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57) In the cut-flower industry, fresh flowers must be available to customers as soon as possible
after they have been harvested. On which of the following activities in the value chain does this
places a premium?
A) service
B) procurement
C) operations
D) outbound logistics
58) ________ activities are designed to inform potential customers about the products and
services the firm has available and entice them to purchase them.
A) Service
B) Operation
C) Marketing and sales
D) Procurement
59) Which of the following is a primary value chain activity?
A) technology development
B) human resource management
C) marketing and sales
D) firm infrastructure
60) Service activities are designed to ________.
A) inform potential customers about the products and services the firm has available
B) ensure that the product satisfies the customer after the purchase
C) move the product or service from the firm to the customers
D) transform inputs into the products and services of the firm
61) A firm's ________ consists of its planning, finance, accounting, legal, government relations,
and other activities supplied by its various primary activities.
A) marketing strategies
B) infrastructure
C) human resource management
D) procurement
62) Which of the following is the first step in managing the value chain?
A) analyze how suppliers, distributors, and other business partners fit into a value net
B) develop valuable capabilities and use them to provide products that are superior in value
C) determine where in the value chain there is potential to add the greatest value
D) use formulated strategies to earn above-average returns
63) A ________ is an interrelated set of activities that can deliver competitive advantage not
only in the short term but also in the long term.
A) core competence
B) corporate strategy
C) competitive advantage
D) strategic vision
64) SWOT analysis stands for ________.
A) strengths, weaknesses, opportunities, and tools
B) strengths, weaknesses, opportunities, and threats
C) strengths, weaknesses, organizations, and threats
D) strengths, weaknesses, organizations, and tools
65) What part of a SWOT analysis focuses on the internal environment?
A) strengths and weaknesses
B) weaknesses and threats
C) opportunities and threats
D) strengths and opportunities
66) What part of a SWOT analysis focuses on the external environment?
A) strengths and weaknesses
B) weaknesses and threats
C) opportunities and threats
D) strengths and opportunities
67) Refer to the scenario above. Which of the following, if true, would suggest that the company
should concentrate on its strengths?
A) The barriers to entry for this industry are low and the bargaining power of suppliers is
increasing.
B) The managers make sure that they get the best talent in the market, even if they have to pay a
high price for it.
C) With access to technology, the firm is able to produce some of the best ads in the market.
D) Employees have become complacent after a few successful campaigns, are highly
demotivated and lack creativity.
68) Which of the following, if true, would suggest that the company should concentrate on its
opportunities?
A) The managers make sure they get the best talent in the market, even if they have to pay a high
price for it.
B) Employees have become complacent after a few successful campaigns, are highly
demotivated, and lack creativity.
C) Despite innovative technology and the Internet, employees continue to use traditional
animation techniques to create ads.
D) The company has no competitors due to high entry barriers.
69) PetroJac is a premier provider of oil field consultancy services in Roswell, New Mexico. Its
consultants are experts on local conditions. Recent discoveries of metal deposits in its region
have spawned attractive new markets outside of the oil field, which PetroJac has been unable to
exploit. Global firms with cutting-edge technology have been attracted by the new markets. If
PetroJac conducts a SWOT analysis, what would be one of its weaknesses?
A) lack of access to cutting-edge technology
B) recent discoveries of metal deposits
C) detailed knowledge of local oil markets
D) entry of international companies into the market
70) ________ translate(s) the strategic intent and mission of the firm into concrete and
measurable goals.
A) Strategic alliance
B) Core competencies
C) Strategic objectives
D) Strategic planning
71) In the process of strategic management, the ________ strategy determines what business or
businesses the firm wishes to operate.
A) functional
B) business-level
C) corporate-level
D) unit-level
72) The ________ strategy determines how a firm will compete in each of these markets.
A) functional
B) corporate-level
C) unit-level
D) business-level
73) ________ strategies focus on the operations of each function and their contribution to help
the firm achieve a competitive advantage.
A) Competitive
B) Corporate-level
C) Unit-level
D) Business-level
74) Which of the following is true about cost leadership strategy?
A) In this strategy, firms seek to make their product or service different from those of
competitors.
B) The key to this strategy is to add value at a cost that produces a superior margin.
C) Firms using this strategy charge slightly higher than industry-average prices.
D) One of the ways of achieving cost leadership is by using special technology.
75) A manufacturer striving to be the lowest-cost producer of a product or service, while
charging slightly less than industry-average prices, is pursuing a(n) ________.
A) cost leadership strategy
B) differentiation strategy
C) integrated leadership strategy
D) multipoint competition strategy
76) SockUp is a company that manufactures socks of different sizes, types, and colors for men,
women, and children. The company aims at being the lowest-cost provider and charges slightly
lower than the market price. This is an example of ________.
A) multipoint competition strategy
B) integrated leadership strategy
C) differentiation strategy
D) cost leadership strategy
77) Which of the following typically helps achieve cost leadership?
A) investing in research and development
B) employing economies of scale
C) offering superior products and services
D) targeting a niche segment
78) Managers pursuing a ________ seek to make their product or service different from those of
competitors on dimensions valued by customers.
A) global strategy
B) differentiation strategy
C) cost leadership strategy
D) multipoint competition strategy
79) If a firm keeps its costs near the industry average and it can command a premium price, then
it can obtain ________.
A) average profits
B) unfair profits
C) fair-market profits
D) above-average profits
80) Which of the following, if true, provides the best explanation of why consumers are willing
to pay a premium price for Starbucks coffee?
A) Starbucks has lower costs than its competitors.
B) Starbucks has achieved economies of scale.
C) Starbucks has invested in the latest technology to increase production.
D) Starbucks differentiates itself through its product, service, and brand reputation.
81) Ferrari differentiates its products based on style and performance and targets a narrow
segment of customers. Ferrari is pursuing a(n) ________.
A) multipoint competition strategy
B) focused differentiation strategy
C) focused cost leadership strategy
D) integrated differentiation-cost leadership strategy
82) To succeed when pursuing a ________, there must be significant differences among the
firm's target customers or among geographical segments of its customers.
A) focus strategy
B) global strategy
C) leveraged strategy
D) competitive strategy
83) A customer segment is defined as a group of customers who ________.
A) place a similar value on product features
B) are the first to purchase innovative products
C) are found in the same geographical location
D) have homogeneous demographic characteristics
84) Campacola is a soda company that is seeking to enter the market by introducing an unusual
line of sodas that contain granules that pop in the mouth. It intends to sell these sodas at no
greater cost than normal sodas. What strategy is the company using in entering the soda market?
A) cost leadership strategy
B) multipoint differentiation strategy
C) focused differentiation strategy
D) integrated differentiation-cost leadership strategy
85) A ________ involves competing with firms across markets by using strengths in one market
to overcome weaknesses in another market.
A) global strategy
B) multicultural strategy
C) multipoint competition strategy
D) differentiation strategy
86) The "Seven S" approach developed by McKinsey Consulting ________.
A) helps managers develop appropriate strategic alliances
B) allows managers to acquire, train, and develop personnel
C) provides instant access to and immediate knowledge of new markets
D) is perhaps the most widely used strategy implementation framework
87) McKinsey discovered that performance declined when many of their clients implemented
new strategic plans because the strategies were ________.
A) not developed organically within the company
B) executed without sufficient studies of the competitive environment
C) implemented within old structures, cultures, skills, styles, and staff
D) not designed, recommended, and reviewed by McKinsey consultants
88) Rainbow Education is a company that decides to enter the commercial education market by
purchasing a small company that prepares students to take high-stakes tests. How is the company
choosing to enter this new market?
A) by acquisition
B) by organic growth
C) by strategic alliance
D) by leveraging core competencies
89) Companies perform ________ to reinforce efforts that have contributed to desired results and
to correct those that have not.
A) internal audits
B) SWOT analyses
C) benchmarking exercises
D) organizational performance evaluations
90) The final step in the strategic management process is ________.
A) performance
B) evaluation
C) internal analysis
D) monitor the outcome
91) What is the meaning of the term competitive advantage? Discuss the four required elements
for competitive advantage.
92) What is the purpose of a strategic vision?
93) What are the sociocultural forces in the general environment?
94) What are product and process technological changes?
95) Name the five industry and competitor forces that can significantly influence the
performance of organizations within an industry.
96) What is a value chain?
97) What is core competence?
98) What happens during a SWOT analysis?
99) Explain the cost leadership strategy.
100) Describe the differentiation strategy.
