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Week 12 – Final Exam Review
Date and time: April 11th : 2pm – 5pm Make sure you arrive by 1:40am
Make sure you sit with your section Location:
Sections Q and W and X
Rexall Centre
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Exam format: Closed book: no notes, no dictionaries, no
phones or electronic devices of any kind 3 hours 3 case questions (50 marks) 2-5 short answer questions (25-30 marks) 20-25 multiple choice questions (20-25
marks) Covers all the post-midterm material
Textbook chapters 6, 7, part of 8, 9 and 10 60% of final grade
Week 12 – Final Exam Review
The Industry Lifecycle (Chapter 3)
The Competitive Context
Industry Lifecycle Stages Emergence Growth Maturity Decline
Characteristics and key success factors and strategies for each stage
You should be able to identify the stage of an industry lifecycle based on an article or case or give examples of industries and their lifecycle stage
Textbook chapter 3 (pp. 43-56) (Case: Beer brewing)
Introduction Growth Maturity Decline
Ind
ust
ry S
ale
s
Time
Industry Lifecycle
Main drivers of industry evolution: Demand growth Creation and diffusion of technology and knowledge
Stage
CharacteristicIntroduction Growth Maturity Decline
Market Growth Slow Very rapid Moderate Negative
CustomersAffluent, early technology
adoptersNiche markets, increasing
penetration
Price conscious mass market, repeat
buyers
Late adopters, knowledgeable users, residual
segments.
RivalryLow; technological
competitionIncreasing; entry and exit;
shakeout Intense; increased
concentration; exit
Price wars; exit; mergers and acquisitions; asset liquidation
Critical Functional Areas Research & Development Sales and MarketingProduction and
ManufacturingGeneral Management and
Finance
ProductsVery wide variety of
designsStandardization Commoditization Continued commoditization
Technological Development
Rapid product innovationProduct and process
innovationIncremental innovation Very little innovation
Organizational Structure Organic Organic Mechanistic Mechanistic
Generic Strategies Product differentiation Product differentiation Cost Leadership Cost Leadership / Focus
Key ObjectivesIncrease awareness;
achieve legitimacy; specify dominant design
Create demand; capture market share
Cost efficiency; extend lifecycle
Market or niche leadership; cost reduction;
consolidation; exit
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Globalization (Chapter 6) What is it?
Integration of markets and economies Free flow of goods/services, capital and labour
Multinational Corporations Benefits / threats
International trade Mercantilism / protectionism Tariffs, quotas, subsidies (see handout on tariffs)
What are the problems with protectionism? Trade Agreements and International bodies
GATT, WTO, IMF, World Bank… Regional Trading Blocs (EU, APEC, ASEAN)
NAFTA Objectives Impact on trade, employment and business; on Canadian
culture; on competitiveness…
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Benefits – Threats of MNCs
BENEFITS THREATSEconomic development e.g. creates employment
No allegiance to host country
Brings management expertise
Mobile profits
Introduces new technology& relevant training
Power held in home country e.g. R & D investments
International trade Difficult to control
Unites cultures & nations
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Trade Protectionism and Tariffs
What are the problems with trade protectionism? [Opposite of Globalization] Trade retaliation Increased costs to consumers Limits competitiveness of domestic firms
How tariffs affect the economy handout: Impact on exporting country:
Lower production, job losses, economic decline… Impact on importing country:
Less competition for domestic firms, rising sales, prices, employment, spending, government revenues…
Increased costs to consumers, less spending on other industries, economic decline, costs of imposing + collecting tariffs, possible costs of retaliation and trade wars…
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Impact of NAFTA
Business
Consumers
Employment
Trade
Culture
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Chap. 6 Textbook Case Discussion
Amazon in Canada p. 138 Why is this about
Globalization/Protectionism? Foreign ownership restrictions are
protectionist measures and counter to globalization i.e. they prevent the free flow of $$...
Potential risks/benefits? + More competition = better prices, selection,
innovation… - Foreign competition and greater control by
large foreign firms = fewer jobs in Canada? Canadian culture will be lost…
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The Ethics of Globalization (Chapter 8: 188-195)
How to ensure that developing countries benefit from free trade & globalization?
Allow time for their domestic industries to adapt to multinational competition – don’t remove trade barriers too quickly!
Remove tariffs and subsidies protecting industries in developed countries too – free trade must be fair
Ensure governments in developing countries provide a social safety net to its needy citizens
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The Role of Government (Chapter 7)
Taxation: Revenue – Restrictive Taxes Crown Corporations
Why do we have them? What are the benefits and disadvantages of
crown corps? Which sectors of the economy should be
controlled by the Government and which should be left to the private sector?
Health Care Education Military/Defense/Law & Order/Corrections Retail distribution of beverage alcohol (i.e.
LCBO)
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The Role of Government (Chapter 7)
Regulation Modify Behavior – Imperfect Competition –
Public Interest Bailouts and Subsidies
See Exhibit 7.6 p. 156 Which activities should the government
subsidize and why? Should the government bail out large
corporations that are failing? Why? Government Subsidies in a Global
Context
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Government Subsidies in a Global Context
GOVERNMENT
Subsidizing global business
activity
Nurturingyoung industries
EncouragingFDI
Keepinga tradebalance
Protectingagainst unfair
trade
Maintaining domesticlabour force
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Current Trends and Issues
Should the Canadian government protect Canadian corporations from foreign ownership? (See Toronto Star Article handout) Arguments For:
Core assets and industries should be protected National security, cultural industries, servicing
unprofitable and remote communities Head offices in Canada will ensure that jobs, R&D,
spending on suppliers and related services (law, consltg & acctg firms, IBs…) also remains
Arguments Against : Corporations are driven by profit not nationalistic motives Protected firms are less efficient, productive, innovative,
competitive… and costs to consumers are likely increased Violates spirit and letter of free trade laws and
agreements and may invite retaliation
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Current Trends and Issues
Deregulation Why?
More competition, lower prices, better service… Deregulation in transportation and
electricity industries (see textbook p.162) Privatisation
Why? Benefits and Challenges (see next slide) Should the government privatize some
crown corporations or sell government assets? Why or why not?
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The Benefits & Challenges of Privatization
ADVANTAGES CHALLENGES
More competition Shareholder stakeholders
More efficiency Employee stakeholders
Evolution of business sector
Community stakeholders
Money from sell-off Need to regulate carefully
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Chap. 7 Textbook Case Questions
Pratt and Whitney (p.171) Should the Government continue to
subsidize Pratt and Whitney? Why or why not?
No: see Corporate Welfare arguments p. 156 Yes: see Guardian of Business in a Global
Context ex. 7.4 on p. 156
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Strategic Management (Chapter 9)
The Five Forces Model The VRIO Model SWOT Analysis Business-Level Strategies (3 Generic)
Cost Leadership Differentiation Focus
Corporate-Level Strategies (Diversification) Types: Related – Unrelated – Vertical Integration How: Internal – Mergers & Acquisition – Alliances
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Strategic Management (Chapter 9)
You should be able to analyze an industry according to the 5-forces model
Can you identify resources that are valuable, rare and difficult to imitate in a given firm?
Can you distinguishes the three generic strategies and apply them to a case with examples?
Can you recognize the different types of corporate diversification and methods? And provide examples?
04/21/23
The Five-Forces Model
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The VRIO Model
Valuable? + Rare? + + Difficult to
Imitate?+ Organized to Exploit?
= Competitive Advantage
Yes Yes Yes Yes Sustainable
Yes Yes No Yes Temporal
Yes No Yes Yes Temporal
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Chap. 9 Textbook Case Discussion
Starbucks – Tim Hortons p. 220
5 Forces analysis of coffee shop industry
VRIO of SBUX, THI
Type of business/corporate strategy pursued by the SBUX (geographic expansion) and THI (selling lattes…)
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Organizational Change and Learning (Chapter 10)
Forces for change Types of organizational change
Developmental, transitional, transformational Structural inertia, bureaucracies, cognitive
scripts Methods and strategies for managing
change: IBM: Who says elephants can’t dance? 3M and Google’s encouraging exploration and
innovation Creating separate autonomous spin-offs
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FORCES FOR CHANGE
Societal
Economic
Competitive
Technological
Global
Political
OrganizationalStructureStrategyPeople
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Organizational Change and Learning (Chapter 10)
Organizational learning Single vs. double loop learning Exploration vs. exploitation tradeoff
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Chap. 10 Textbook Case Questions
Netflix and Blockbuster p.246
Forces driving change in movie rental industry
Technological, competitive, societal…
Why has Blockbuster not adapted to the new environment?
Inertia, bureaucracy, cognitive scripts…
Is Netflix a learning organization? Yes, shift from mail order to online streaming
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Sample non-case questions
Explain the limitations of Porter’s five-forces model. Which other model helps to provide a more complete picture of a firm’s sources of competitive advantage?
Bombardier (the Canadian Aerospace firm) is seeking $500 million in government support to help finance the research and development for a new line of regional jets. Provide arguments in support of government subsidies in this case and arguments against.
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Exam Tips Read the questions very carefully Make sure you understand what theoretical
concepts you need to draw on to answer Explain the concept accurately if necessary Use case facts or examples to illustrate the
concepts – be specific. ANSWER THE QUESTION!!! The more in-depth and insightful your
analysis, the better your grade No point-form answers
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THE END
I hope you learned something and had fun – I did!
Best of luck for the final.
Peter [email protected]
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