Which of the following is true of a company’s business model?
A. It zeroes in on the customer value proposition and its related profit formula.
B. It explains why the customer value proposition takes precedence over the related
profit formula to generate optimum revenues.
C. It details the ethical and socially responsible nature of the company’s strategy.
D. It explains how it intends to achieve the same market position as a rival.
E. It is termed a winning model if it passes any one of the three strategy tests.
Answer:
The “triple bottom line” refers to what three performance metrics a company should
simultaneously succeed in?
A. Economic, social, and environmental
B. Pay, power, and performance
C. Planning, execution, and results
D. Legal, social, and economical
E. Legal, social, and environmental
Answer:
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
Answer:
Which of the following is NOT a particularly sound or valid reason why a company’s
strategy should be ethical?
A. An unethical strategy reflects badly on the character of the company personnel
involved.
B. Senior executives fear public embarrassment if caught doing something perceived as
unethical.
C. An ethical strategy is in the self-interest of shareholders, partly because an unethical
strategy can damage a company’s reputation and partly because unethical behavior can
be very costly in terms of fines and penalties.
D. Customers shun companies known for their shady behavior and ethically upstanding
company personnel are repulsed by a work environment where unethical behavior is
condoned.
E. A strategy that is unethical in whole or in part is morally wrong.
Answer:
Which one of the following is NOT one of the five basic tasks of the strategy-making,
strategy-executing process?
A. Developing a strategic vision of where the company needs to head and what its
future business makeup will be
B. Setting objectives to convert the strategic vision into specific strategic and financial
performance outcomes for the company to achieve
C. Crafting a strategy to achieve the objectives and get the company where it wants to
go
D. Developing a profitable business model
E. Executing the chosen strategy efficiently and effectively
Answer:
Competing in the markets of foreign countries generally does NOT involve which of
the following?
A. Country-to-country differences in consumer buying habits and buyer tastes and
preferences
B. Country-to-country variations in host government restrictions and requirements and
fluctuating exchange rates
C. Whether to customize the company’s offerings in each different country market or
whether to offer a mostly standardized product worldwide
D. In which countries to locate company operations for maximum locational advantage,
given country-to-country variations in wage rates, worker productivity, energy costs,
tax rates, and the like
E. Crafting a multidomestic strategy that works just as well in one country as in another
and that also has the appeal of turning the world market into a mostly homogeneous
market
Answer:
A company’s strategy consists of the action plan management is taking to:
A. stake out a unique market position and achieve superior profitability.
B. compete against rivals and establish a transitory competitive advantage.
C. concentrate on improving the existing product offering irrespective of the changing
and turbulent markets.
D. develop a more appealing business model than rivals.
E. identify its strategic vision, its strategic objectives, and its strategic intent.
Answer:
A primary reason for why mergers and acquisitions sometimes fail is due to the:
A. misinterpretation of the cultural differences, like employee disenchantment and low
morale, differences in management styles and operating procedures, and operations
integration decision mistakes.
B. execution of functional and integration activity, while sustaining and capitalizing on
the combined sources of revenue.
C. development of effective integration plans conducive to employee satisfaction.
D. advertising message detailing the merger announcement.
E. creation of management-employee programs in order to foster better communication.
Answer:
Identify and briefly describe the four most frequently used strategic approaches to
achieving a sustainable competitive advantage. Provide examples.
Answer:
While listening or categorizing company resources, what matters is that:
A. all tangible resources are categorized correctly.
B. important resources are reported against strategically subjective activities.
C. resources are prioritized in terms of value propositions.
D. strategically placed resources are manageable.
E. all the different types of resources are included in the inventory.
Answer:
The contention that since there are cross-country or cross-cultural differences in ethical
standards, it is appropriate to judge behavior as ethical/unethical in the light of local
customs and social mores should take precedence over a single set of ethical standards
or what may be applicable in a company’s home market:
A. defines what is meant by ethical relativism.
B. defines what is meant by ethical universalism.
C. is the foundation of a social contract.
D. is the basis for the theory of ethical variation.
E. is the guiding principle for religious and moral standards across countries and
cultures.
Answer:
Achieving a sure cost advantage over rivals entails:
A. concentrating on the primary activities portion of the value chain and outsourcing all
support activities.
B. being a first-mover in pursuing backward and forward integration and controlling as
much of the industry value chain as possible.
C. selling a mostly standard product and increasing the scale of operation.
D. minimizing R&D expenses and paying below-average wages and salaries to
conserve on labor costs.
E. producing a standard product, redesigning the product infrequently, and having
minimal advertising.
Answer:
Which of the following is NOT part of the moral case for why a company should
actively promote the betterment of society?
A. Every action a company takes can be interpreted as a statement of what it stands for.
B. Most business leaders can be expected to acknowledge that socially responsible
actions and environmental sustainability are important and that businesses have a duty
to be good corporate citizens.
C. In return for society granting a business a “license to operate” and not be
unreasonably restrained in its pursuit of a fair profit, a business is obligated to act as a
responsible citizen and do its fair share to promote the general welfare.
D. Acting in a socially responsible manner is in the best financial interest of
shareholders.
E. Every business has a duty to do what’s best for shareholders while operating
honorably, provide good working conditions to employees, and be a good
environmental steward.
Answer:
Which of the following is NOT one of the benefits of outsourcing value chain activities
presently performed in-house?
A. Streamlines company operations in ways that improve organizational flexibility and
cuts the time it takes to get new products into the marketplace
B. Allows a company to concentrate on its core business, leverage its key resources, and
do even better what it already does best
C. Helps the company assemble diverse kinds of expertise speedily and efficiently
D. Enables a company to gain better access to end users and better market visibility
E. Improves a company’s ability to innovate
Answer:
Having good competitive intelligence about rivals’ strategies and moves to improve
their situation is important because:
A. it identifies who the industry’s current market share leaders are.
B. it allows a company to anticipate what moves rivals are likely to make next and to
craft its own strategic moves with some confidence.
C. it helps identify which rival is in which strategic group.
D. it enables company managers to determine which rival has the worst strategy and
how to avoid making the same strategy mistakes.
E. it enables more accurate predictions about how long it will take a particular rival to
copy most of what the strategy leader is doing.
Answer:
Conditions that may make corporate restructuring strategies appealing include all of the
following EXCEPT:
A. ongoing declines in the market shares of one or more major business units that are
falling prey to more market-savvy competitors.
B. a business lineup that consists of too many slow-growth, declining, low-margin, or
competitively weak businesses.
C. an excessive debt burden with interest costs that eat deeply into profitability.
D. ill-chosen acquisitions that haven’t lived up to expectations.
E. a business lineup that consists of too many cash cow businesses.
Answer:
Backward vertical integration can produce a:
A. full integration when activities remain the domain of key suppliers.
B. tapered integration if the firm consolidates all activities in-house.
C. differentiation-based competitive advantage when activities enhance the
performance of the final product.
D. focused differentiation strategy when the market is broad and the product is a
commodity.
E. lower degree of flexibility in accommodating shifting buyer preferences.
Answer:
Which of the following is NOT one of the traits of core competencies and/or
competitive capabilities?
A. The key to leveraging core competencies into competitive advantage is concentrating
sufficient effort and talent on deepening and strengthening them so the firm achieves
dominating depth and gains the capability to outperform rivals by a meaningful margin.
B. Core competencies have to be tweaked and adjusted to keep them fresh and
responsive to changing customer needs and market conditions.
C. Core competencies typically are lodged in the combined efforts of different work
groups and departments.
D. Core competencies generally grow out of company efforts to master a
strategy-critical technology or to invent and patent a valuable technology.
E. Core competencies tend to emerge gradually rather than blossom quickly.
Answer:
What is the goal of signaling a challenger that strong retaliation is likely in the event of
an attack?
A. To alleviate their fears by committing to reduce the costs of value chain activities
B. To cause the challenger to begin the attack instead of waiting
C. To dissuade challengers from attacking or diverting them into using less threatening
options
D. To create collaborative relationships with challengers
E. To insulate other firms from adverse impacts resulting from the challenge
Answer:
The risks of a focused strategy based on either low-cost or differentiation include the:
A. chance that niche customers will bargain more aggressively for good deals than
customers in the overall marketplace.
B. potential for the preferences and needs of niche members to shift over time toward
product attributes desired by buyers in the mainstream portion of the market.
C. potential for the segment to be highly vulnerable to economic cycles.
D. potential for segment growth to race beyond the production or service capabilities of
incumbent firms.
E. potential for the segment to become too specialized for other multi-segmented rivals
to enter.
Answer:
The backbone of the process of identifying, studying, and implementing best practices
is:
A. business process reengineering
B. a corporate culture that has a core value of operating excellence
C. benchmarking
D. Six Sigma quality control techniques
E. the innovative application of TQM techniques
Answer:
The keys to maintaining a broad differentiation strategy are to:
A. stress constant innovation to stay ahead of imitative rivals and to concentrate on a
few differentiating features.
B. charge a premium price that more than covers the extra costs of differentiating
features and to convince customers to be brand loyal.
C. out-innovate and out-advertise rivals.
D. emphasize personalized customer service and to add as many differentiating features
as possible.
E. keep prices close to the average of all rivals and to spend heavily on new product
R&D.
Answer:
The three main areas in the value chain where significant differences in the costs of
competing firms can occur include:
A. age of plants and equipment, number of employees, and advertising costs.
B. operating-level activities, functional area activities, and line of business activities.
C. the nature and makeup of their own internal operations, the activities performed by
suppliers, and the activities performed by wholesale distribution and retailing allies.
D. human resource activities (particularly labor costs), vertical integration activities,
and strategic partnership activities.
E. variable cost activities, fixed cost activities, and administrative activities.
Answer:
In evaluating whether the industry and competitive environment presents sufficiently
attractive prospects for both competitive success and attractive profits usually does
NOT involve a consideration of which of the following factors?
A. The industry’s growth potential and whether competitive pressures will likely grow
stronger or weaker, and whether strong competitive forces are squeezing industry
profitability to subpar levels
B. Whether the company occupies a stronger market position than rivals
C. Whether the industry’s future profitability will be favorably or unfavorably affected
by the prevailing driving forces
D. The severity of the macro-environment problems confronting the industry
E. Whether the industry’s product is strongly or weakly differentiated
Answer:
The underlying criteria of a best-cost provider strategy usually is found in the ability of
a company to:
A. offer better goods at attractive prices.
B. create attributes that appeal specifically to niche members.
C. lower overall costs more than rivals in serving niche members.
D. offer buyers something attractively different from competitors’ offerings.
E. offer the best product at the industry’s lowest possible price.
Answer:
One of the important benefits of a well-conceived and well-stated strategic vision is to:
A. clearly delineate how the company’s business model will be implemented and
executed.
B. clearly communicate management’s aspirations for the company to stakeholders and
help steer the energies of company personnel in a common direction.
C. set forth the firm budgetary objectives in clear and fairly precise terms.
D. help create a “balanced scorecard” approach to objective-setting and not stretch the
company’s resources too thin across different products, technologies, and geographic
markets.
E. indicate what kind of sustainable competitive advantage the company will try to
create in the course of becoming the industry leader.
Answer:
The characteristics of a strong-culture company include all of the following EXCEPT:
A. deeply rooted values and operating approaches that “regulate” the conduct of a
company’s business and the climate of its workplace.
B. strong managerial commitment to display company values and principles in their
own actions and behavior.
C. dedicated efforts on the part of management to communicating values and business
principles to organization members and explaining how they relate to the company’s
business environment.
D. ingrained shared values and business principles guide management in making
decisions.
E. co-worker peer pressure to challenge cultural norms.
Answer:
Which of the following is NOT true of implementing a strategy?
A. It is critical to ensure strategy-supportive resources and capabilities are in place.
B. The level of personnel competence is irrelevant to proficient strategy execution.
C. It is important to assemble a strong management team.
D. Strengthening the firm’s core competencies is a top priority.
E. A poorly structured organization can lead to higher bureaucratic costs.
Answer:
In expanding into foreign markets, a company can strive to gain competitive advantage
(or offset domestic disadvantages) by:
A. building a state-of-the-art facility to fully capture scale economies via an export
strategy.
B. using export, licensing, or franchising strategies so as to minimize risk and capital
investment.
C. locating buyer-related activities in all countries where it sells its product.
D. dispersing its activities among various countries in a manner that lowers costs or else
helps achieve greater product differentiation and transferring competitively valuable
competencies and capabilities from its domestic operations to its operations in foreign
markets.
E. avoiding the use of strategies that entail coordinating its domestic strategic moves
with its strategic moves in the various foreign markets it enters.
Answer:
Low-cost leaders who have the lowest industry costs are likely to:
A. have out managed rivals in finding ways to perform value chain activities more
cost-effectively.
B. be considering exiting the current product market and use their competitive low-cost
strength to gain a competitive advantage in other product arenas.
C. be favorites to win the game of strategy in the long run.
D. understand that driving costs to the lowest possible level is the only way to sell
cheap products to consumers.
E. understand that they have lower bargaining power with suppliers than rivals who
employ a different strategy.
Answer: