Overview of MGMT 485W—Study Guide for Final Exam

Module 1/Ch. 1: Fundamentals and Overview

Overview
This module sets the stage for the subject matter, presents a broad overview of the subject, explicitly reviews financial terms that will be used throughout the course, and begins to cover in detail some of the responsibilities of the CEO (the primary strategic manager in a profit-seeking business).

Objectives
At the end of this module the student will be able to:
Distinguish between strategic management and functional management.
Correctly use financial ratios/measures necessary for this course (NPM, OPM, ROIC, total returns to stockholders).
Explain a SWOT diagram, expanded to include the role of mission and corporate social responsibility.

Relevance
This module explains the relevance of the subject to a career in business, presents a mental schema of the subject showing how various topics fit together, alleviates some of the anxiety students may have about the use of financial ratios/measures and, after these preliminaries, presents two important course concepts in more detail.

Summary
This purpose of this module is to introduce the topic (reveal that it’s interesting even though a required CBK course), relieve anxiety about finance and writing (well, to the extent possible) while establishing that both are absolutely essential to the course, and get down to work. The financial analysis and written requirement at the end of the module should seem challenging but doable.

Module 2/Ch. 2: External Analysis

Overview
This module continues our discussion of the expanded SWOT model introduced in Module 1. Here we discuss environmental opportunities and threats (O+T) in considerable detail. After briefly covering types of trends in the general/remote environment, we thoroughly cover Porter’s Five Forces Model to analyze the competitive/industry environment.

Objectives
At the end of this module the student will be able to:
Distinguish between forces in the general environment and the industry environment.
Distinguish between the five forces of competition in an industry: rivalry, threat of entry, bargaining power of buyers, bargaining power of suppliers, and pressure from substitutes
Describe how price competition affects each of the five forces of competition.
Describe how differentiation affects each of the five forces of competition.
Determine the intensity of overall competition, and thus profit potential, of an industry.

Relevance
Conditions in a firm’s environment affect its financial performance. Companies have to respond to opportunities/threats in the general environment to stay in business, but companies can proactively manage opportunities/threats in the industry. The intensity of competition in an industry, the combined effects of the five forces of competition, determines average industry profits.

Summary
This module provides tools to identify general and industry environmental opportunities and threats. Porter’s model is a powerful tool to recognize attractive and unattractive industries.

Module 3/Ch. 3: Internal Analysis

Overview
This module continues our discussion of the expanded SWOT model introduced in Module 1. Here we discuss a company’s internal strengths and weaknesses (S+W) in considerable detail. The underlying model is the Resource-Based View of the Firm, according to which a firm’s unique bundle of resources and capabilities can contain enough core and/or distinctive competencies to produce a competitive advantage (and the above-average profitability that accompanies a competitive advantage) for the firm.

Objectives
At the end of this module the student will be able to:
Find the roots of a company’s competitive advantage (or lack of competitive advantage).
Distinguish between primary activities and support activities in a firm’s value chain.
Classify a firm’s tangible resources, intangible resources, and capabilities.
Identify a firm’s core competencies.