A distinctive competence represents competitively superior resource strength. True or
false? Explain your answer.
Answer:
A company lacking stand-alone resource strength should focus on bundling several
resource strengths into a core competence. True or false? Explain and support your
answer.
Answer:
A global strategy embraces the theme “think global, act global,” whereas a
multidomestic strategy relies more on a “think local, act local” mentality. True or false?
Explain.
Answer:
The task of crafting a company’s strategy is typically a job for the company’s whole
management team, not just a small group of senior executives. True or false? Explain
and support your answer.
Answer:
In determining the various strategic issues that a company needs to address, managers
need to consider BOTH the results of its analysis of the company’s external
environment and the results of its evaluation of the company’s resources and
competitive position. True or false? Explain and defend your answer.
Answer:
The attractiveness test is the most important test for determining whether diversification
into a new business is likely to result in 1 + 1 = 3 increases in shareholder value (as
opposed to simply a 1 + 1 = 2 type of increase). True or false? Justify and explain your
answer.
Answer:
Values and ethical standards not only must be explicitly stated but they also must be
deeply ingrained into the corporate culture. True or false? Explain.
Answer:
An organization’s strategic plan consists of the actions which management plans to take
in the near future. True or false? Explain and justify your answer.
Answer:
The achievement of financial objectives tends to be a lagging indicator of a company’s
performance, while the achievement of strategic objectives tends to be a leading
indicator of a company’s future financial performance. True or false? Support and
explain your answer.
Answer:
Ethical relativism equates to multiple sets of ethical standards. True or false? Explain
your answer.
Answer:
The single most visible factor that distinguishes successful culture-change efforts from
failed attempts is competent leadership at the top. True or false? Explain and justify
your answer.
Answer:
All firms are subject to offensive challenges from rivals. Which of the following is
NOT among the intent of the best defensive move?
A. Lower the risk of being attacked
B. Weaken the impact of any attack that occurs
C. Pressure challengers to aim their efforts at other rivals
D. Help protect a competitive advantage
E. Harm the firm’s competitive position
Answer:
Which of the following exemplifies location-based advantage for the companies
competing on an international basis?
A. Microsemi Corporation acquires California based Actel Corporation.
B. RBC Wealth Management closes operations in South Florida.
C. Samsung diversifies and ventures into textiles and food processing.
D. Hyundai signs a memorandum of understanding with the government of South
Korea to halt exports.
E. De Beers sets up operations in the mining region of South Africa.
Answer:
Which of the following builds a moral case for corporate social responsibility and
environmentally sustainable business practices?
A. Socially responsible actions and sustainable business practices can lower costs and
enhance employee recruiting and workforce retention.
B. Opportunities for revenue enhancement may also come from CSR and
environmental sustainability strategies.
C. C.Well-conceived CSR strategies and sustainable business practices are in the best
long-term interest of shareholders.
D. A business engages in ordinary decency and civic-mindedness, and contributes to
society’s wellbeing.
E. A strong commitment to socially responsible behavior reduces the risk of
reputation-damaging incidents.
Answer:
Mergers and acquisitions:
A. are nearly always successful in achieving their desired purpose.
B. frequently do not produce the hoped-for outcomes.
C. are generally less effective than forming alliances or partnerships with these same
companies.
D. are highly risky because of the financial drain that comes from using the company’s
cash resources to pay for the costs of the merger or acquisition.
E. are usually more successful in achieving cost reductions than in expanding a
company’s market opportunities.
Answer:
Corporate restructuring strategies:
A. involve making major changes in a diversified company’s business lineup, divesting
some businesses and/or acquiring others, so as to put a whole new face on the
company’s business lineup.
B. entail reducing the scope of diversification to a smaller number of businesses.
C. entail selling off marginal businesses to free up resources for redeployment to the
remaining businesses.
D. focus on crafting initiatives to restore a diversified company’s money-losing
businesses to profitability.
E. focus on broadening the scope of diversification to include a larger number of
businesses and boosting the company’s growth and profitability.
Answer:
Changing a problem culture:
A. is one of the toughest managerial tasks because of the heavy anchor of ingrained
behaviors and ways of doing things.
B. is best done by instituting an aggressive program to train employees in the ways and
beliefs of the new culture to be implanted.
C. is best done by selecting a team of key employees to lead the culture change effort.
D. requires writing a new statement of core values, having a series of lengthy meetings
with employees to explain the new culture and the reasons why cultural change is
needed, and then having both employees and shareholders vote to ratify and adopt the
new culture.
E. can be done quickly only if managers tie incentive compensation to exhibiting the
desired new cultural behaviors and if managers visibly praise people who exhibit the
desired new cultural traits.
Answer:
Broad differentiation strategies generally work best in market circumstances where:
A. buyer needs and uses of a product are diverse and not fully satisfied by a
standardized product.
B. most buyers have similar needs and use the product in the same ways.
C. the products of rivals are weakly differentiated and most competitors are resorting to
clever advertising to try to set their product offerings apart.
D. buyers are price sensitive and product switching costs are quite low.
E. market competition revolves around slowly evolving product features.
Answer:
To obtain maximum benefits from benchmarking, best practices, reengineering, TQM,
and Six Sigma programs aimed at facilitating better strategy execution, managers need
to:
A. start with a clear idea of what specific outcomes really matter, such as a Six Sigma
defect rate or superior customer satisfaction, and then build a total quality culture that is
genuinely committed to achieving these outcomes.
B. have annual contests to see which part of the company is making the greatest strides
in approaching operating excellence.
C. strive for 100 percent control over the variability in how each and every value chain
activity is performed.
D. have at least 50 percent of company personnel earn “green belts” in Six Sigma
techniques.
E. build core competencies in TQM, Six Sigma, benchmarking, best practices adoption,
and business process reengineering.
Answer:
An economy of scope is BEST illustrated by being able to eliminate or reduce costs by:
A. combining related value-chain activities of different businesses into a single
operation.
B. performing all of the value chain activities of related sister businesses at the same
location.
C. extending the firm’s scope of operations over a wider geographic area.
D. expanding the size of a company’s manufacturing plants.
E. having more value chain activities performed in-house rather than outsourcing them.
Answer:
Which of the following most accurately describes the task of crafting a company’s
strategy?
A. In most companies, strategy-making is the exclusive province of top
managementowner-entrepreneurs, CEOs, and other very senior executives.
B. The more a company’s operations cut across different products, industries, and
geographical areas, the more that headquarters executives have little option but to
delegate considerable strategy-making authority to down-the-line managers in charge of
particular subsidiaries, product lines, geographic sales offices, and plants.
C. A company’s board of directors generally takes the lead role in crafting a company’s
strategy.
D. In most of today’s companies, the lead strategy-making role is being assumed by an
elite group of corporate entrepreneurs.
E. Masterful strategies are nearly always the product of brilliant corporate
entrepreneurs.
Answer:
A company’s resources and capabilities represent:
A. the firm’s net working capital and related determinants for measuring operating
performance and capabilities.
B. the firm’s competitive assets, which are considered determinants of its
competitiveness and ability to succeed in the marketplace.
C. whether the firm has the industry’s most efficient value chain.
D. the management’s source of funding of new strategic initiatives.
E. positive trends with relevant cultural factors related to buyers’ choices and product
modifications
Answer:
The race among rivals for industry leadership is more likely to be a marathon rather
than a sprint when:
A. new industry or market segments are yet to be developed and create altogether new
consumer demand.
B. fast followers find it easy to leapfrog the pioneer with even better next-generation
products of their own.
C. the market depends on the development of complementary products or services that
are currently not available, buyers have high switching costs, and influential rivals are
in position to derail the efforts of a first-mover.
D. entry barriers are high, substitute products or services are readily available, and
buyers are prone to negotiate aggressively for better terms and lower prices.
E. there are nearly always big advantages to being a slow mover rather than an early
mover, especially in regards to avoiding the “mistakes” of first or early movers.
Answer:
A production-based emphasis toward a low-cost provider strategy usually requires a
company to strive for:
A. product superiority.
B. continuous cost reductions without sacrificing acceptable quality and essential
features.
C. small-scale production or custom-made products that match the tastes and
requirements of niche members.
D. appealing features and better quality at lower costs than rivals.
E. whatever differentiating features buyers are willing to pay for.
Answer:
Retrenching to a narrower diversification base is:
A. usually the most attractive long-run strategy for a broadly diversified company
confronted with recession, high interest rates, mounting competitive pressures in
several of its businesses, and sluggish growth.
B. a strategy that allows a diversified firm’s energies to be concentrated on building
strong positions in a smaller number of businesses rather the stretching its resources and
managerial attention too thinly across many businesses.
C. an attractive strategy option for revamping a diverse business lineup that lacks strong
cross-business financial fit.
D. sometimes an attractive option for deepening a diversified company’s technological
expertise and supporting a faster rate of product innovation.
E. a strategy best reserved for companies in poor financial shape.
Answer:
Because when to make a strategic move can be just as important as what move to make,
a company’s best option with respect to timing is:
A. to be the first mover.
B. to be a fast follower.
C. to be a late mover (because it is cheaper and easier to imitate the successful moves of
the leaders and moving late allows a company to avoid the mistakes and costs
associated with trying to be a pioneerfirst-mover disadvantages usually overwhelm
first-mover advantages).
D. to be the last-moverplaying catch-up is usually fairly easy and almost always is
much cheaper than any other option.
E. to carefully weigh the first-mover advantages against the first-mover disadvantages
and act accordingly.
Answer:
One of the biggest strategic challenges to competing in the international arena includes:
A. how to leverage the opportunities arising from shifting exchange rates.
B. how to charge the same price in all country markets.
C. how to identify foreign firms licensed to produce and distribute the company’s
products.
D. whether to offer a standardized product worldwide or a customized product offering
in each different country market.
E. whether to pursue a franchising strategy or a joint venture strategy.
Answer:
A useful guideline in designing strategy-facilitating policies and operating procedures
is:
A. to prescribe enough policies to give organizational members clear direction in
implementing strategy and to place reasonable boundaries on their actions. This then
empowers them to act within these boundaries in pursuit of company goals.
B. that strictly enforced policies work better than loosely enforced policies.
C. that more policies/procedures work better than fewer policies/procedures, and that
strict enforcement always beats lax enforcement.
D. to let individuals act in an empowered and self-directed way, subject only to the
constraint that their actions and behavior be ethical and in step with the corporate
culture.
E. to prescribe enough policies and procedures that little is left to chance in performing
value chain activities, and employees should have no leeway to do things in a manner
that deviates from the company’s best-practices standard.
Answer:
Sometimes a company can short-circuit the task of building an organizational capability
in-house by:
A. putting in high-incentive bonuses to reward individual employees who train hard to
develop the desired capability.
B. launching an extensive training effort to develop the capability quickly with newly
hired employees.
C. either acquiring a company that has already developed the capability or else
acquiring the desired capability through collaborative efforts with outsiders having the
requisite skills, know-how, and expertise.
D. using benchmarking and the adoption of best practices to imitate a capability that
rivals have already developed.
E. empowering a team of employees to develop the capability however they best see fit.
Answer:
Crafting and executing a strategy is a top-priority managerial task because:
A. it helps management create tight fits between a company’s strategic vision and
business model.
B. it allows all company personnel, and especially senior executives, to know the
answer to “who are we, what do we do, and where are we headed?”
C. it is management’s prescription for doing business, its roadmap to competitive
advantage, a game plan for pleasing customers, and its formula for improving
performance.
D. it provides clear guidance as to what the company’s business model and strategic
intent are, and helps keep managerial decision-making from being rudderless.
E. it establishes how well executives perform these tasks and are the key determinants
of executive compensation.
Answer:
Which of the following is an advantage of a decentralized organizational structure?
A. Reducing the layers of management and encouraging lower-level managers and
rank-and-file employees to exercise initiative and act responsibly
B. Making it easy to fix accountability when company performance targets are not met
C. Generating higher productivity on the part of the workforce and a greater ability to
become an industry low-cost leader
D. Enhancing cross-unit coordination and the capture of strategic fits
E. Establishing the emergence of a collegial, collaborative culture where teamwork is a
core value and decisions are made on the basis of consensus
Answer:
Which of the following is NOT one of the six questions that comprise the task of
evaluating a company’s resources and competitive position?
A. What are the company’s most profitable geographic market segments?
B. How well is the company’s present strategy working?
C. How do a company’s value chain activities impact its cost structure and customer
value proposition?
D. Is the company competitively stronger or weaker than key rivals?
E. What strategic issues and problems merit front-burner managerial attention?
Answer:
For backward vertical integration into the business of suppliers to be a viable and
profitable strategy, a company:
A. must first be a proficient manufacturer.
B. must be able to achieve the same scale economies as outside suppliers and match or
beat suppliers’ production efficiency with no drop-off in quality.
C. must have excess production capacity so that it has an ample in-house ability to
undertake additional production activities.
D. needs to have a wide product line, so it can supply parts and components for many
products.
E. should have a distinctive competence in production process technology and at least a
core competence in manufacturing R&D.
Answer:
Which of the following is a substantive culture-changing action that a company’s
managers can undertake to alter a problem culture?
A. Identify aspects of the present culture that pose problems.
B. Revise policies and procedures in ways that will help drive cultural change and
replace senior executives who are resisting and obstructing needed organizational and
cultural changes.
C. Empower employees to adopt whatever new work practices they believe will be an
improvement.
D. Make a concerted effort to turn the company’s core competencies into distinctive
competencies.
E. Shift from decentralized to centralized decision-making so as to give senior
executives more authority and control in driving cultural change.
Answer:
Calculating competitive strength ratings for a company and its rivals using the
industry’s most telling measures of competitive strength or weakness:
A. is a way of determining which competitor has the highest overall competitive
advantage in the marketplace and which competitor is faced with the lowest overall
competitive disadvantage.
B. is the most reliable indicator of which industry member has the highest overall
product quality.
C. is a powerful way of revealing which competitors are in the best and worst strategic
groups.
D. is the most reliable indicator of which industry member has the lowest overall costs
and is the low-cost leader.
E. pinpoints which industry rivals are most insulated from the industry’s driving forces.
Answer:
Which of the following is NOT a fundamental part of a company’s culture?
A. The work practices and behaviors that define “how we do things around here”
B. The company’s standard of what is ethically acceptable and what is not, along with
the “chemistry” and “personality” that permeates its work environment
C. The core values and business principles that management preaches and practices
D. The company’s strategic vision, strategic intent, and culture strategy
E. The legends and stories that people repeat to illustrate and reinforce the company’s
core values, traditions, and business practices
Answer:
When an activity becomes something a company has learned to perform proficiently
and capably, the company is said to have:
A. a competence.
B. a competitive advantage over rivals.
C. a key value chain proficiency.
D. a distinctive capability.
E. a resource advantage.
Answer:
The businesses in a diversified company’s lineup exhibit good resource fit when:
A. the resource requirements of each business exactly match the resources the company
has available.
B. individual businesses have matching resource requirements at points along their
value chain and add to a company’s overall resource strengths and when solid parenting
capabilities exist without spreading itself too thin.
C. each business generates just enough cash flow annually to fund its own capital
requirements and thus does not require cash infusions from the corporate parent.
D. each business unit produces sufficient cash flows over and above what is needed to
build and maintain the business, thereby providing the parent company with enough
cash to pay shareholders a generous and steadily increasing dividend.
E. there are enough cash cow businesses to support the capital requirements of the cash
hog businesses.
Answer:
A vertical integration strategy can expand the firm’s range of activities:
A. backward into sources of supply and/or forward toward end users.
B. backward into other industry business-lines and/or forward to suppliers of raw
materials.
C. to enable the supply chain the opportunity for expansion.
D. to complement the industry’s horizontal value chain line of profitability.
E. to establish full integration by participating in a tapered integration (without the
outsourced and in-house activities).
Answer:
Which of the following statements regarding multidomestic and global competition is
false?
A. In global competition, rivals vie for worldwide market leadership and the leading
competitors compete head-to-head in the markets of many different countries.
B. In globally competitive industries, a company’s competitive position in one country
both affects and is affected by its position in other countries.
C. In multidomestic competition, there is greater cross-country variation in market
conditions and the nature of the competitive contest among rivals than tends to be the
case in globally competitive markets.
D. With multidomestic competition, the competitive contest is localized, with rivals
battling for national market leadership; moreover, winning in one country market does
not necessarily signal that a company has the ability to fare well in the markets of other
countries.
E. In global competition, the size of a firm’s worldwide competitive advantage (or
disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in
each country market where it competes.
Answer:
A core competence:
A. is a more competitively valuable strength than a competence because of the key role
the activities play in the company’s strategy.
B. typically has competitive value, the amount of which is reflected in the physical and
tangible assets on a company’s balance sheet.
C. usually is grounded in the technological expertise of a particular department or work
group.
D. is more difficult for rivals to copy than a distinctive competence.
E. refers to a company’s lowest-cost and most efficiently executed value-chain activity.
Answer:
Who is most likely to have strong strategy implementation capabilities?
A. Michael has a talent for asking tough, incisive questions.
B. Samantha is often sympathetic to her team members’ failures.
C. Carl can complete a job in half the time as his colleagues.
D. Lily prefers completing a task by herself.
E. Rodrigo advocates promoting qualified people from within the firm.
Answer:
What does a company specifically exhibit when it relentlessly pursues an ambitious
strategic objective, concentrating the full force of its resources and competitive actions
on achieving that objective?
A. Competitive edge.
B. Sustainable advantage.
C. Strategic intent.
D. Financial strength.
E. Strategic vision.
Answer:
Which of the following does NOT exemplify business process reengineering?
A. Blue Mountain creates teams of mixed-occupation freelancers to design Christmas
cards.
B. Speedmore integrates three distribution units to form a consolidated zonal
distribution center.
C. Bank of America automates global transaction services in a quest for operational
efficiencies.
D. PayPal segregates payment notification operations from mobile transfer operations
to expand its customer base.
E. Florida Power eliminates work depots, entrusting the task of repair to crew members
in a mobile van.
Answer:
When discussing “economies of scope,” it involves understanding that they:
A. stem from the cost-saving efficiencies of operating over a wider geographic area.
B. have to do with the cost-saving efficiencies of distributing a firm’s product through
many different distribution channels simultaneously.
C. stem from cost-saving strategic fits along the value chains of related businesses.
D. refer to the cost savings that flow from operating across all or most of an industry’s
value chain activities.
E. arise from the cost-saving efficiencies of having a wide product line and offering
customers a big selection of models and styles to choose from.
Answer:
Identify and briefly explain any three factors that lead to strong bargaining power on the
part of buyers.
Answer:
Why is it appropriate to argue that good strategy-making combined with good strategy
execution are valid signs of good management?
Answer:
What three principles underlie the statistical thinking of Six Sigma quality control
programs?
Answer:
Identify and briefly explain the two types of healthy cultures and how they aid in good
corporate strategy execution.
Answer:
Sustainability is a term used in various ways, but most often it concerns a firm’s
relationship to the environment and its use of natural resources. Define the term from a
company’s business practices and strategy perspective.
Answer:
Identify and briefly discuss each of the three options for entering new businesses. What
are the driving choice parameters for entry into new businesses and which one is the
most popular in the sense of being used most frequently?
Answer:
Not all buyers of an industry’s product are likely to possess the same degree of
bargaining power or leverage over the terms and conditions under which they purchase
the product. True or false? Explain.
Answer:
How does a transnational strategy differ from a multidomestic or a global strategy?
Answer:
What are the advantages and benefits of using an industry attractive-business strength
matrix to evaluate a diversified company’s lineup of businesses?
Answer:
Explain the difference between ethical universalism and integrated social contracts
theory. Which school of thought is most inclusive? Explain the reasons for your answer.
Answer:
Discuss why timing of strategic moves is important.
Answer:
In what market and competitive circumstances are focused low-cost and focused
differentiation strategies attractive?
Answer:
What are the five traits of unhealthy cultures?
Answer:
Identify and briefly discuss two “best targets” for offensive attacks by companies.
Answer:
Identify at least three indicators of whether a company’s present strategy is working
well.
Answer:
Give two examples of “symbolic” culture-changing actions and two examples of
“substantive” culture-changing actions.
Answer:
What are the pitfalls to be avoided in pursuing a broad differentiation strategy?
Answer: