A focused differentiation strategy aims at securing competitive advantage by:
A. providing niche members with a top-of-the-line product at a premium price.
B. catering to buyers looking for an upscale product at an attractively low price.
C. offering a product carefully designed to appeal to the unique preferences and needs
of a narrow, well-defined group of buyers.
D. developing product attributes that no other company in the industry has.
E. convincing a narrow, well-defined group of buyers that the company has a truly
world-class product.
The primary difference between a company’s mission statement and the company’s
strategic vision is that:
A. a mission statement explains why it is essential to make a profit, whereas the
strategic vision explains how the company will be a moneymaker.
B. a mission statement typically concerns a company’s present business scope and
purpose, whereas a strategic vision sets forth “where we are going and why.”
C. a mission deals with how to please customers, whereas a strategic vision deals with
how to please shareholders.
D. a mission statement deals with “where we are headed,” whereas a strategic vision
provides the critical answer to “how will we get there?”
E. a mission statement addresses “how we are trying to make a profit today,” while a
strategic vision concerns “how will we make money in the markets of tomorrow?”
The place for management to begin in trying to change a problem culture is:
A. identifying facets of the present culture that are obstacles to executing the company’s
strategy and meeting performance targets.
B. spending heavily on programs to train employees in the ways and beliefs of the new
culture to be implanted.
C. visibly praising and rewarding people who exhibit traits and behaviors that
undermine the existing culture.
D. writing a new value statement and describing in highly motivating terms the kind of
culture that is needed.
E. instituting incentive compensation programs that generously reward employees for
adopting best practices.
Management’s handling of the strategy implementation/execution process can be
considered successful:
A. when the internal organization develops two or more core competencies in
performing value chain activities.
B. if and when the company meets or beats its performance targets and shows good
progress in achieving its strategic vision for the company.
C. if the company’s culture is strong and strategy-supportive.
D. if management is able to marshal adequate resources to put the strategy in place
within 6 to 12 months.
E. if managers and employees express strong support for the company’s strategy and
long-term direction.
The objective of a best-cost provider strategy is to:
A. deliver superior value to value-conscious buyers at a comparatively lower price than
rivals.
B. offer buyers the industry’s best-performing product at the best cost and best (lowest)
price in the industry.
C. attract buyers on the basis of having the industry’s overall best-performing product at
a price that is slightly below the industry-average price.
D. out-compete rivals using low-cost provider strategies.
E. translate its best-cost status into achieving the highest profit margins of any firm in
the industry.
Effectively communicating the strategic vision down the line to lower-level managers
and employees has the value of:
A. inspiring company personnel to unite behind managerial efforts to get the company
moving in the intended direction.
B. helping company personnel understand why “making a profit” is so important.
C. making it easier for top executives to set stretch objectives.
D. helping lower-level managers and employees better understand the company’s
business model.
E. helping the management in formulating a balanced scorecard.
In which of the following situations is employing a “think local, act local”
multidomestic strategy highly questionable?
A. When a company desires to transfer competencies and resources across country
boundaries and is striving to build a single, uniform competitive advantage worldwide
B. When there are significant country-to-country differences in customer preferences
and buying habits industry is characterized by big economies of scale and strong
experience curve effects
C. When the trade restrictions of host governments are diverse and complicated
D. When there are significant country-to-country differences in distribution channels
and marketing methods
E. When host governments enact regulations requiring that products sold locally meet
strictly defined manufacturing specifications or performance standards
Despite their obvious benefits, think-local, act-local strategies have three big
drawbacks:
1) They hinder transfer of a company’s capabilities, knowledge, and other resources
across country boundaries, since the company’s efforts are not integrated or coordinated
across country boundaries. This can make the company less innovative overall.
2) They raise production and distribution costs due to the greater variety of designs and
components, shorter production runs for each product version, and complications of
added inventory handling and distribution logistics.
3) They are not conducive to building a single, worldwide competitive advantage.
When a company’s competitive approach and product offering vary from country to
country, the nature and size of any resulting competitive edge also tends to vary. At the
most, multidomestic strategies are capable of producing a group of local competitive
advantages of varying types and degrees of strength.
Which of the following is NOT generally on a company’s menu of actions to consider in
crafting a strategy of social responsibility?
A. Actions to ensure that the company’s strategy is ethical and that ethical principles
will be observed in operating the business
B. Making charitable contributions, donating money and the time of company personnel
to community service endeavors, supporting various worthy organizational causes
C. Actions to look out exclusively for the best interests of its owners, the shareholders
D. Actions to protect or enhance the environment (apart from what is required by
governmental authorities)
E. Actions to create a work environment that enhances employee well-being and makes
the company a great place to work
The two best signs of good strategy execution are whether:
A. the company is challenging its current performance targets and whether value chain
activities are fully integrated within the strategic response criteria.
B. managers are personally leading the change process and whether they are meeting
deadlines set for budgetary requirements.
C. the company is meeting or beating its performance targets and whether it is
performing value chain activities in a manner that is conducive to companywide
operating excellence.
D. managers are fully behind the changes and whether the company’s value chain
managers are executing them diligently.
E. the company identifies what the organization must do and how to make the necessary
internal changes.
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.
A much-used and potent managerial tool for determining whether a company performs
particular functions or activities in a manner that represents “the best practice” when
both cost and effectiveness are taken into account is:
A. competitive strength analysis.
B. activity-based costing.
C. resource cost mapping.
D. SWOT analysis.
E. benchmarking.
The contentions that (1) many of the same standards of what’s ethical and what’s
unethical resonate with peoples of most societies regardless of local traditions and
cultural norms and (2) to the extent there is common moral agreement about right and
wrong actions, common ethical standards can be used to judge the conduct of personnel
at companies operating in a variety of country markets and cultural circumstances, are
defining beliefs of which of the following?
A. The school of ethical relativism but not the school of ethical universalism
B. The school of ethical universalism but not the school of ethical relativism
C. Integrative social contracts theory but not the school of ethical universalism
D. The school of ethical relativism and the school of ethical universalism
E. The school of ethical relativismbut not integrative social contracts theory
A company’s culture is NOT manifested in which of the following?
A. Its approaches to people management and problem-solving and in the “chemistry”
and “personality” that permeates the work environment
B. Its revered traditions and the stories that get told over and over to illustrate the
importance of certain values
C. Its acceptance of the peer pressures that exist to do things in particular ways and
conform to expected norms
D. Its approach to people management and its official policies, procedures, and
operating practices that paint the white lines for the behavior of company personnel
E. Its strategic vision, strategic intent, and strategy
Mergers and acquisitions are often driven by such strategic objectives as:
A. expanding a company’s geographic coverage or extending its business into new
product categories.
B. reducing the number of industry key success factors.
C. reducing the number of strategic groups in the industry.
D. facilitating a company’s shift from a low-cost leadership strategy to a focused
low-cost strategy.
E. lengthening a company’s value chain and thereby putting it in a better position to
deliver superior value to buyers.
Buyers are in position to exert strong bargaining power in dealing with sellers when:
A. their costs to switch to competing brands or to substitute products are relatively high.
B. a particular seller’s product delivers quality or performance that is very important to
the buyer and is not matched by other brands.
C. they buy the product infrequently or in small quantities and are not particularly
well-informed about sellers’ products, prices, and costs.
D. buyer demand is growing rapidly.
E. buyers are price-sensitive due to the product representing a significant fraction of
their purchases.
What are the distinctive features of high-performance corporate cultures?
Discuss in some detail the difference between a multidomestic strategy and a global
strategy. Give the pros and cons of each.
Give two examples of ‘symbolic” culture-changing actions and two examples of
‘substantive” culture-changing actions.
Identify and briefly explain any four of the factors that influence the strength or
intensity of competitive rivalry among an industry’s member firms.
Explain what is involved in building capabilities internally. What steps are required?
How much time does it take? How hard is it? Support your answer.
What is the difference between ethics and business ethics?
Identify and briefly discuss the three common approaches to building core
competencies and competitive capabilities.
Assume a firm is at a cost disadvantage with rivals because of higher supplier-related
costs than key rivals. Identify three strategic moves that it can make to restore cost
parity.
Identify and briefly discuss any three of the factors that influence the bargaining
strength and leverage of buyers.