps for a Five Forces analysis?

Define the industry → identify participants → assess each force → judge overall attractiveness/profitability → analyze changes over time → draw strategic implications.

What is a strategic group and what is unique about rivalry?

A set of firms in an industry using similar strategies. Rivalry is strongest within the same group, and mobility barriers make movement between groups difficult.

Perfect competition → monopoly: what changes?

Moving from perfect competition to monopolistic competition to oligopoly to monopoly generally means fewer firms, higher entry barriers, more pricing power, and higher profit potential.

──────── CHAPTER 4 ──────── Internal Analysis: Resources, Capabilities & Core Competencies

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What is a core competency?

A unique strength embedded deep within the firm that helps it differentiate from rivals by creating higher customer value and/or lower cost.

What core-competency examples are on the slides?

IKEA: modern functional furniture at low cost; Beats: design/marketing/coolness; Tesla: battery-powered motor engineering; Netflix/Spotify: personalized recommendation algorithms.

What is a resource?

An asset the firm can draw on when formulating and implementing strategy—what the firm has to work with.

Tangible vs. intangible resources?

Tangible resources are physical/financial and easier to observe; intangible resources are nonphysical, such as brand, knowledge, reputation, and know-how.

What is a capability?

A skill for orchestrating and strategically deploying resources—what the firm does.

Resources vs. capabilities?

Resources = what a firm has; capabilities = what a firm can do with those resources.

How do resources, capabilities, and core competencies relate?

Resources and capabilities are combined and deployed; when the resulting strength is distinctive and strategically valuable, it can become a core competency.

What does VRIO stand for?

Valuable, Rare, Inimitable, Organized to capture value.

What makes a resource Valuable?

It helps exploit an opportunity or offset/neutralize a threat.

What makes a resource Rare?

Only one or a few competing firms possess it.

What makes a resource Inimitable?

Competitors cannot develop or copy it at a reasonable cost.

What does Organized mean in VRIO?

The firm has the structure, systems, and coordination needed to capture the resource's value.

VRIO outcome if the resource is NOT valuable?

Competitive disadvantage.

VRIO outcome if it is valuable but NOT rare?

Competitive parity.

VRIO outcome if it is valuable and rare but easy to imitate?

Temporary competitive advantage.

VRIO outcome if it is valuable, rare, inimitable, but the firm is not organized?

Temporary competitive advantage because the firm cannot fully capture the resource's value.

VRIO outcome if all four conditions are met?

Sustainable competitive advantage.

What are isolating mechanisms?

Barriers that prevent rivals from competing away an advantage, including better expectations, path dependence, causal ambiguity, social complexity, and IP protection.

What is path dependence?

Past decisions and accumulated history constrain current options, making a resource/capability hard for rivals to recreate.

Causal ambiguity vs. social complexity?

Causal ambiguity = rivals cannot clearly identify what causes the advantage; social complexity = advantage depends on intricate relationships, culture, or systems that are hard to copy.

What are dynamic capabilities?

The ability to create, deploy, modify, reconfigure, and upgrade resources/capabilities as the external environment changes.

What is core rigidity?

A former core competency that becomes a liability because environmental change makes it no longer fit the market.

What is a firm value chain?

The internal chain of activities that transforms inputs into outputs; each activity adds incremental value and incremental cost.

Primary vs. support value-chain activities + SWOT use?

Primary activities add value directly: supply chain, operations, distribution, marketing/sales, after-sales service. Support activities add value indirectly: R&D, IS, HR, accounting/finance, infrastructure. SWOT turns internal/external factors into strategic alternatives.

──────── CHAPTER 5 + RATIOS ──────── Competitive Advantage, Firm Performance & Financial Ratios

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What are the three standard performance dimensions?

Accounting profitability, shareholder value creation, and economic value creation.

Why do performance measures need benchmarks?

A number alone does not prove competitive advantage; compare it with competitors, industry averages, and/or performance over time.

Advantages of accounting profitability measures?

They assess firm performance, allow comparison with competitors/industry averages, and show relative profitability over time.

Limitations of accounting profitability?

Backward-looking, may omit off-balance-sheet items, and focuses heavily on tangible assets even though intangibles are increasingly important.

Who are shareholders and what is risk capital?

Shareholders are legal owners; risk capital is money provided in exchange for an equity stake.

What is total return to shareholders (TRS)?

Stock-price appreciation plus dividends received over a specific period.

What is market capitalization?

Number of shares outstanding × share price.

Limitations of shareholder-value measures?

Stock prices are volatile and affected by macroeconomic factors, Black Swan events, and sometimes irrational investor psychology.

What do liquidity ratios measure?

A company's ability to meet short-term obligations using current assets.

Current ratio formula and interpretation?

Current Assets ÷ Current Liabilities. A ratio above 1 means current assets exceed current liabilities.

Quick ratio vs. cash ratio?

Quick = (Cash + Marketable Securities + Net Receivables) ÷ Current Liabilities. Cash ratio = (Cash + Marketable Securities) ÷ Current Liabilities; cash ratio is more stringent.

What do leverage/solvency ratios measure?

A company's ability to meet long-term debt and interest obligations.

Debt-to-equity formula and interpretation?

Total Liabilities ÷ Stockholders' Equity. Higher generally means greater debt use and financial risk.

Times interest earned formula and interpretation?

(Net Income + Interest Expense + Tax Expense) ÷ Interest Expense. Higher means greater ability to cover interest.

Financial leverage ratio / equity multiplier?

Total Assets ÷ Shareholders' Equity; measures dollars of assets supported per dollar of equity.

Inventory turnover and DIO?

Inventory turnover = COGS ÷ Inventory. Higher turnover is generally better; DIO is average days inventory remains before sale, so lower is generally better.

Receivables turnover and DSO?

Receivables turnover = Revenue ÷ Accounts Receivable. Higher is generally better; DSO is average days to collect receivables, so lower is generally better.

Total asset turnover?

Revenue ÷ Total Assets; higher means more sales generated per dollar of assets.

What do ROIC, ROA, and ROE measure?

ROIC = profitability on invested debt + equity capital; ROA = profit relative to assets; ROE = net income generated relative to shareholders' equity.

Market-to-book and P/E?

Market-to-book compares market value with book equity; P/E = Stock Price ÷ EPS and a higher P/E generally reflects stronger expected earnings growth.

──────── CHAPTER 6 ────────

Business-Level Strategy: Cost, Differentiation & Blue Oceans

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What is business-level strategy?

Goal-directed actions managers take to gain competitive advantage in a single product market; it answers, 'How should we compete?'

What determines a firm's strategic position?

Its business-level strategy and the relationship between customer value created and the cost of delivering that value.

What is market segmentation/competitive scope?

Choosing which customer groups to serve; scope can be broad or narrow.

What are the four generic business strategies?

Broad + cost = Cost Leadership; Broad + differentiation = Differentiation; Narrow + cost = Focused Cost Leadership; Narrow + differentiation = Focused Differentiation.

What is a differentiation strategy?

Create higher perceived customer value through unique features and charge a premium price.

Main value drivers of differentiation?

Nonstandardized/unique products, customer service, complements, marketing/promotion, quality, innovation, and customer perceptions.

Strategic choices that support differentiation?

Innovate products/processes, shape perceptions through advertising, and emphasize quality.

What is focused differentiation?

Differentiation aimed at a narrow niche or a small number of segments; slide examples include Rolls-Royce, Bentley, Cartier, Patek Philippe, and Mont Blanc.