When an industry member is a major customer of the supplier, and the relationship
(partnership) is unusually effective and mutually advantageous:
A. it is rare for such partnerships to have much competitive impact on those industry
members not having such partnerships.
B. one unfortunate outcome is that it tends to give the supply partners much enhanced
bargaining power in their dealings with these industry members.
C. there is a strong likelihood such partnerships will put increased competitive pressure
on those industry members who lack productive collaborative relationships with their
suppliers.
D. there is a high likelihood of such partnerships reducing competitive pressures on
ALL industry members, provided technological change in the suppliers’ business is
rapid and the item being supplied is a commodity.
E. the usual result is to reduce competitive pressures on all industry members, provided
the costs of the items furnished by supply chain partners amount to 50 percent or more
of total cost.
The competitive moves and business approaches a company’s management is using to
grow the business, stake out a market position, attract and please customers, compete
successfully, conduct operations, and achieve organizational objectives is referred to as
its:
A. strategy.
B. mission statement.
C. strategic intent.
D. cost-price framework.
E. market vision.
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.
Which of the following statements about a high-performance culture is NOT true?
A. Results-oriented, high-performance cultures are permeated with a spirit of
achievement and have a good track record in meeting or beating performance targets.
B. High-performance cultures often have a low regard for high ethical standards, a
strong preference for high-risk strategies, and a slow and methodical approach to
responding to changes in the marketplace.
C. The challenge in creating a high-performance culture is to inspire high loyalty and
dedication on the part of employees, such that they are both energized and preoccupied
with putting forth their very best efforts to do things right and be unusually productive.
D. In a high-performance culture, the clear and unyielding expectation is that all
company personnel, from senior executives to front-line employees, will display
high-performance behaviors and a passion for making the company successful.
E. In high-performance cultures, there’s a strong sense of involvement on the part of
company personnel and emphasis on individual initiative and creativity.
The single most visible factor that distinguishes successful culture-change efforts from
failed attempts is:
A. forceful management actions to empower employees to adopt new operating
practices.
B. competent leadership at the top.
C. de-layering the management hierarchy.
D. developing a new value statement that inspires company personnel to put forth their
best efforts to achieve performance targets.
E. convincing employees that top management is genuinely committed to high ethical
standards and the exercise of corporate social responsibility.
A strategic group:
A. consists of those industry members that are growing at about the same rate and have
similar product line breadth.
B. includes all rival firms having comparable profitability.
C. is a cluster of industry members with similar competitive approaches and market
positions in the market.
D. consists of those firms whose market shares are about the same size.E. is made up of
those firms having comparable profit margins.
Which of the following statements about Six Sigma quality programs is true?
A. While Six Sigma programs often improve the efficiency of numerous operating
processes, there is evidence that the approach can stifle innovative activities.
B. Six Sigma is a philosophy of managing a set of business practices that emphasizes
continuous improvement in all phases of operations and 100 percent accuracy in
performing tasks.
C. Six Sigma’s DMAIC process is a particularly good vehicle for improving
performance when there are only small variations in how well an activity is performed.
D. The focus of Six Sigma programs is on the development of new products or new
business processes but not on improving existing products or business processes.
E. Six Sigma is a system of statistical procedures for eliminating 92 percent of the
variability in how a task is performed.
Which of the following statements about adaptive corporate cultures is NOT true?
A. The hallmark of adaptive corporate cultures is willingness on the part of
organizational members to accept change and take on the challenge of introducing and
executing new strategies.
B. The standout cultural traits are a “can-do” spirit, pride in doing things right,
no-excuses accountability, and a pervasive results-oriented work climate where people
go the extra mile to meet or beat stretch objectives.
C. Company personnel share a feeling of confidence that the organization can deal with
whatever threats and opportunities come down the pike; they are receptive to risk
taking, experimentation, innovation, and changing strategies and practices.
D. Adaptive cultures are exceptionally well-suited to companies with fast-changing
strategies and market environments.
E. For an adaptive culture to remain intact over time, top management must orchestrate
organizational changes in a manner that (1) demonstrates genuine care for the
well-being of all key constituencies and (2) tries to satisfy all their legitimate interests
simultaneously.
A company needs performance targets or objectives:
A. to help guide managers in deciding what strategic path to take in the event that a
strategic inflection point is encountered.
B. because they give the company clear-cut strategic intent.
C. in order to unify the company’s strategic vision and business model.
D. for its operations as a whole and also for each of its separate businesses, product
lines, functional departments, and individual work units.
E. in order to prevent lower-level organizational units from establishing their own
objectives.
The bargaining leverage of suppliers is greater when:
A. the suppliers’ products/services account for a small percentage of industry members’
costs.
B. industry members incur low costs in switching their purchases from one supplier to
another.
C. industry members account for a big fraction of supplier’s sales.
D. there is extensive seller-supplier collaboration.
E. the supplier industry is composed of a large number of relatively small suppliers.
When it is difficult or impossible to out-strategize rivals (beat them with a superior
strategy), the other main avenue to competitive advantage is to:
A. do a better job of empowering employees and flattening the organization structure.
B. outcompete rivals with a stronger corporate culture.
C. out execute them (beat them by performing certain value chain activities in superior
fashion).
D. beat them with a healthy corporate culture based on such core values as high ethical
standards, a strong sense of corporate social responsibility, and genuine concern for
customer well-being.
E. institute a more motivating and cost-efficient compensation and reward system.
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.
The task of driving-forces analysis is to:
A. develop a comprehensive list of all the potential causes of changing industry
conditions.
B. predict which new driving forces will emerge next.
C. determine which of the five competitive forces is the biggest driver of industry
change.
D. identify the driving forces, assess whether their impact will make the industry more
or less attractive, and determine what strategy changes are needed to prepare for the
impacts of the driving forces.
E. learn what the industry key success factors are and how they might change in the
future.
Which of the following rivals make the best targets for an offensive attack?
A. Firms with weaknesses in areas where the challenger is strong
B. Companies that are financially strong and possess favorable competitive market
positioning
C. Large national firms with vast capabilities and intermittent trivial resource
deficiencies
D. Strong and financially secure market leaders
E. Small local and regional firms with unrestrained capabilities
Which of the following are characteristics of an effectively worded strategic vision
statement?
A. Balanced, responsible, and rational
B. Challenging, competitive, and ‘set in concrete”
C. Graphic, directional, and focused
D. Realistic, customer-focused, and market-driven
E. Achievable, profitable, and ethical
Explain why a company desirous of competing in foreign markets needs to pay careful
attention to where it locates it value chain activities.
Identify and briefly explain any three of the factors that influence the bargaining
strength and leverage of suppliers.
Identify and briefly describe five common barriers to entering an industry.
An automobile company with an established brand name uses a unique assembly line
method to reduce the final packaging and fitting procedures cost. It then sells the cars to
all customers at a reduced price. Which of the five generic strategies automobile
company using?
Identify the characteristics of an unhealthy culture and briefly describe three types of
unhealthy cultures that adversely impact the corporate climate and performance.