A company resource weakness or competitive deficiency
A. represents a problem that needs to be turned into a strength because weaknesses
prevent a firm from being a winner in the marketplace.
B. causes the company to fall into a lower strategic group than it otherwise could
compete in.
C. prevents a company from having a distinctive competence.
D. usually stems from having a missing link or links in the industry value chain.
E. is something a company lacks or does poorly (in comparison to rivals) or a condition
that puts it at a disadvantage in the marketplace.
A focused differentiation strategy aims at securing competitive advantage
A. by providing niche members with a top-of-the-line product at a premium price.
B. by catering to buyers looking for an upscale product at an attractively low price.
C. with a product or service offering carefully designed to appeal to the unique
preferences and needs of a narrow, well-defined group of buyers.
D. by developing product attributes that no other company in the industry has.
E. by convincing affluent buyers that the company has a true world-class product.
In which one of the following market circumstances is a broad differentiation strategy
generally not well suited?
A. When buyer needs and preferences are diverse
B. When few rivals are pursuing a similar differentiation approach
C. When buyers are homogeneous in their needs and preferences and are generally
satisfied with standardized product
D. When there are many ways to differentiate the product or service and many buyers
perceive these differences as having value
E. When technological change is fast paced and competition revolves around rapidly
evolving product features
Well-conceived visions are
A. distinctive.
B. specific to a particular organization.
C. free of generic, feel-good statements.
D. not innocuous one-sentence statements.
E. All of these.
The external market opportunities that are most relevant to a company are the ones that
A. increase market share.
B. reinforce its overall business strategy.
C. match up well with the firm’s financial resources and competitive capabilities, offer
the best growth and profitability, and present the most potential for competitive
advantage.
D. correct its internal weaknesses and resource deficiencies.
E. help defend against the external threats to its well-being.
According to the school of ethical universalism,
A. concepts of what constitutes ethical behavior and unethical behavior are dictated by
subjectively provable moral principles but not by objectively provable moral principles.
B. concepts of right and wrong are universal within countries/societies but not across
countries or cultures.
C. concepts of what is ethical and what is unethical are universal and absolute, leaving
no room for deviation from country to country or circumstance to circumstance.
D. to the extent there is common moral agreement about right and wrong actions and
behaviors across multiple cultures and countries, there exists a set of universal ethical
standards to which all societies, all companies, and all individuals can be held
accountable.
E. all societies and countries are obligated to apply universally defined ethical
principles of right and wrong as set forth in the Global Code of Ethical Behavior
adopted by 150 nations of the world.
Which of the following are characteristics of an effectively worded strategic vision
statement?
A. Graphic, directional, and focused
B. Challenging, competitive, and ‘set in concrete”
C. Balanced, responsible, and rational
D. Realistic, customer-focused, and market-driven
E. Achievable, profitable, and ethical
A “think local, act local” multidomestic strategy works particularly well when
A. host governments enact regulations requiring that products sold locally meet strictly
defined manufacturing specifications or performance standards.
B. there are significant country-to-country differences in customer preferences and
buying habits.
C. diverse and complicated trade restrictions of host governments preclude the use of a
uniform strategy from country to country.
D. there are significant country-to-country differences in distribution channels and
marketing methods.
E. All of these.
Using domestic plants as a production base for exporting goods to selected foreign
country markets
A. can be an excellent initial strategy to pursue international sales.
B. can be a competitively successful strategy when a company is focusing on vacant
market niches in each foreign country.
C. works well when a firm does not have the financial resources to employ
cross-market subsidization.
D. is usually a weak strategy when competitors are pursuing multicountry strategies.
E. can be a powerful strategy because the company is not vulnerable to fluctuating
exchange rates.
A company that is at a disadvantage in the marketplace because it lacks competitively
valuable resources possessed by rivals
A. should consider divesting assets and making future investments in promising new
industries.
B. may be able to develop substitute resources that accomplish the same objective as
the competitively valuable resource possessed by rivals.
C. can still marshal competitive power in the marketplace by incorporating product or
service features desired by niche buyers.
D. is virtually blockaded from using offensive strategies and must rely on defensive
strategies.
E. should abandon strategy elements that have caused its weakness in the marketplace.
The task of stitching together a strategy
A. entails addressing a series of hows: how to grow the business, how to please
customers, how to outcompete rivals, how to respond to changing market conditions,
and how to achieve strategic and financial objectives.
B. is primarily an exercise in deciding which of several freshly emerging market
opportunities to pursue.
C. is mainly an exercise that should be dictated by what is comfortable to management
from a risk perspective and what is acceptable in terms of capital requirements.
D. requires trying to copy the strategies of industry leaders as closely as possible.
E. is mainly an exercise in good planning.
The disadvantages of a centralized organizational structure include
A. making the organization sluggish in responding to changing conditions.
B. a loss of top management control.
C. putting too much decision-making authority in the hands of lower-level company
personnel.
D. making it hard to fix accountability when things do not go well and putting the
organization at risk when bad decisions are made.
E. impeding cross-unit coordination and capture of strategic fits.
Retrenching to a narrower diversification base
A. is usually the most attractive long-run strategy for a broadly diversified company
confronted with recession, high interest rates, mounting competitive pressures in
several of its businesses, and sluggish growth.
B. is directed at improving long-term performance by building stronger positions in a
smaller number of core businesses.
C. is an attractive strategy option for revamping a diverse business lineup that lacks
strong cross-business financial fit.
D. is sometimes an attractive option for deepening a diversified company’s
technological expertise and supporting a faster rate of product innovation.
E. is a strategy best reserved for companies in poor financial shape.
Which of the following is not one of the five generic types of competitive strategy?
A. Focused low-cost provider strategy
B. Broad differentiation strategy
C. Overall low-cost provider strategy
D. Focused differentiation strategy
E. Market share dominator strategy
Which of the following are strategy options for entering foreign markets?
A. Maintaining a national (one-country) production base and exporting goods to foreign
markets.
B. Establishing a subsidiary in a foreign market.
C. Franchising and licensing strategies.
D. Forming strategic alliances or joint ventures with foreign partners.
E. All of these.
The market opportunities most relevant to a particular company are those that
A. offer the best growth and profitability.
B. provide a strong defense against threats to the company’s profitability.
C. hold the most potential for product innovation.
D. provide avenues for taking market share away from close rivals.
E. hold the most potential to reduce costs.
Six Sigma’s DMADV process of define, measure, analyze, design and verify is a
particularly good vehicle for
A. improving performance when there are small variations in how well an activity is
performed; if there are wide variations, then the Six Sigma DMVSI process has to be
used.
B. achieving 100% control over how a task is performed and eliminating 100% of the
variability in how a task is performed.
C. improving performance when there are wide variations in how well an activity is
performed.
D. developing new processes or products at Six Sigma quality levels.
E. improving customer satisfaction whereas Six Sigma DMADV is used to improve
manufacturing processes.
An industry’s key success factors
A. are a function of market share, entry barriers, economies of scale, degree of vertical
integration, and industry profitability.
B. vary according to whether an industry has high or low long-term attractiveness.
C. can be determined through identifying an industry’s dominant economic
characteristics, assessing the five competitive forces, considering the impacts of the
driving forces, comparing the market positions of industry members, and forecasting
the likely next moves of industry rivals.
D. can be determined from studying the “winning” strategies of the industry leaders and
ruling out as potential key success factors the strategy elements of those firms
considered to have “losing” strategies.
E. depend on the relative competitive strengths of the industry leaders and how
vulnerable they are to competitive attack.
The two most compelling reasons for a company to pursue vertical integration (either
forward or backward) are to
A. expand into foreign markets and/or control more of the industry value chain.
B. broaden the firm’s product line and/or avoid the need for outsourcing.
C. enable use of offensive strategies and/or gain a first-mover advantage over rivals in
revamping the industry value chain.
D. strengthen the company’s competitive position and/or boost its profitability.
E. achieve product differentiation and/or lengthen the company’s value chain to include
more activities performed in-house and thereby gain greater ability to reduce internal
operating costs.
Operating strategies concern
A. what the firm’s operating departments are doing to unify the company’s functional
and business strategies.
B. the specific plans for building competitive advantage in each major department and
operating unit.
C. the relatively narrow strategic initiatives and approaches for managing key operating
units within a business and for performing strategically significant operating tasks.
D. how best to carry out the company’s corporate strategy.
E. how best to implement and execute the company’s different business-level strategies.
Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical
A. vary enormously from religion to religion and country to country across the world.
B. are present in all societies, organizations, and individuals.
C. ultimately depend on the circumstancesnothing is really black or white when it
comes to ethical standards.
D. are governed mainly by the thinking and writings of religious clerics at the School of
Morally Correct Thinking and Behavior in Geneva, Switzerland.
E. ultimately depend on a person’s own values and beliefs.
The target market of a best-cost provider is
A. value-conscious buyers.
B. brand-conscious buyers.
C. price-sensitive buyers.
D. middle-income buyers.
E. young adults (in the 18-35 age group).
A company’s unethical behavior may result in the following except
A. buyers will shun the company.
B. the company will have difficulty recruiting and retaining talented employees.
C. the company risks damage to shareholders in the form of lost revenues, higher costs,
and lower profits and the company’s reputation will suffer.
D. the company will have to deal with the Sarbanes-Oxley Act of 2002, which requires
the company remove the tarnished employees.
E. All of these.
The primary roles/obligations of a company’s board of directors in the strategy-making,
strategy-executing process include
A. playing the lead role in forming the company’s strategy and then directly supervising
the efforts and actions of senior executives in implementing and executing the strategy.
B. providing guidance and counsel to the CEO in carrying out his/her duties as chief
strategist and chief strategy implementer.
C. overseeing the company’s financial accounting and reporting practices, evaluating
the caliber of senior executives’ strategy-making and strategy-executing skills, and
instituting a compensation plan that rewards top executives for results that serve
shareholder interests.
D. working closely with the CEO, senior executives, and the strategic planning staff to
develop a strategic plan for the company.
E. reviewing and approving the company’s business model and also reviewing and
approving the proposals and recommendations of the CEO as to how to execute the
business model.
A balanced scorecard for measuring company performance
A. entails putting equal emphasis on financial and strategic objectives.
B. entails striking a balance between financial objectives and strategic objectives.
C. balances the drive for profits with social responsibility obligations.
D. prevents the drive for achieving strategic objectives from overwhelming the pursuit
of financial objectives.
E. entails creating a set of financial objectives balanced among profitability measures
and liquidity measures.
Which of the following is not a component of evaluating a company’s competitive
strength and cost structure?
A. Evaluating how well the strategy is working
B. Scanning the environment to determine a company’s best and most profitable
customers
C. Assessing whether the company’s costs and prices are competitive
D. Evaluating whether the company is competitively stronger or weaker than key rivals
E. Pinpointing what strategic issues and problems merit front-burner management
attention
Whether buyer bargaining power poses a strong or weak source of competitive pressure
on industry members depends in part on
A. whether most buyers possess roughly equal or varying degrees of bargaining power.
B. how many buyers are engaged in collaborative partnerships with sellers.
C. whether entry barriers are high or low.
D. whether the overall quality of the items being furnished by industry members is
rising or falling.
E. whether buyer demand is strong or declining.
Good strategy execution
A. requires a team effort with managers with strategy-executing responsibility and
making all employees active participants in the execution process.
B. requires getting things done effectively and efficiently.
C. allows companywide performance measures to be met.
D. requires middle and lower-level managers to ensure strategy-critical activities are
successfully implemented.
E. All of these.
In which of the following circumstances is it not advantageous for a multinational
competitor to concentrate its activities in a limited number of locations in order to build
competitive advantage?
A. When the costs of performing certain value chain activities are significantly lower in
certain geographic locations than in others
B. When a company has competitively superior patented technology that it can license
to foreign partners
C. When there is a steep learning or experience curve associated with performing an
activity in a single location
D. When certain locations have superior resources, allow better coordination of related
activities, or offer other valuable advantages
E. When there are significant scale economies in performing the activity
Which of the following statements concerning the effects of fluctuating exchange rates
on companies competing in foreign markets is true?
A. Fluctuating exchange rates do not pose significant risks to a company’s
competitiveness in foreign markets.
B. The advantages of manufacturing goods in a particular country are largely unaffected
by fluctuating exchange rates.
C. Companies that are manufacturing goods in a particular country and are exporting
much of what they produce are disadvantaged when that country’s currency grows
weaker relative to the currencies of the countries that the goods are being exported to.
D. Companies that are manufacturing goods in a particular country and are exporting
much of what they produce are benefited when that country’s currency grows weaker
relative to the currencies of the countries that the goods are being exported to.
E. Domestic companies under pressure from lower-cost imports are hurt even more
when their government’s currency grows weaker in relation to the currencies of the
countries where the imported goods are being made.
Which of the following is not a potential benefit of strategic alliances or other
cooperative arrangements between foreign and domestic companies?
A. Gaining wider access to attractive country markets
B. Gaining better access to scale economies in production and/or marketing
C. Filling competitively important gaps in technical expertise and/or knowledge of local
markets
D. Safeguarding the company’s dependence, allowing for positive engagement once the
purpose has been served and ensuring products of important technical standardization
requirements are not developed
E. Sharing distribution facilities and dealer networks, thus mutually strengthening
access to buyers
The market size and market growth rates in the foreign market can be influenced
negatively by
A. population sizes, income levels and cultural influences, the current state of the
infrastructure and distribution and retail networks available.
B. the ability of management to tailor a strategy to take into consideration all the
country difference.
C. the large size of emerging markets such as China and India.
D. competitive rivalry that is only moderate in some countries.
E. All of these.
In a single-business company, the strategy-making hierarchy consists of
A. business strategy, divisional strategies, and departmental strategies.
B. business strategy, functional strategies, and operating strategies.
C. business strategy and operating strategy.
D. managerial strategy, business strategy, and divisional strategies.
E. corporate strategy, divisional strategies, and departmental strategies.
The difference between the concept of a company mission statement and the concept of
a strategic vision is that
A. a mission statement typically concerns a company’s present business scope (“who we
are and what we do”) whereas the principal concern of a strategic vision is with the
company’s future business scope (long term direction and future
product-customer-market-technology focus).
B. the mission is to make a profit, whereas a strategic vision concerns how to attract
customers.
C. a mission statement deals with what to accomplish on behalf of shareholders and a
strategic vision concerns what to accomplish on behalf of customers.
D. a mission concerns what to do to achieve short-run objectives and a strategic vision
concerns what to do to achieve long-run performance targets.
E. a mission statement deals with “where we are headed” whereas a strategic vision
provides the critical answer to “how will we get there.”
The primary activities included in the value chain include
A. supply chain management, operations, distribution, sales and marketing, and
customer service activities.
B. product R&D, technology and systems development.
C. human resource management.
D. general administration.
E. All of these.