A company’s value statement and code of ethics:
A. help to mold the culture and communicate what kinds of actions and behaviors are
expected of all company personnel.
B. help prevent it from coming across to customers and the general public as greedy.
C. serve the valuable purpose of making its suppliers hesitant to engage in business
practices that are unethical.
D. are the most important factors determining its reputation with customers, suppliers,
employees, shareholders, and society at large.
E. should always be made a prominent and visible part of the company’s strategic intent
and strategy.
Answer:
Which of the following exemplifies one of the most widely used methods of gauging
how well a company is executing its strategy?
A. Merrill & Company has a disconnected organizational arrangement whereby pieces
of an activity are performed in different functional departments.
B. Oceania identifies agents of change who are convinced about sticking to the old
ways of doing things.
C. Honwell narrates success stories of rival brands to convince its personnel about
traditional wisdom.
D. Fizz-Cola judges the efficiency of internal operations by benchmarking them against
best-in-industry performers.
E. Motorola develops the data to measure how poorly rival brands perform against the
best-practice standards across industry.
Answer:
A think-global, act-global strategic theme puts emphasis on:
A. executing a global domination strategy that focuses the company’s resource strengths
on entry strategies across all country boundaries.
B. ensuring that value chain activities are defined by country-specific attributes to
capitalize on economies of scale.
C. building a global brand name and aggressively pursuing opportunities to transfer
ideas, products, and capabilities from one country to another.
D. elevating resources and capabilities developed on a country-by-country basis so as to
capitalize on a country’s uniqueness.
E. implementing mass-customization techniques that can address local preferences
efficiently.
Answer:
Vertical integration can lower costs by:
A. expanding supplier power.
B. facilitating the coordination of production flows and avoiding bottlenecks.
C. establishing the framework for operating.
D. creating control factors across the value chain.
E. accommodating shifting buyer preferences.
Answer:
Best-cost provider strategies are those that:
A. are a hybrid of low-cost provider and differentiation strategies that aim at providing
desired attributes while beating rivals on price.
B. are rewarded by providing buyers with the best attributes at a premium.
C. have strategy elements related to the lowest-cost provider in the largest and fastest
growing (or best) market segment.
D. look for a low-cost advantage rather than a differentiation advantage.
E. look for a differentiation advantage rather than a low-cost advantage.
Answer:
The diamond framework can be used to reveal the answers to all of the following that
are important for competing on an international basis EXCEPT:
A. where foreign entrants into an industry are most likely to come from.
B. how to formulate an exit strategy to push foreign competitors out of the market.
C. which countries’ foreign rivals are likely to be the weakest.
D. how managers can decide which foreign markets to enter first.
E. where to locate different value chain activities so they are the most beneficial.
Answer:
The nine-cell industry attractiveness competitive strength matrix:
A. is useful for helping decide which businesses should have high, average, and low
priorities in deploying corporate resources.
B. indicates which businesses are cash hogs and which are cash cows.
C. pinpoints what strategies are most appropriate for businesses positioned in the three
top cells of the matrix, but is less clear about the best strategies for businesses
positioned in the bottom six cells.
D. identifies which sister businesses have the greatest strategic fit.
E. identifies which sister businesses have the highest level of resource fit.
Answer:
A company that fails to manage its strategic alliance probably has:
A. incorporated contractual safeguards.
B. made opportunities for learning a routine management process.
C. created a system to manage alliances in a systematic fashion.
D. established strong interpersonal relationships and established trust.
E. refrained from making commitments to its partners and ensured they do the same.
Answer:
Which of the following is defined as a formal agreement between two or more separate
companies in which they agree to work cooperatively toward some common objective?
A. Joint venture
B. Vertical integration
C. Strategic alliance
D. Forward integration
E. Outsourcing
Answer:
The approach of a firm using a “think global, act local” version of a transnational
strategy entails:
A. producing and marketing a variety of product versions under the same brand name,
with each different version being designed specifically to accommodate the needs and
preferences of buyers in a particular country.
B. having little or no strategy coordination across countries.
C. pursuing the same basic competitive strategy theme (low cost, differentiation, best
cost, focused) in all countries where the firm does business but giving local managers
some latitude to adjust product attributes to better satisfy local buyers and to adjust
production, distribution, and marketing to be responsive to local market conditions.
D. selling the company’s products under a wide variety of brand names (often one brand
for each country or group of neighboring countries) so buyers in each country market
will think they are buying a locally made brand.
E. selling numerous product versions (each customized to buyer tastes in one or more
countries and sometimes branded for each country),but opting to only sell direct to
buyers at the company’s website so as to bypass the costs of establishing networks of
wholesale/retail dealers in each country market.
Answer:
Two analytical tools useful in determining whether a company’s prices and costs are
competitive are:
A. SWOT analysis and key success factor analysis.
B. SWOT analysis and benchmarking.
C. value chain analysis and benchmarking.
D. competitive position assessment and competitive strength assessment.
E. driving forces analysis and SWOT analysis.
Answer:
Organizing a company’s work effort to promote successful strategy execution involves:
A. deciding how much to spend on training managers and employees.
B. deciding which value chain activities to perform in-house and which to outsource,
and making internally performed strategy-critical value chain activities the main
building blocks in the organization structure.
C. choosing an organization structure that is a tight fit with the corporate culture.
D. hiring an inexpensive yet capable management team.
E. instituting a compensation structure that reduces employee turnover and thus
stabilizes the makeup of work teams.
Answer:
Which of the following is NOT a characteristic of a highly centralized organizational
structure?
A. Top-level managers retain decision authority for most strategic and operating
activities.
B. Strict control and enforcement of detailed procedures backed by rigorous managerial
accountability is the most reliable way to keep the daily execution of strategy on track.
C. Tight control from the top is a more effective means for coordinating company
actions and makes it easy to fix accountability when things do not go well.
D. One of the basic tenets is that most company personnel have neither the time nor the
inclination to direct and properly control the work they are performing and, further, they
lack the knowledge and judgment to make wise decisions about how best to do their
work.
E. The decision about where to draw the divisional lines depends foremost on the nature
of the relatedness and the strategy-critical building blocks, in terms of which businesses
have key value chain activities in common.
Answer:
Which of the following is a diversified business with one major “core” business and a
collection of small related or unrelated businesses?
A. A broadly diversified enterprise
B. A narrowly diversified enterprise
C. A multi-business enterprise
D. A high compensation/low risk enterprise
E. A dominant business enterprise
Answer:
In the strategy-making, strategy-executing process, effective corporate governance
requires a company’s board of directors to:
A. play the lead role in forming the company’s strategy and then directly supervising the
efforts and actions of senior executives in implementing and executing the strategy.
B. provide guidance and counsel to the CEO in carrying out his/her duties as chief
strategist and chief strategy implementer.
C. oversee the company’s strategic direction, evaluate the caliber of senior executives’
skills, handle executive compensation, and oversee financial reporting practices.
D. work closely with the CEO, senior executives, and the strategic planning staff to
develop a strategic plan for the company and then oversee how well the CEO and senior
executives carry out the board’s directives in implementing and executing the strategic
plan.
E. review and approve the company’s business model and also review and approve the
proposals and recommendations of the CEO as to how to execute the business model.
Answer:
When a company uses outsourcing to zero in on even better performance of those truly
strategy-critical activities where its expertise is most needed, then it may also be able
to:
A. create a values-based corporate culture that excels in product innovation.
B. decrease internal bureaucracies, flatten its organizational structure, and shorten the
time it takes to respond to changing market conditions.
C. devote more resources to its social responsibility strategy, better empower
employees, and reduce employee turnover.
D. better police compliance with ethical standards, lower overall operating costs, and
create two or more distinctive competencies.
E. reduce the potential for information overload and improve the quality of decision
making in each domain.
Answer:
Which of the following is NOT a typical reason that many outsourcing alliances prove
unstable or break apart?
A. Anticipated gains may fail to materialize due to an overly optimistic view of the
synergies.
B. Anticipated gains may fail to materialize due to a poor fit in terms of the
combination of resources and capabilities.
C. A partner can gain access to a company’s proprietary knowledge base, technologies,
or trade secrets.
D. The partners may disagree over how to divide the profits gained from joint
collaboration.
E. There is a risk of becoming dependent on other companies.
Answer:
A company’s overall strategy:
A. determines whether its strategic intent is proactive or reactive.
B. is subject to being changed much less frequently than either its objectives or its
mission statement and thus serves as the base of its strategy-making pyramid.
C. should be based on a flexible strategic vision and strategic intent.
D. is customarily reviewed and approved level-by-level by the company board of
directors.
E. is really a collection of strategic initiatives and actions devised by managers and key
employees up and down the whole organizational hierarchy.
Answer:
Approaches to enhancing differentiation through changes in the value chain do NOT
include:
A. coordinating with retailers to enhance the buying experience and building a
company’s image.
B. coordinating with suppliers to speed up new product development cycles.
C. coordinating with distributors or shippers to lower shipping costs.
D. collaborating with suppliers to improve many dimensions affecting product features
and quality.
E. coordinating with employees to create a greater incentive systems to encourage
worker productivity
Answer:
The managing director of a paper products company, wanted to introduce nonmonetary
incentives to enhance employee motivation and spur strategy execution. When
presented with some ideas, he chose all of the following EXCEPT:
A. rewarding employees even for subpar performance.
B. giving awards and public recognition to high performers and showcasing company
successes.
C. providing a comfortable and attractive working environment.
D. providing opportunities for promotion from within wherever possible.
E. providing attractive perks and fringe benefits.
Answer:
Dispersing particular value chain activities across many countries rather than
concentrating them in a select few countries can be more advantageous, EXCEPT
when:
A. buyer-related activities (such as sales, advertising, after-sale service and technical
assistance) need to take place close to buyers.
B. buyers demand short delivery times and/or high transportation costs make it
uneconomical to operate from one or just a few locations.
C. it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and
adverse political developments.
D. there are diseconomies of scale in trying to operate from a single location.
E. there are reasons to decouple buyer-related activities in favor of locational
advantages.
Answer:
Which of the following is NOT a sound guideline for designing a reward and incentive
system that helps promote good strategy execution?
A. The reward system must be administered with scrupulous objectivity and fairness.
B. The payoff for meeting or beating performance targets must be a major, not minor,
piece of the total compensation package.
C. The incentive plan should extend to all managers and all employees, not just top
management.
D. The reward system must reward nonperformers who, despite expending tremendous
effort, have not fared well in achieving the benchmarks under the incentive system.
E. Make sure that the performance targets each individual or team is expected to
achieve involve outcomes that the individual or team can personally affect.
Answer:
Determining how strong the threat of substitutes will be entails:
A. identifying the relative price/performance relationship of the substitutes, the
switching costs, and the overall buyer demand for the substitute.
B. identifying the attractiveness of other industries.
C. measuring Coke as a substitute for Pepsi and applying dynamic simulation modeling
techniques.
D. adopting a substitute product concentration factor to the buyer volume.
E. judging whether industry members are capable of self-manufacturing their products.
Answer:
Masterful strategies come from:
A. successful managerial efforts to develop a sound strategic vision.
B. doing a very thorough job of strategic planning.
C. involving as many company personnel as possible in the strategy-making process.
D. crafting a strategy that mimics the best parts of the strategies of the industry leaders.
E. doing things differently from competitors where it counts rather than running with
the herd.
Answer:
What is the best technique for revealing the different market or competitive position
that rival firms occupy in the industry?
A. Strategic group mapping
B. PESTEL analysis
C. Five forces framework
D. The value net framework
E. Competitor analysis
Answer:
When management is leading the drive for good strategy execution and operating
excellence, it calls for all of the following actions on their part EXCEPT:
A. staying on top of what is happening.
B. monitoring progress closely.
C. putting constructive pressure on the organization to execute the strategy with
excellence.
D. establishing a must-be-invented-here mindset.
E. empowering rank-and-file employees to act on their own initiative.
Answer:
Outsourcing value chain activities has such strategy executing advantages as:
A. less internal bureaucracy, speedier decision making, and quicker responses to
changing market conditions.
B. facilitating the empowerment of employees (because there are fewer things to do
internally).
C. promoting a total quality management culture.
D. reducing the need to establish a strongly implanted corporate culture.
E. reducing the strategic importance of building valuable core competencies.
Answer:
A company’s strategy in toto that tends to be a combination of proactive and reactive
elements is known as its:
A. realized strategy.
B. emergent strategy.
C. deliberate strategy
D. visionary strategy.
E. abandoned strategy.
Answer:
Which of the following is NOT something that can be gleaned from a company’s
SWOT?
A. How to improve a company’s strategy by using company strengths and capabilities
as cornerstones for its strategy
B. Which market opportunities are best suited to a company’s strengths and capabilities
C. Which resource weaknesses and deficiencies need to be corrected so as to better
enable the pursuit of important market opportunities and to better defend against certain
external threats
D. How to turn a core competence into a distinctive competence
E. Whether any of the company’s resource strengths can be used to help lessen the
impact of external threats
Answer:
The two biggest drawbacks or disadvantages of unrelated diversification are:
A. underemphasizing the importance of resource fit and the strong likelihood of
diversifying into businesses that top management does not know all that much about.
B. insufficient cash flows to finance so many different lines of business and a lack of
uniformity among the strategies of the businesses it has diversified into.
C. volatile sales and profits and making the mistake of diversifying into too many cash
cow businesses.
D. the difficulties of competently managing many different businesses and being
without the added source of competitive advantage that cross-business strategic fit
provides.
E. over-investing in the achievement of economies of scope and the difficulties of
achieving a good mix of cash cow and cash hog businesses.
Answer:
Which of the following is NOT a good example of a company’s resources?
A. More intellectual capital and better e-commerce capabilities than rivals
B. Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance
product quality and performance
C. Having higher earnings per share and a higher stock price than key rivals
D. A well-known brand name and enjoying the confidence of customers
E. A lower-cost value chain than rivals
Answer:
The nine-cell attractiveness”strength matrix provides clear, strong logic for considering
using:
A. only industry attractiveness in allocating resources and investment capital to its
different businesses.
B. only business strength in allocating resources and investment capital to the different
businesses.
C. both industry attractiveness and business strength in allocating resources and
investment capital to its different businesses.
D. both industry attractiveness and product strength in allocating resources and
investment capital to its different businesses.
E. both resource fit and product strength in allocating resources and investment capital
to its different businesses.
Answer:
Under what circumstances might a diversified firm choose to divest one of its
businesses?
Answer:
Explain why a company desirous of competing in foreign markets needs to pay careful
attention to where it locates it value chain activities.
Answer:
Identify and briefly discuss the three facets of building an organization capable of
proficient strategy execution.
Answer:
Why does an organization need both financial and strategic objectives?
Answer:
Identify and briefly describe five common barriers to entering an industry.
Answer:
What is the role and responsibility of a company’s CEO in the strategy-making,
strategy-executing process?
Answer:
What is meant by the term “best practices”? Why does it matter whether a company
utilizes “best practices” in performing the activities comprising its value chain?
Answer:
What are the pros and cons of using strategic alliances to try to enhance a company’s
ability to compete in foreign markets?
Answer:
A well-establisher retail house offers lower-priced commodities to powerful buyers at
widespread locations and has loyal suppliers that supply mass goods to the retailer.
With fewer ways to achieve differentiation in the market, most other rivals offer similar
products but lack sufficient funding to compete against the retail house. Which strategy
has the house employed? Explain your answer.
Answer:
After a company’s corporate culture is established, what are four approaches that can be
used to perpetuate the culture?
Answer:
Identify and explain four actions that top executives can take that are key elements in
directing organizational action and building capabilities behind the drive for good
strategy execution to meet or beat performance targets.
Answer:
Identify and briefly explain any three factors that lead to weak bargaining power on the
part of buyers.
Answer:
What are the four tests that should be used to measure the competitive power of a
company’s resource strengths?
Answer:
Identify and briefly discuss each of the three tests for determining whether
diversification into a new business is likely to build shareholder value.
Answer:
What are the distinctive features of a focused differentiation strategy? How is it
different from a broad differentiation strategy?
Answer:
Identify five factors that tend to weaken the intensity of competitive rivalry among an
industry’s member firms.
Answer:
What does the industry attractiveness test involve in evaluating a diversified company’s
business lineup? Why is it relevant?
Answer: