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.
A company’s “macro-environment” refers to:
A. the industry and the competitive arena in which the company operates.
B. general economic conditions plus the factors driving change in the markets where a
company operates.
C. the strategically relevant factors outside a company’s industry boundaries-economic
conditions, political factors, sociocultural forces, technological factors, environmental
factors, and legal/regulatory conditions.
D. the competitive market environment that exists between a company and its
competitors.
E. the dominant economic features of a company’s industry.
Reengineering how a firm performs a business process:
A. is a tool for pulling the pieces of strategy-critical processes out of different
departments and unifying their performance in a single department or cross-functional
work group that is in charge of the whole process.
B. is the most frequently used tool of total quality management (TQM).
C. requires that a company have many strategic partnerships and alliances with
outsiders.
D. is typically cheaper and easier than using Six Sigma techniques to achieve the same
cost savings.
E. is usually a company’s most important “best practice” for achieving operating
excellence.
Domino’s Pizza has a well-known slogan: “We’ll deliver in 30 minutes or less, or it’s
free!” With it what has the pizza maker achieved?
A. Built a unique customer value proposition
B. Created a new delivery system
C. Given a sense of exclusivity to its customers
D. Coordinated with suppliers to better address customer needs
E. Emphasized human resource management activities
A potato chip manufacturer purchases a potato farm. Which of the following regarding
its strategy is true?
A. The manufacturer has effectively used vertical integration to increase its bargaining
position and reduce transaction costs.
B. The manufacturer has efficiently capitalized on the experience and learning-curve
effects within the company.
C. The manufacturer has enhanced utilization by allowing depreciation and other fixed
costs to be spread over a larger unit volume.
D. The manufacturer has sacrificed quality by using a lower-cost input.
E. The manufacturer has effectively reduced its operating costs by outsourcing its
activities.
To build a competitive advantage by out-managing rivals in performing value chain
activities, a company must:
A. position itself in the industry’s more favorably situated strategic group.
B. develop resource strengths that will enable it to pursue the industry’s most attractive
opportunities.
C. develop core competencies and maybe a distinctive competence that rivals don’t have
or can’t quite match and that are instrumental in helping it deliver attractive value to
customers.
D. outsource all of its value chain activities to world-class vendors and suppliers.
E. eliminate its resource weaknesses.
A computer chip manufacturing giant decides to outsource its operations to a new
geographical location with cheaper labor amidst ongoing labor strikes in a few of its
existing locations (due to proposed job cuts). This draws criticism in its new market and
affects its current market position and productivity. Which of the following would be an
appropriate reactive (emergent) strategy while moving forward?
A. Hiring and training new talent to begin operations in the emerging market
B. Acquiring a local computer chip marketing and distribution specialist firm in the new
location
C. Cancelling the idea of outsourcing and retaining the existing the workforce to run
operations
D. Shifting the existing workforce to the new geographical location and paying them
according to new standards
E. Cancelling the job cuts till the market situation and entry operations stabilize
A strongly implanted culture provides a huge assist in executing strategy because
company managers can use the traditions, beliefs, values, common bonds, or behavioral
norms:
A. as levers to mobilize commitment to executing the chosen strategy.
B. as reinforcement for convincing staff that the strategy is sound and molded in
tradition.
C. to ensure the staff will embrace the new strategy like they have in the past.
D. to manipulate jobholders into thinking traditions are important.
E. as disciplinary measures in making the employees perform better and achieve targets.
A company’s strategic vision describes:
A. “who we are and what we do.”
B. why the company does certain things in trying to please its customers.
C. management’s storyline of how it intends to make a profit with the chosen strategy.
D. management’s aspirations for the future and the company’s strategic course and
long-term direction.
E. what future actions the enterprise will likely undertake to outmaneuver rivals and
achieve a sustainable competitive advantage.
Which of the following is FALSE as it concerns the merits of why acting in a socially
responsible manner is good business?
A. The higher the public profile of a company or brand, the greater the scrutiny of its
activities and the higher the potential for it to become a target for pressure group action.
B. Acting in a socially responsible manner nearly always results in higher profits and a
higher stock price for shareholders.
C. To the extent that a company’s socially responsible behavior wins applause from
consumers and fortifies its reputation, a company may win additional patronage.
D. Some employees feel better about working for a company committed to improving
society-a condition that can contribute to lower turnover and better worker productivity.
E. Companies with deservedly good reputations for contributing time and money to the
betterment of society are better able to attract and retain employees compared to
companies with tarnished reputations.
A competitively valuable resource or capability is a company’s:
A. enabling foundation of its business model.
B. equally valuable substitute resource providing a competitive advantage.
C. assessment of the availability of superior substitutes.
D. unsurpassed worker productivity and product quality.
E. unique piecework incentive system, providing a competitive advantage.
Potential entrants are more likely to be deterred from actually entering an industry
when:
A. incumbent firms are willing and able to be aggressive in defending their market
positions against entry.
B. incumbent firms are complacent.
C. buyers are not particularly price-sensitive and the industry already contains a dozen
or more rivals.
D. the relative cost positions of incumbent firms are about the same, such that no one
incumbent has a meaningful cost advantage.E. buyer switching costs are moderately
low because of strong product differentiation among incumbent firms.
The rationale for making strategy-critical value chain activities the primary building
blocks in a company’s organizational scheme is based on the:
A. much shorter time it takes to build core competencies and competitive capabilities.
B. benefit such an organizational scheme has in reducing costs.
C. benefit such an organizational scheme has in improving the productivity of
geographically scattered organizational units.
D. thesis that if activities crucial to strategic success are to have the resources,
decision-making influence, and organizational impact, they have to be centerpieces in
the organizational scheme.E. benefit such an organizational scheme has in making the
empowerment of employees more effective.
A company that has greater success in managing its strategic alliance can credit all of
the following, EXCEPT:
A. establishing strong interpersonal relationships to facilitate communication.
B. incorporating contractual safeguards.
C. making opportunities for learning a routine management process.
D. establishing a system to manage alliances in a systematic fashion.
E. creating organizational learning barriers across boundaries.
A useful way to identify a company’s resources is to view them as:
A. divided into two main categories, tangible and intangible.
B. productive inputs or competitive assets, except human assets and intellectual capital,
which are considered capabilities or competencies.
C. physical resources, such as the company’s brand, image, and reputation assets.
D. an inventory or a collection of the firm’s strengths, weaknesses, opportunities, and
threats.
E. intangible resources such as patents, copyrights, and technological processes.
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.
The chief purpose of calculating quantitative industry attractiveness scores for each
industry a company has diversified into is to:
A. determine which industry is the biggest and fastest growing.
B. get in position to rank the industries from most competitive to least competitive.
C. provide a basis for drawing analysis-based conclusions about the attractiveness of
the industries a company has diversified into, both individually and as a group, and
further to provide an indication of which industries offer the best and worst long-term
prospects.
D. ascertain which industries have the easiest-to-achieve key success factors.
E. rank the attractiveness of the various industry value chains from best to worst.