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The competitive pressures from substitute products tend to be stronger when:
A. good substitutes are readily available.
B. there are fewer number of substitute products.
C. substitutes have lower performance features.
D. buyers incur high costs in switching to substitutes.
E. substitutes are priced above the market.
Answer:
Using domestic plants as a production base for exporting goods to selected foreign
country markets:
A. can be an excellent initial strategy to test the international waters and learn if
attractive market positions can be established in foreign markets.
B. can be a competitively successful strategy when a company is focusing on vacant
market niches in each foreign country and does not have to compete head-to-head
against strong host country competitors.
C. can be a powerful strategy since a company can maintain a one-country production
base allowing it to capitalize on company competencies and capabilities.
D. can be a weak strategy when competitors are pursuing multi-country strategies.
E. can be a powerful strategy because a company is not vulnerable to fluctuating
exchange rates.
Answer:
A focused low-cost strategy seeks to achieve competitive advantage by:
A. outmatching competitors in offering niche members an absolute rock-bottom price.
B. delivering more value for the lesser money than other competitors.
C. performing the primary value chain activities at a lower cost per unit than can the
industry's low-cost leaders.
D. dominating more market niches in the industry via a lower cost and a lower price
than any other rival.
E. serving buyers in a narrow piece of the total market (target market niche) at a lower
cost and lower price than rivals.
Answer:
A no-pressure/no-adverse-consequences work environment does not necessarily lead to:
A. superior strategy execution or operating excellence.
B. satisfactory outcomes because there is always a cadre of ambitious people who relish
the challenge.
C. workforce morale issues.
D. establishing more positive than negative motivational reward elements.
E. excessive shortfall in performance.
Answer:
An option for NOT remedying an internal cost disadvantage includes:
A. investing in productivity-enhancing, cost-saving technological improvements.
B. redesigning the product or some of its components to facilitate speedier and more
economical manufacture or assembly.
C. implementing the use of best practices throughout the company, particularly for
high-cost activities.
D. eliminating some cost-producing activities altogether by revamping the value chain.
E. performing activities in the same way as done earlier.
Answer:
The difference between a core competence and a distinctive competence is that:
A. a distinctive competence refers to a company's strongest resource or competitive
capability, whereas a core competence refers to a company's lowest-cost and most
efficiently executed value-chain activity.
B. a core competence usually resides in a company's base of intellectual capital,
whereas a distinctive competence stems from the superiority of a company's physical
and tangible assets.
C. a core competence is a competitively and strategically relevant activity that a firm
performs well compared to its other activities, whereas a distinctive competence is a
competitively relevant activity a firm performs well compared to other rival firms.
D. a core competence represents a resource strength, whereas a distinctive competence
is achieved by having more resource strengths than rival companies.
E. a core competence usually resides in a company's technology and physical assets,
whereas a distinctive competence usually resides in a company's know-how, expertise,
and intellectual capital.
Answer:
Perceived value and signaling value are often an important part of a successful
differentiation strategy because:
A. of the standardization of buyer needs and preferences.
B. buyers seldom will pay for value they don't perceive, no matter how real the value of
the differentiating extras may be.
C. buyer satisfaction cannot be achieved until a product's value is promoted through
clever ads.
D. differentiation is all about selling products to sophisticated buyers.
E. there are no other ways to differentiate a product.
Answer:
According to the school of ethical universalism:
A. concepts of what constitute 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 socially determined, leaving
room for variation 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 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 by a global body that formulates the Code of
Ethical Behavior for the world.
Answer:
Which of the following is NOT a factor in contributing to the emergence and
sustainability of a strong culture?
A. Continuity of leadership, small group size, stable group membership, geographic
concentration, and considerable organizational success
B. A founder or strong leader who establishes values, principles, and practices that are
consistent and sensible in light of customer needs, competitive conditions, and strategic
requirements
C. A sincere, long-standing company commitment to operating the business according
to established traditions, thereby creating an internal environment that supports decision
making and strategies based on cultural norms
D. Centralized decision making, strict enforcement of company policies, and a strong
commitment to being the market share leader
E. A genuine concern for the well-being of the organization's three biggest
constituenciescustomers, employees, and shareholders
Answer:
Striving to be socially responsible entails touching such bases as:
A. what actions to take to moderate workforce diversity and make the company a great
place to work.
B. whether to shrink charitable contributions and trim down the time commitment of
company personnel to community service endeavors to increase earnings.
C. what, if any, actions to take to protect or enhance the environment (beyond what is
legally required).
D. exerting conscious efforts to ensure that all elements of the company's strategy are
executed diligently.
E. prioritizing stock repurchases over dividends.
Answer:
Merger and acquisition strategies:
A. are nearly always superior alternatives to forming alliances or partnerships with
these same companies.
B. may offer considerable cost-saving opportunities and can also be beneficial in
helping a company try to invent a new industry.
C. are a particularly effective way of pursuing a blue-ocean strategy and an outsourcing
strategy.
D. seldom are superior alternatives to forming alliances with these same companies
because of the financial drain of using the company's cash resources to accomplish the
merger or acquisition.
E. are one of the best ways for helping a company strongly differentiate its product
offering and use a differentiation strategy to strengthen its market position.
Answer:
Which of the following exemplifies good strategy execution?
A. The policy document of Dominos ensures consistency in service behavior patterns
across outlets.
B. The policy document of Pizza Today allows for differences in product range and
quality across outlets.
C. The policy document of Boston Pizza leaves ample scope for each member of the
staff to act independently.
D. The policy document of Little Caesars discusses strategy but not the routines for
running the outlets.
E. The policy document of Pizza Inn is averse to standardization of the way activities
are performed.
Answer:
Which of the following is NOT characteristic of a compensation and reward system
designed to help drive successful strategy execution?
A. Tying incentives to performance outcomes directly linked to good strategy execution
and financial performance
B. Keeping the time between achieving the target performance outcome and the
payment of the reward as short as possible
C. Making sure that the performance targets that each individual or team is expected to
achieve involve outcomes that the individual or team can personally affect
D. Providing generous rewards for people who turn in outstanding performances
E. Offering rewards that amount to 3 percent of an employee's total compensation
Answer:
The basic strategy options for local companies in competing against global challengers
include:
A. best-cost provider and focused low-cost provider and low-cost leadership strategies.
B. export strategies, licensing strategies, and cross-border transfer strategies.
C. utilizing understanding of local customer needs and preferences to create customized
products or services, developing business models to exploit shortcoming in local
infrastructure, and using acquisitions and rapid growth to defend against
expansion-minded multinationals.
D. franchising strategies, multidomestic strategies keyed to product superiority, global
low-cost leadership strategies, and cross-border coordination strategies.
E. focused differentiation and broad differentiation strategies.
Answer:
Which of the following is NOT an analytical tool for revealing a company's
competitiveness and for helping to match the strategy to the company's own particular
circumstances?
A. Resource and capability analysis
B. SWOT
C. Value chain analysis
D. Best practice concept
E. Competitive strength analysis
Answer:
Which of the following can aid industries in identifying key success factors?
A. Global distribution capabilities
B. Crucial product attributes and service characteristics
C. Low distribution costs
D. Accurate filling of buyer orders
E. Short delivery time capability
Answer:
When are multiple subcultures MOST problematic?
A. When they are compatible with the overarching corporate culture and are supportive
of strategy-execution
B. When they don't clash and coordinating efforts to craft and execute strategy within
each subculture is relatively easy
C. When they foster teamwork and support a collaborative approach to strategy
execution
D. When they embrace conflicting business philosophies that are inconsistent with
superior strategy execution
E. When they guide management in coming up with consistent approaches to executing
company strategies
Answer:
Which of the following is part of strategy-supportive resources and capabilities?
A. Recruiting and retaining talented employees
B. Instituting organizational arrangements
C. Establishing lines of authority
D. Creating reporting relationships
E. Deciding how much authority to delegate
Answer:
The strategic impetus for forward vertical integration is to:
A. gain better access to end users and better market visibility.
B. achieve the same scale economies as wholesale distributors and/or retail dealers.
C. control price at the retail level.
D. bypass distributors and dealers and sell direct to consumers at the company's
website.
E. build a core competence in mass merchandising.
Answer:
Which of the following statements about cross-business strategic fit in a diversified
enterprise is NOT accurate?
A. Strategic fit between two businesses exists when the management know-how
accumulated in one business is transferable to the other.
B. Strategic fit exists when two businesses present opportunities to economize on
marketing, selling, and distribution costs.
C. Competitively valuable cross-business strategic fits are what enable related
diversification to produce a synergistic performance outcome.
D. Strategic fit is primarily a by-product of unrelated diversification and exists when
the value chain activities of unrelated businesses possess economies of scope and good
financial fit.
E. Strategic fit exists when a company can transfer its brand-name reputation to the
products of a newly acquired business and add to the competitive power of the new
business.
Answer:
The difference between a company's strategy and a company's business model is that:
A. a company's strategy is management's game plan for achieving strategic objectives
while its business model is management's game plan for achieving financial objectives.
B. the strategy concerns how to compete successfully and the business model concerns
how to operate efficiently.
C. a company's strategy is management's game plan for realizing the strategic vision,
whereas a company's business model is the game plan for accomplishing its corporate
responsibility goals.
D. strategy relates broadly to a company's competitive moves and business approaches
while its business model relates to whether the revenues flowing from the strategy are
sufficient to cover costs and realize a profit.
E. a company's strategy is solely concerned with how to please customers while its
business model is solely concerned with how to please shareholders.
Answer:
A dynamic capability is the:
A. ongoing capacity to modify existing resources and capabilities to create new ones.
B. improvement evaluation process for eliminating waste in the firm.
C. functional and operating resources management process.
D. ongoing capability to understand and establish a rival commitment to resource
alignment.
E. most compelling product or service a firm .
Answer:
Frequently, a significant part of a company's culture is captured in:
A. the company's strategic vision and strategic intent.
B. the stories that get told over and over again to illustrate the importance of certain
values and the depth of commitment that various company personnel have displayed.
C. how much stretch is built into the company's financial and strategic performance
targets.
D. the vigor and enthusiasm with which it engages in benchmarking and seeks out best
practices.
E. the company's track record in taking market share away from rivals.
Answer:
A European-based company that makes all of its goods at a plant in Brazil and then
exports the Brazilian-made goods to country markets in many different parts of the
world:
A. is competitively disadvantaged when the euro declines in value against the Brazilian
real.
B. is competitively disadvantaged when the Brazilian real declines in value against the
currencies of the countries to which the Brazilian-made goods are being exported.
C. becomes less competitive in foreign markets when the Brazilian real gains in value
against the currencies of the countries to which the Brazilian-made goods are being
exported.
D. is competitively advantaged when the euro appreciates in value against the Brazilian
real.
E. has no interest in whether the euro grows stronger or weaker versus the Brazilian real
unless its chief competitors are other companies located in countries whose currency is
also the euro.
Answer:
Which of the following questions is NOT something that company managers should
consider in choosing to pursue one strategic course or directional path versus another?
A. Are changing market and competitive conditions acting to enhance or weaken the
company's business outlook?
B. Is the company stretching its resources too thinly by trying to compete in too many
markets or segments, some of which are unprofitable?
C. Will our present business generate sufficient growth and profitability in the years
ahead to please shareholders?
D. What market opportunities should the company pursue and which ones should not be
pursued?
E. Do we have a better business model than key rivals?
Answer:
Checking the competitive advantage potential of cross-business strategic fits in a
diversified company involves evaluating the extent to which sister businesses present
opportunities:
A. to combine the performance of certain cross-business activities and thereby reduce
costs.
B. to transfer skills, technology, or intellectual capital from one business to another.
C. for the company's different businesses to share use of a well-respected brand name.
D. for sister businesses to collaborate in creating valuable new competitive capabilities.
E. to create a positive image in the industry irrespective of the financial performance of
its businesses.
Answer:
A multinational company enters a new geographical location, considered an emerging
market, with its established product line: laptops and tablets. Which of the following
would NOT serve as a good strategic move to enhance profits?
A. Creating a sales plan that aims to enhance initial sales and market share with low
prices based on high operational costs
B. Devising a marketing plan that aims at different customer segments with attractive
advertisements and offers on products
C. Implementing a diversification plan that aims at adding smartphones to the existing
line of products
D. Charting an acquisition plan that aims at acquiring small-scale companies looking
for funding and with a similar product lineup
E. Establishing a distribution plan that aims at setting up more supply outlets than any
other rivals in the location
Answer:
From a strategy-implementing/strategy-executing perspective, operating budget
allocations should:
A. primarily be based on the number of new strategic initiatives being implemented in
each operating department.
B. be based on the number of people employed in each of the divisions.
C. be strategy-driven and based on how much each organizational unit needs to carry
out its piece of the strategic plan efficiently and effectively.
D. be linked to the costs of performing value chain activities as determined by
benchmarking against best-in-industry competitors.
E. depend on how much stretch there is in each department's objectives and what
additional resources are needed to help reach these performance targets.
Answer:
The two biggest drawbacks or disadvantages of unrelated diversification are:
A. the difficulties of passing the cost-of-entry test and the ease with which top
managers can make the mistake of diversifying into businesses where competition is
too intense.
B. the difficulties of capturing financial fit and having insufficient financial resources to
spread business risk across many different lines of business.
C. the demanding managerial requirements and the limited competitive advantage
potential due to lack of cross-business strategic fit benefits.
D. ending up with too many cash hog businesses and too much diversity among the
competitive strategies of the businesses it has diversified into.
E. the difficulties of achieving economies of scope and conflicts/incompatibility among
the competitive strategies of the company's different businesses.
Answer:
While ultimate responsibility for implementing and executing strategy falls upon the
shoulders of senior executives:
A. top-level managers still have to rely on the active support and cooperation of middle
and lower-level managers in pushing needed changes in functional areas and operating
units.
B. the pivotal and most decisive strategy-implementing actions are carried out by
frontline supervisors who have the day-to-day responsibility of seeing that key activities
are done properly.
C. it is a company's employees who most determine whether the drive for good strategy
execution will succeed or fail.
D. the success or failure of the implementation/execution effort hinges chiefly on doing
an effective job of empowering employees to make day-to-day operating decisions that
support good strategy execution.
E. the success or failure of the implementation/execution effort hinges chiefly on a
company's reward system and whether its policies and procedures are
strategy-supportive.
Answer:
