Which of the following is NOT typically a trigger to an evolving strategy?
A. The need to keep strategy in step with changing circumstances, market conditions,
and changing customer needs and expectations
B. The proactive efforts of company managers to fine-tune and improve one or more
pieces of the strategy
C. The need to abandon some strategy features that are no longer working well
D. The need to respond to the newly initiated actions and competitive moves of rival
firms
E. The need to respond to short-term swings in the stock market
When high ethical principles are deeply ingrained in the corporate culture of a
company, culture can function as a powerful mechanism for all of the following
EXCEPT:
A. communicating ethical behavioral norms.
B. gaining employee buy-in to the company’s moral standards.
C. gaining employee buy-in to the company’s business principles.
D. gaining employee buy-in to the company’s corporate values.
E. boosting short-termism.
Which of the following is NOT one of the principal components of strategic
significance in the PESTEL analysis?
A. Political factors including the extent to which government intervenes in the economy
B. Economic conditions that include the general economic climate and specific factors
such as interest rates, inflation rate, and unemployment rate, as well as conditions in the
stock and bond markets that can affect consumer confidence
C. Sociocultural forces including societal values, attitudes, cultural factors, and
lifestyles that impact business
D. Technological factors that include the pace of change and technical developments
that have the potential for impacting society
E. Environmental forces that include the competitive structure, the degree of industry
fragmentation, and the mobility barriers that inhibit business
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.
When discussing “economies of scope,” it involves understanding that they:
A. stem from the cost-saving efficiencies of operating over a wider geographic area.
B. have to do with the cost-saving efficiencies of distributing a firm’s product through
many different distribution channels simultaneously.
C. stem from cost-saving strategic fits along the value chains of related businesses.
D. refer to the cost savings that flow from operating across all or most of an industry’s
value chain activities.
E. arise from the cost-saving efficiencies of having a wide product line and offering
customers a big selection of models and styles to choose from.
A company’s strategic options for remedying cost disadvantages in internally performed
value chain activities do NOT include:
A. revamping its value chain to eliminate or bypass some cost-producing activities
(particularly low value-added activities).
B. implementing the use of best practices, particularly for high-cost activities.
C. investing in productivity-enhancing, cost-saving technological improvements.
D. switching to activity-based costing.
E. outsourcing the performance of high-cost activities to vendors that can perform them
more cheaply.
Whatever strategic approach is adopted by a company to deliver value, it nearly always
requires:
A. that management undertake formal planning sessions with functional departments to
ensure productivity improvement.
B. the identification of strengths and weaknesses within the company.
C. matching corporate identity with the corporate culture in order to integrate effort and
build sales momentum.
D. performing value chain activities differently than rivals and building competitively
valuable resources and capabilities that rivals cannot readily match.
E. constant efforts to thwart entry of new rivals and their attempts to create
differentiated products with unit costs above price premium.
Any company that seeks competitive advantage by being a first-mover must ask several
hard questions prior to executing its strategy. Which question would it NOT ask?
A. Does market takeoff depend on the new development of complementary products?
B. Is a new infrastructure required before buyer demand can surge?
C. Will buyers encounter high switching costs to move?
D. Are there influential competitors in a position to delay or derail the efforts?
E. Did the company pour too many resources into getting ahead of the market
opportunity?
Which of the following is NOT a potential advantage of backward vertical integration?
A. Reduced vulnerability to powerful suppliers (who may be inclined to raise prices at
every opportunity)
B. Reduced risks of disruptions in obtaining crucial components or support services
C. Reduced costs
D. Reduced business risk because of controlling a bigger portion of the overall industry
value chain
E. Increase in a company’s differentiation capabilities and perhaps achieving a
differentiation-based competitive advantage
One of the steps of driving-forces analysis is to identify which:
A. strategy changes a company may need to make to prepare for the impacts of the
driving forces.
B. strategic group is the most powerful.
C. industry member is likely to become (or remain) the industry leader and why.
D. key success factors are most likely to help their company gain a competitive
advantage.E. of the five competitive forces will be the strongest driver of industry
change.
Which of the following companies is using cost drivers effectively to manage value
chain activities cost efficiently?
A. Company A orders large amounts of supplies and keeps them stocked till customer
demand rises to prevent falling behind schedule in meeting customer needs.
B. Company B uses just-in-time inventories and produces made-to-order products as
and when customer demand rises.
C. Company C collects customer requests first and starts processing them only after
reaching a certain number.
D. Company D routes all its supplies to a warehouse for storage and then transports
them to individual factories for processing.
E. Company E substitutes lower-cost inputs with high-quality, high-cost inputs to gain
customer attention and loyalty.
A “think local, act local” multidomestic type of strategy:
A. is very risky, given fluctuating exchange rates and the propensity of foreign
governments to impose tariffs on imported goods.
B. is usually defeated by a “think global, act global” type of strategy.
C. is more appealing when the country-to-country differences in buyer tastes, cultural
traditions, and market conditions are diverse.
D. is generally an inferior strategy when one or more foreign competitors are pursuing a
global low-cost strategy.
E. can defeat a global strategy if the “think local, act local” multicountry strategist
concentrates its efforts exclusively in those foreign markets which have superior
resources.
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.
The race among rivals for industry leadership is more likely to be a marathon rather
than a sprint when:
A. new industry or market segments are yet to be developed and create altogether new
consumer demand.
B. fast followers find it easy to leapfrog the pioneer with even better next-generation
products of their own.
C. the market depends on the development of complementary products or services that
are currently not available, buyers have high switching costs, and influential rivals are
in position to derail the efforts of a first-mover.
D. entry barriers are high, substitute products or services are readily available, and
buyers are prone to negotiate aggressively for better terms and lower prices.
E. there are nearly always big advantages to being a slow mover rather than an early
mover, especially in regards to avoiding the “mistakes” of first or early movers.
All firms are subject to offensive challenges from rivals. Which of the following is
NOT among the intent of the best defensive move?
A. Lower the risk of being attacked
B. Weaken the impact of any attack that occurs
C. Pressure challengers to aim their efforts at other rivals
D. Help protect a competitive advantage
E. Harm the firm’s competitive position
A big advantage of related diversification is that it:
A. offers ways for a firm to realize 1 + 1 = 3 benefits because the value chains of the
different businesses present competitively valuable cross-business relationships.
B. is less capital intensive and usually more profitable than unrelated diversification.
C. involves diversifying into industries having the same kinds of key success factors.
D. is less risky than either vertical integration or unrelated diversification due to lower
capital requirements.
E. passes the industry attractiveness test and thus offers the best route to 2 + 2 = 4
benefits.
What are the differences between the school of ethical universalism and the school of
ethical relativism?
Under what circumstances might an already diversified company choose to enter
additional businesses and broaden its diversification base?
A fashion magazine plans to cuts down on its fashion-related content and provides the
space for high-priced advertisements, but fails to convince giant fashion brands to
advertise in the magazine. What do we understand from this failure?
What is the difference between Six Sigma DMAIC programs and Six Sigma DMADV
programs?
Explain how exchange rate fluctuations pose a risk to manufacturing companies that
rely upon an export strategy to compete in foreign markets.
Identify and briefly discuss each of the three options for entering new businesses. What
are the driving choice parameters for entry into new businesses and which one is the
most popular in the sense of being used most frequently?
Assume a firm is at a cost disadvantage with rivals because its internal costs are higher
than rivals. Identify three strategic moves that it can make to restore cost parity.
What is the essence of the moral case for why a company should engage in socially
responsible actions and environmentally sustainable business practices?
Identify the five good reasons (actions) companies can choose in crafting social
responsibility initiatives, environmental sustainability, and a good corporate citizenship
strategy.
In conducting a SWOT analysis, is it enough to simply compile lists of the company’s
strengths, weaknesses, opportunities, and threats? Why or why not?