Strategic group mapping is a visual technique for displaying:
A. how many rivals are pursuing each type of strategy.
B. which companies have the biggest market share and who the industry leader really
is.
C. the different market or competitive positions that rival firms occupy in an industry
and for identifying each rival’s closest competitors.
D. which companies have the highest degrees of brand loyalty.
E. which companies have failing business models.
Which of the following activities does NOT reflect short termism?
A. Decreasing spending on research and development
B. Avoiding stock repurchases made to increase earnings-per-share of a company
C. Maintaining and hiring critical employees with compensations tied to annual
company earnings
D. Taking into consideration all tangible future cash flows over intangible brand value
appreciation
E. Carrying business operations with existing technologies in all markets to cut costs
and increase profits
A rival’s strategic moves and countermoves are:
A. indicators for the visualization of strategic mapping techniques.
B. enabled and constrained by the set of capabilities they have at hand.
C. measured by the extent to which they can unveil financial objectives.
D. responses to the broader definition of the industry opportunities.
E. signs of the competitive pressures from the industry.
The means to enhance differentiation through activities at the forward end of the value
chain system do NOT include:
A. engaging in cooperative advertising and promotions.
B. creating exclusive arrangements with downstream sellers or other mechanisms that
increase their incentives for enhanced-delivery customer value.
C. creating and enforcing standards for downstream activities.
D. assisting in training channel partners in business practices.
E. enhancing cost-reducing activities with defensive functionality designed to create
incentives.
A strategic vision constitutes management’s view and conclusions about the company’s:
A. long-term direction and what product-market-customer mix seems optimal.
B. business model and the kind of value that it is trying to deliver to customers.
C. justification of why the business will be a money maker.
D. past and present scope of work.
E. long-term plan for outcompeting rivals and achieving a competitive advantage.
The approach to identifying the items needed to be placed on management’s action
agenda of the strategy execution plan always involves:
A. generalized activities that will underscore the particulars of the company’s situation.
B. some definitive managerial recipe for successful strategy execution that works for all
company situations and all types of strategies, or that works for all types of managers.
C. a set of unimportant managerial tasks that must be covered no matter what the
circumstances.
D. senior management’s judgment about how to proceed in light of prevailing
circumstances.
E. a high-end differentiation strategy for proficient implementation and execution.
When companies engage in value-creating activities, they do so by:
A. focusing on exploiting a company’s best-executed operating strategy.
B. concentrating on efficient performance of the company’s primary value chain
activities.
C. concentrating on minimizing the costs associated with the design of a product or
service.
D. drawing on specific company resources and capabilities that underlie and enable the
activity.
E. focusing on working with forward-channel allies to develop capabilities to outmatch
the capabilities of rivals.
Which of the following factors is NOT a relevant consideration in determining the
strength of buyer bargaining power?
A. The relationship between the buyer market and seller market
B. The degree to which the seller is a manufacturer of goods and services in substantial
quantities
C. The degree to which buyers pose a credible threat to integrate backward into the
product market of sellers
D. The degree to which buyers are well-informed about a seller’s products, prices, and
costs
E. The degree to which industry goods are standardized and undifferentiated
The moral case for why a company should actively promote the betterment of society
and act in a manner benefitting all its stakeholders:
A. is based on the principle of treating people fairly and with respect.
B. is based on the conviction that improving the well-being of society ranks higher in
priority and is certainly nobler than making a profit and serving the interests of
shareholders.
C. boils down to “it’s the right thing to do.”
D. rests on the principle that a business is duty bound to fulfill its social contract to
serve the interests of all stakeholders in a business enterprise.
E. is based on the principle that business activities lack real legitimacy and have few
socially redeeming qualities unless and until a company exerts a significant and sincere
effort to give something back to the community.
Why do companies decide to enter a foreign market?
A. To capture economies of scale in product development, manufacturing, or marketing
B. To raise input costs through greater pooled purchasing power
C. To decrease the rate at which they accumulate experience and move up the learning
curve
D. To concentrate risk within a broader base of countries, especially when sales are
down in one area and the company can undermine sales elsewhere
E. To exploit the natural resources found within its home market
What makes the managerial task of executing strategy so challenging and demanding is:
A. the trial-and-error experimentation that is required to come up with a workable
organizational structure.
B. the people-management skills required, the resistance to change that has to be
overcome, and the perseverance necessary to get a variety of initiatives launched and
kept moving along.
C. the time and effort it takes to build core competencies.
D. the time, training, and creative effort it takes to empower employees and teach them
responsible decision making.
E. the supervisory requirements associated with getting company personnel to do things
the right way.
A drink manufacturer finds setting up a plant to make its own bottle caps expensive and
technically difficult. Which of the following will be most helpful in solving the
manufacturer’s problem?
A. Outsourcing
B. Achieving economies of scale
C. Lowering input costs
D. Increasing bargaining power
E. Going for a vertical integration with a distributor
A company’s stated core values and ethical principles are:
A. important because of their role in ensuring that company executives will not engage
in unethical behavior or behave in a manner that is contrary to the company’s core
values.
B. typically tightly linked to its strategic vision and strategy.
C. the best indicators of a company’s social responsibility strategy.
D. meant to foster a work climate where company personnel share common and
strongly held convictions about how the company’s business is to be conducted and
provide guidance in displaying the core values in their actions and behaviors.
E. strictly enforced in strong culture companies and weakly enforced in weak culture
companies.
A strongly implanted corporate culture has a powerful influence on behavior because of
all of the following EXCEPT:
A. most corporate personnel have acknowledged and accepted the cultural traditions.
B. management expectations and co-worker peer pressure cause employees to conform.
C. over time people who do not like the culture tend to leave.
D. over time achieving low-workforce-turnover is a catalyst for conformity and
acceptance.E. a strong leader can use coercion and the threat of punishment to enforce
norms.
Which of the following is NOT an option for remedying a supplier-related cost
disadvantage?
A. Integrate backward into the business of high-cost suppliers in an effort to reduce the
costs of the items being purchased.
B. Negotiate more favorable prices with suppliers.
C. Collaborate closely with suppliers to identify mutual cost-saving opportunities.
D. Switch to lower-priced substitute inputs.
E. Persuade forward channel allies to implement best practices.
Which of the following is NOT a benefit of prescribing policies and operating
procedures to aid management’s task of implementing strategy?
A. Placing limits on independent action and helping overcome resistance to change
B. Providing top-down guidance to operating managers, supervisory personnel, and
employees regarding how things need to be done and what behavior is expected
C. Promoting the creation of a work climate that facilitates good strategy execution
D. Helping build employee commitment to adopting best practices and using the tools
of TQM and Six Sigma
E. Helping enforce consistency of effort in how particular activities are performed in
geographically scattered organization units
The essential difference between a “think global, act global” and a “think global, act
local” approach to strategy-making is that:
A. a “think global, act global” approach entails extensive strategy coordination across
countries and a “think global, act local” approach entails little or no strategy
coordination across countries.
B. the former aims at implementing the same business model worldwide, whereas the
latter aims at implementing customized business models to better match local market
circumstances.
C. the “think global, act local” approach gives local managers more latitude to make
minor strategy variations where necessary to better satisfy local buyers and to better
match local market conditions.
D. a “think global, act global” approach involves selling a mostly standardized product
worldwide, whereas a “think global, act local” approach entails selling products that are
highly differentiated from country to country.
E. a “think global, act global” approach involves selling under a single brand name
worldwide, whereas a “think global, act local” approach entails utilizing multiple
brands (typically one for each different country or group of neighboring countries).
Vertical integration strategies:
A. extend a company’s competitive scope within the same industry by expanding its
operations across multiple segments or stages of the industry value chain.
B. are one of the best strategic options for helping companies win the race for global
market leadership.
C. offer good potential to expand a company’s lineup of products and services.
D. are particularly effective in boosting a company’s ability to expand into additional
geographic markets, particularly the markets of foreign countries.
E. area good strategy option for helping a company revamp its value chain and bypass
low value-added activities.
Which of the following airlines does NOT employ a low-cost provider strategy?
A. Airline 1 offers low prices on short-distance flights and cuts down on meals during
flights.
B. Airline 2 offers low prices on long-distance flights and has long service times for its
planes between flights.
C. Airline 3 offers low prices on short-distance flights and improves flight carrier
capacity through addition of seats by reducing distance between existing seats.
D. Airline 4 offers low prices on short-distance flights and pays minimum wage rates to
the flight crew.
E. Airline 5 offers low prices on long-distance flights and charges fees for carry-on as
well as checked luggage.
The principal offensive strategy options include all of the following EXCEPT:
A. using a cost advantage to attack competitors on the basis of lower price or better
product value.
B. using hit-and-run or guerrilla warfare tactics to grab sales and market share from
complacent or distracted rivals.
C. launching a preemptive strike to secure an advantageous position that rivals are
prevented or discouraged from duplicating.
D. pursuing continuous product innovation to draw sales and market share away from
less innovative rivals.
E. initiating a market threat and counterattack simultaneously to effect a distraction.
Why is a company’s strategy partly proactive and partly reactive?
A dining facility with multiple branches caters to newlywed couples only. The
ambience, special live music arrangements for each couple, and privacy of the dining
sections have become a rage among newlyweds. Which of the five generic strategies
has the company used?
What are the strategic disadvantages of a forward vertical integration strategy?
Identify and discuss the basic tenets, the chief advantages, and the chief disadvantages
of decentralized organizational structures.
Identify the key characteristics of a well-stated organizational objective.
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?
What are the four tests that should be used to measure the competitive power of a
company’s resource strengths?
Identify and explain at least two drawbacks to forming a strategic alliance.
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.
Identify and explain the three schools of thought about ethical standards for companies
with international operations.