35) It is normal for a company’s strategy to end up being
A) a blend of offensive actions on the part of managers to improve the company’s profitability
and defensive moves to counteract changing market conditions.
B) a combination of conservative moves to protect the company’s market share and somewhat
more risky initiatives to set the company’s product offering apart from rivals.
C) a close imitation of the strategy employed by the recognized industry leader.
D) a blend of proactive actions to improve the company’s competitiveness and financial
performance, and adaptive reactions to unanticipated developments and fresh market conditions.
E) more a product of clever entrepreneurship than of efforts to clearly set a company’s
product/service offering apart from the offerings of rivals.
36) Crafting a deliberate strategy involves developing strategy elements that
A) imitate as much of the market leader’s strategy as possible so as not to end up at a competitive
disadvantage.
B) comprise a five-year strategic plan that is then fine-tuned during the remainder of the plan
period; big changes in strategy are thus made only once every five years.
C) consist of a blend of proactive new planned initiatives plus ongoing strategy elements
continued from prior periods.
D) deliberately eliminate the ongoing strategic elements and implement new planned initiatives.
E) consist of adaptive change plans to new market situations along with abandoned redundant
ongoing elements.
37) Strategy formulation is
A) mostly hidden to outside view and is deliberately kept under wraps by top-level managers (so
as to catch rival companies by surprise when the strategy is launched).
B) typically planned well in advance and usually deviates little from the planned set of actions
and business approaches because of the risks of making on-the-spot changes.
C) static over time unless a newly appointed CEO decides to take the company in a new
direction with a new strategy.
D) typically a blend of proactive and reactive strategy elements.
E) developed solely on the fly because managers must make constant efforts to come up with
fresh moves to keep a company’s product offering clearly set apart from the product offerings of
rival firms.
38) A company’s realized strategy evolves from one version to the next due to
A) changing management direction because of understanding several appealing strategy
alternatives.
B) the proactive efforts of company managers to improve the current strategy, a need to respond
to changing customer requirements and expectations, and a need to react to fresh strategic
maneuvers on the part of rival firms.
C) ongoing turnover in the managerial and executive ranks (new managers often decide to shift
to a different strategy).
D) pressures from shareholders to boost profit margins and pay higher dividends.
E) the importance of keeping the company’s business model fresh and up-to-date.
39) It is incorrect to say that a company’s strategy evolves due to
A) a need to promote stability and retain the status quo.
B) the need to abandon some strategy elements that are no longer working well.
C) a need to respond to changing customer requirements and expectations.
D) a need to react to fresh strategic maneuvers on the part of rival firms.
E) the proactive efforts of company managers to improve obsolete aspects of the strategy.
40) In the course of crafting a strategy, managers typically do not
A) abandon certain strategy elements that have grown stale or become obsolete.
B) modify the current strategy when market and competitive conditions take an unexpected turn
or some aspects of the company’s strategy hit a stone wall.
C) revamp the current strategy in response to the fresh strategic maneuvers of rival firms.
D) take proactive actions to improve this or that piece of the strategy.
E) share the strategy publicly to obtain additional customer and shareholder support.
41) Strategy is about competing differently than rivals; thus, strategy success is about
A) the sources of sustained advantages and superior profitability.
B) those emergent, unplanned, reactive, and adaptive plans that are more appropriate than
deliberate or intended ones that drive the realized strategy.
C) matching internal resources and capabilities to the industry environment.
D) keeping the firm current with the rapid pace of change in the industry.
E) replacing proactive and reactive measures by modified ongoing strategic elements to preserve
company values.
42) A deliberate strategy is best exemplified by a(n)
A) popular downtown theater that has been staging plays and showing films decides to begin
booking rock and roll acts.
B) airline company that cuts frills in order to cope with increasing fuel prices.
C) IT firm that trims jobs during a recession.
D) smartphone manufacturer that divests its tablet production branch after not gaining market
share.
E) online jewelry reseller that discontinues its line of turquoise rings due to lack of demand.
43) An emergent strategy is best exemplified by a(n)
A) local hardware store that offers a 10 percent discount for seniors on the first Wednesday of
every month.
B) online book reseller that diversifies into custom book publishing.
C) oil-change franchisor that continues geographical expansion despite a recession.
D) healthy food manufacturer that integrates forward into drive-thru fast health food restaurants.
E) microbrewer that invests in building community water wells during a drought.
44) Consider the following three companies and their strategies.
• Company A is an established database management company that acquires a well-reputed but
small publishing house to enter the booming publishing industry.
• Company B, a sports management house, declared bankruptcy during a recent recession but
now has created a television network that airs regional sports events.
• Company C, a package delivery business, is a startup based on delivery efficiency models
created by a few students, and delivers almost all kinds of packages.
The use of strategies by these three companies accurately can be analyzed by saying that
A) Company B employs an emergent strategy, whereas companies A and C employ deliberate
strategies.
B) All three companies employ deliberate strategies.
C) All three companies employ emergent strategies.
D) Company C employs a deliberate strategy; companies A and B employ emergent strategy.
E) companies A and C employ emergent strategies; company B employs a deliberate strategy.
45) A luxury bathtub manufacturer offered scented bubble bath foams and massage coupons as a
gimmick when its bathtubs did not sell. The bubble foam became famous among some women
and led to a line of exclusive bath products for women. The manufacturer established shops in
various regional locations and hired celebrities to market its products to enhance sales. Now its
products are sold through retail outlets and online sites throughout the world. Which of the
following is accurate?
A) Offering scented bubble bath foams and massage coupons was an emergent strategy.
B) Creating a subbrand that offered exclusive bath products for women was an emergent
strategy.
C) Establishing shops in regional locations was an emergent strategy.
D) Hiring celebrities to market its products was an emergent strategy.
E) Creating a worldwide presence through retail outlets and online sites was an emergent
strategy.
46) Due to impending labor strife over planned layoffs in its Silicon Valley headquarters, a social
networking company has decided to outsource its programming operations to an emerging
market, India, to obtain cheaper labor. Since then, this social networking company has
encountered criticism that has diminished its current market position and staff productivity. You
have been retained by this company to develop an appropriate reactive (emergent) strategy that
would begin by
A) hiring and training new talent to begin operations in the emerging market.
B) acquiring a local computer chip marketing and distribution specialist firm in the new location.
C) cancelling the idea of outsourcing and retaining the existing workforce to run operations.
D) shifting the existing workforce to the new geographical location and paying them according
to new standards.
E) cancelling the job cuts till the market situation and entry operations stabilize.
47) A company’s business model
A) concerns the actions and business approaches that will be used to grow the business, conduct
operations, and stake a competitor’s market position.
B) is management’s blueprint for how it will generate revenues sufficient to cover costs and yield
an attractive profit.
C) concerns what combination of moves in the marketplace it plans to make to outcompete
rivals.
D) deals with how it can simultaneously maximize profits and operate in a socially responsible
manner that keeps its prices as low as possible.
E) concerns how management plans to pursue strategic objectives, given the larger imperative of
meeting or beating its financial performance targets.
48) The consumer goods companies listed below all pursue the same business model with the
exception of
A) Acer laptops.
B) Gillette razors.
C) Epson printers.
D) Keurig espresso coffee machines.
E) Nintendo Wii.
49) Why is it important to craft a business model?
A) Because it sets forth management’s game plan for maximizing profits for shareholders
B) Because it details exactly how management’s strategy will result in the achievement of the
company’s strategic intent
C) Because it is a part of an operating model that focuses on delivering excellence and creating
value for external shareholders and internal labor force
D) Because it sets forth the key components of the enterprise’s business approach, indicates how
revenues will be generated, and makes a case for why the strategy can deliver value to customers
in a profitable manner
E) Because it sets forth management’s long-term action plan to match the business standards set
by formidable rivals
50) Management’s blueprint for how and why the company’s business approaches will generate
revenues sufficient to cover costs and produce attractive profits and returns on investment
A) best describes what is meant by a company’s strategy.
B) best describes what is meant by a company’s business model.
C) accounts for why a company’s financial objectives are at the stated level.
D) portrays the essence of a company’s business purpose or mission.
E) is what is meant by the term strategic intent.
51) The difference between a company’s strategy and a company’s business model is that
A) a company’s strategy is management’s game plan for achieving strategic objectives while its
business model is management’s game plan for achieving financial objectives.
B) the strategy concerns how to compete successfully and the business model concerns how to
operate efficiently.
C) a company’s strategy is management’s game plan for realizing the strategic vision, whereas a
company’s business model is the game plan for accomplishing its corporate responsibility goals.
D) strategy relates broadly to a company’s competitive moves and business approaches while its
business model relates to whether the revenues flowing from the strategy are sufficient to cover
costs and realize a profit.
E) a company’s strategy is solely concerned with how to please customers while its business
model is solely concerned with how to please shareholders.
52) The customer value proposition lays out the company’s approach to
A) meeting profitability guidelines without the risk of losing customers.
B) operating efficiently given the current level of customers.
C) embracing rival company approaches to gaining customers.
D) satisfying customer wants and needs at a price that customers will consider a good value.
E) assuring that the company makes enough profits based on its per-unit cost.
53) A regional electric scooter manufacturer sells its scooter at a lower price than other
manufacturers of two-wheeler scooters. What will make the product most attractive for
customers?
A) low profit
B) high value
C) high cost
D) low value
E) low cost
54) You have been asked to advise Waltham Furniture, a company that seeks to serve a target
middle-class customer demographic obsessed with the quality and price of products. Your
proposed value proposition for this company to offer to its customers would be to
A) identify the unique features of your client’s furniture without comparing it with a rival’s
products.
B) offer copycat furniture at low cost but an average quality compared to your client’s rivals.
C) offer the same quality of furniture as do your client’s rivals but at a high cost based on greater
market share and higher brand value.
D) provide comparable quality furniture at a much lower price than your rivals but leave the final
assembly of purchased furniture to customers accompanied by an easy-to-follow assembly guide.
E) market and sell only average quality furniture compared to your rivals at an imperceptible
difference in price.
55) Based upon its advertising slogan, the pizza restaurant that likely offers the best value
proposition to its customers is
A) Johnny’s Pie Shop: “The Tastiest Pizza You’ve Ever Had.”
B) Fast n’Fresh Pizza: “Get fresh, hot pizza, delivered under 20 minutes—or it’s free.”
C) Sustainable Slices: “Organic and sustainably sourced ingredients that are good for you and the
planet.”
D) Loyalty Pizza: “One pizza, 5 points: to be redeemed with a pan pizza upon reaching 50
points.”
E) Crackerjack Pizza: “Open your pizza box and find a free gift. Hurry! Free gifts for 100 lucky
customers.”
56) Troopline Inc., an online laptop retailer, sells laptops of similar range and features as other
online laptop retailers. Which of the value propositions would not benefit the company?
A) providing free delivery of purchased laptops
B) allowing customers to pay through gift coupons
C) updating the site with better high-resolution pictures of laptops
D) providing mobile friendly version of the site and compatible apps for mobile users
E) establishing a comparison feature tab that allows customers to compare offerings from other
online retailers
57) A search engine giant specializes in all types of search items; provides a free translation
feature for 80 different languages; stores all passwords for commonly visited sites in encrypted
form; allows users to view ads on previously made related searches; provides suggestive search
items to assist the user; allows users to view a collection of related web pages users might want
to visit; and provides a faster load time and more accurate hits than its rivals. This search engine
company uses a profit formula that primarily consists of
A) providing a free translation feature for 80 different languages.
B) allowing users to view ads on previously made related searches.
C) allowing users to view a collation of related web pages users might want to visit.
D) providing a faster load time and more accurate hits than its rivals.
E) providing suggestive search items based on history of sites visited.
58) A winning strategy is one that
A) builds strategic fit, is socially responsible, and maximizes shareholder wealth.
B) is highly profitable and boosts the company’s market share.
C) fits the company’s internal and external situation, builds sustainable competitive advantage,
and improves company performance.
D) results in a company becoming the dominant industry leader.
E) can pass the ethical standards test, the strategic intent test, and the profitability test.
59) A winning strategy must pass which three tests?
A) the dominant market test, the sustainable advantage test, and the profit test
B) the fit test, the competitive advantage test, and the performance test
C) the sustainable performance test, the fit test, and the profit test
D) the performance test, the dominant market test, and the fit test
E) the fit test, the sustainable advantage test, and the dominant market test
60) To distinguish a winning strategy from a mediocre or losing strategy, a strategic manager
should ask which question?
A) How good is the company’s business model?
B) Is the company a technology leader?
C) Does the company have low prices in comparison to rivals?
D) Is the company putting too little emphasis on behaving in an ethical and socially responsible
manner?
E) How well does the strategy fit the company’s situation?
61) To test the merits of a firm’s strategy and distinguish it as a winning strategy, which major
question needs to be addressed?
A) Is the company’s strategy ethical and socially responsible, and does it put enough emphasis on
good product quality and good customer service?
B) Is the company putting too little emphasis on growth and profitability and too much emphasis
on behaving in an ethical and socially responsible manner?
C) Is the strategy resulting in the development of additional competitive capabilities?
D) Is the strategy helping the company achieve a sustainable competitive advantage, and is it
resulting in better company performance?
E) Does the strategy strike a good balance between maximizing shareholder wealth and
maximizing customer satisfaction?
62) For John Sidanta, CEO and founder of Primaplast, a manufacturer of biodegradable plastic
drinking straws made from recycled material, crafting and executing a strategy is a top-priority
managerial task because it
A) helps Primaplast management create tight fits between a company’s strategic vision and
business model.
B) allows Primaplast company personnel, and especially senior executives, to know the answer
to “who are we, what do we do, and where are we headed?”
C) is Primaplast management’s prescription for doing business, its roadmap to competitive
advantage, a game plan for pleasing customers, and its formula for improving performance,
especially in light of impending community and some food service outlets’ bans on conventional
plastic drinking straws.
D) provides Primaplast with clear guidance as to what the company’s business model and
strategic intent are, and helps keep managerial decision-making from being rudderless.
E) establishes how well Primaplast executives perform these tasks and are the key determinants
of executive compensation.
63) Why are crafting and executing business strategies the foremost tasks of any organization?
A) because they are necessary ingredients of a sound operational business model
B) because a good strategy coupled with a good strategy execution are the most telling signs of
good. management and allow a company to be a standout performer in the marketplace
C) because the management skills of top executives are sharpened as they work their way
through the strategy-making, strategy-executing processes
D) because doing these tasks helps executives develop an appropriate strategic vision, strategic
intent, and set of strategic objectives
E) because of the contribution they make to maximizing value for shareholders
64) Good strategy combined with good strategy execution
A) offers a surefire guarantee for avoiding periods of weak financial performance.
B) is the best sign that a company is a true industry leader.
C) is a more important management function than forming a strategic vision combined with
setting objectives.
D) is the clearest indicator of good management.
E) signals that a company has the best business model in a market.
65) The most significant signs of a well-managed company are
A) the eagerness with which executives set stretch financial and strategic objectives and develop
an ambitious strategic vision.
B) aggressive pursuit of new opportunities and a willingness to change the company’s business
model whenever circumstances warrant.
C) good strategy-making combined with good strategy execution.
D) a visionary mission statement and a willingness to pursue offensive strategies rather than
defensive strategies.
E) a profitable business model and a balanced scorecard approach to measuring the company’s
performance.
66) Excellent execution of an excellent strategy is
A) the best test of managerial excellence and the best recipe for making a company a standout
performer.
B) a solid indication that managers are maximizing profits and looking out for the best interests
of shareholders.
C) the best test of whether a company is a true industry leader.
D) the best evidence that managers have an emerging business model.
E) the best test of whether a company enjoys sustainable competitive advantage.
67) Ben Weprin is founder and CEO of Graduate Hotel, a growing chain of boutique hotels
situated near college campuses and designed to cater to the nostalgia and local boosterism that
are part of the culture of university towns. (Room keys are imprinted with the names of famous
alumni, and public spaces are decorated with historical photos of campus life, vintage art and
other collegiate artifacts.) Mr. Weprin and his company are trying to create a brand that will find
year-round business by catering to more than just alumni coming back for once-a-year football
weekends or 10-year anniversaries of their graduating classes. What is the major question that
Mr. Weprin and his team need to ask about his company’s strategy?
A) What must managers do, and do well, to make a company a winner in the marketplace?
B) What can employees do, and do well, to ensure customer satisfaction?
C) What can shareholders do, and do well, to ensure a profitable company?
D) What do customers do, how to profile customers who buy a company’s product, and tailor
sales strategy around them?
E) What do suppliers do, and how to get supplies at the lowest cost to build a profitable
business?
68) A pharmaceutical giant acquires a manufacturer of rare specialty drugs to improve its falling
share prices and invests all its wealth into the deal. Due to a deficit, it agrees to do a joint venture
for the acquisition and involves a major automobile giant to fund the deal. After a rocky start, the
companies now have a strong market position and generate good profits. How would you
characterize this company’s strategy?
A) It fails the performance test.
B) It fails the competitive advantage and the fit tests.
C) It is a winning strategy.
D) It fails in all three tests.
E) It fails the fit test but passes the competitive advantage and performance tests.