According to Rumelt (cited by Charles Baden-Fuller and John Stopford, in ‘The firm matters, not the industry’, in De Wit & Meyer, 2010, Reading 8.2), how much of a business unit’s profitability can be explained by the choice of strategy?
Almost 50%
About 90%
About 10%
About 1%.
According to Rumelt (cited by Baden-Fuller and Stopford, in ‘The firm matters, not the industry’, in De Wit & Meyer, 2010, Reading 8.2), how much of a business unit’s profitability can be explained by the choice of industry?
Almost 50%
About 90%
About 10%
About 1%.
In discussing the Growth Share Matrix, Hedley (1977) suggests that having the largest market share allows a firm to capture the highest and most stable profits. How would Baden-Fuller and Stopford in (‘The firm matters, not the industry’, in De Wit & Meyer, 2010, Reading 8.2) respond to this?
Hedley is wrong, if a firm is efficient and effective, it will inevitably get a high market share
Hedley is wrong, a firm that has low costs, and charges high prices, will get a high market share
Hedley is right, there is a causal link between market share and profitability
Hedley is right, a cash cow can brake the rules of the game.
Porter (‘Competitive strategy’, in De Wit & Meyer, 2010, Reading 5.1) suggests that firms should follow one of three generic strategies, in order to avoid being stuck-in-the-middle. How would Baden-Fuller and Stopford (in ‘The firm matters, not the industry’, in De Wit & Meyer, 2010, Reading 8.2) respond to this?
Porter is right, the link between market share and profitability is fairly conclusive
Porter is wrong, firms are able to resolve the contradictions inherent in that position
Porter is right, the evidence of firms, such as Cook, clearly show this
Porter is wrong, whilst being stuck-in-the-middle is not ideal, profits can be made from that position.
In ‘The firm matters, not the industry’ (in De Wit & Meyer, 2010, Reading 8.2), what is Baden-Fuller and Stopford’s major argument for their view that “There is no such thing as a mature industry, only mature firms”?
The firm’s strategy matters, not the industry structure. Industries inhabited by mature firms often hold great opportunities for the innovative firms
The industry profitability matters, not the industry structure. Some industries are intrinsically more profitable than others
The firm’s profitability matters, not the industry structure. Industries inhabited by mature firms do not give much opportunity for high profits
The firm’s market share matters, not the industry structure. Large market share yields greater profits, for mature firms independent of the industry structure.
What is the major difference in Porter’s (‘Industry evolution’, in De Wit & Meyer, 2010, Reading 8.1) and Baden-Fuller and Stopford’s (in ‘The firm matters, not the industry’, in De Wit & Meyer, 2010, Reading 8.2) points of view on the industry context?
Porter argues that the industry structure determines the ultimate profit potential in the industry, whereas Baden-Fuller and Stopford argue that the industry structure is not important for profitability variations
Porter argues that growth through mergers depends on the choice of good firms, whereas Baden-Fuller and Stopford argue that choosing good industries is a better approach
Porter argues that mature industries offer good prospects for success, whereas Baden-Fuller and Stopford argue that mature industries are troubled industries, with fewer opportunities for growth
Porter argues that large market share often reinforces old ways of thinking, whereas Baden-Fuller and Stopford argue that large market share brings a competitive advantage to the firm, and so yields greater profits.
According to Baden-Fuller and Stopford (in ‘The firm matters, not the industry’, in De Wit & Meyer, 2010, Reading 8.2), which industry structures offer the larger potential for innovations and success?
There is no correlation between the industry structure and a firm’s success