69) Consider the following five companies and their situations.
• Company A is an established online fantasy sports gaming company that has been accused of
game-rigging, bribes and kickbacks.
• Company B, a ride share company, has delayed its planned initial public offering due to reports
of having an inhospitable workplace characterized by sexual harassment and discrimination.
• Company C, a pharmaceutical manufacturer, charges higher prices for life-saving drugs in
some countries than it charges in others.
• Company D, a manufacturer and marketer of high-end consumer electronics, has a strict Code
of Conduct that requires its suppliers to comply with several standards regarding safe working
conditions, fair treatment of workers, and environmentally safe manufacturing.
• Company E, a pizza delivery business, is a being boycotted by customers and losing sponsored
tie-ins with professional sports due to racist comments by its founder and CEO.
Which of the above companies is distinguished by an ethical strategy as opposed to an unethical
or flawed strategy?
A) Company A
B) Company B
C) Company C
D) Company D
E) Company E
70) In evaluating proposed or existing strategies managers should
A) initiate new initiatives even though they don’t seem to match the company’s internal and
external situation.
B) scrutinize the company’s existing strategies on a regular basis to ensure they offer a good
strategic fit, create a competitive advantage, and result in above-average performance.
C) evaluate the firm’s business model at least every three years.
D) ensure core capabilities are incorporated for establishing a competitive advantage.
E) align existing strategies with new strategies to emphasize incremental gains.
71) 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) results in a company becoming the dominant industry leader.
D) fits the company’s internal and external situation, builds sustainable competitive advantage,
and improves company performance.
E) can pass the ethical standards test, the strategic intent test, and the profitability test.
72) A seldom used strategic approach to setting a company apart from rivals and achieving a
sustainable competitive advantage is
A) striving to be the industry’s low-cost provider, thereby aiming for a cost-based competitive
advantage.
B) outcompeting rivals on the basis of such differentiating features as higher quality, wider
product selection, added performance, better service, more attractive styling, or technological
superiority.
C) developing competitively valuable resources and capabilities that rivals cannot easily match,
copy, or trump with capabilities of their own.
D) focusing on a narrow market niche and winning a competitive edge by doing a better job than
rivals of serving the special needs and tastes of buyers comprising the niche.
E) copying the attributes of a popular product or service.
73) A company achieves sustainable competitive advantage when
A) it has a profitable business model.
B) a sufficiently large number of buyers have a lasting preference for its products or services as
compared to the offerings of competitors.
C) it is able to maximize shareholder wealth.
D) it is consistently able to achieve both its strategic and financial objectives.
E) its strategy and its business model are well matched and in sync.
74) A company’s business strategy is not likely to include
A) actions to respond to changing market conditions or other external factors.
B) actions to strengthen competitiveness via strategic alliances and collaborative partnerships.
C) actions to strengthen internal capabilities and competitively valuable resources.
D) actions to manage the functional areas of the business.
E) management’s actions to revise the company’s financial and strategic performance targets.
75) Changing circumstances and ongoing managerial efforts to improve the strategy
A) account for why a company’s strategy evolves over time.
B) explain why a company’s strategic vision undergoes almost constant change.
C) make it very difficult for a company to have concrete strategic objectives.
D) make it very hard to know what a company’s strategy really is.
E) are consistent with a planned strategy approach.
76) What is strategy and why is it important?
77) Briefly define each of the following terms.
a. Sustainable competitive advantage
b. Deliberate strategy
c. Emergent strategy
d. Realized strategy
e. Abandoned strategy
78) What are the three tests of a winning strategy?
79) Identify and briefly describe the five most frequently used strategic approaches to achieving
a sustainable competitive advantage. Provide examples.
80) What is the connection between a company’s strategy and its quest for sustainable
competitive advantage?
81) Provide at least two examples of a company’s competitively valuable capabilities.
82) What are the three questions that managers can use to distinguish a winning strategy from a
so-so or flawed strategy? Briefly explain why each question is important.
83) Should a company’s strategy be tightly connected to its quest for competitive advantage?
Why or why not? What difference does it make whether a company has a sustainable
competitive advantage or not?
84) During a recession, a high-end beverage producer facing strong competition in a saturated
market has decided to phase out all its flagship products and introduce a new line of second-label
beverages at lower price points in reaction to its falling market share. Would this type of a
reactive strategy revive its position? Why or why not?
85) Compare the business models of Gillette and Epson.
86) Why are the capabilities needed to build a sustainable competitive advantage so important to
a winning business strategy? Cite one of the company examples in the chapter to illustrate your
answer.
87) Why is a company’s strategy typically a blend of proactive and reactive approaches?
88) Can an organization succeed by pursuing strategies that are proactive and reactive? Explain.