The diamond framework is NOT LIKELY to answer which of the following questions
about competing on an international basis?
A. Where will the foreign entrants come from?
B. Which countries have the weakest foreign rivals?
C. What are the attributes of a country’s business environment?
D. What location of value chain activities is most beneficial?
E. What are the disadvantages of allowing foreign competition?
Which of the following companies would have the LEAST bargaining power with its
suppliers?
A. A company that is involved in mass production of goods to cater its expanding
customer base
B. A company that actively caters to a broad price-sensitive customer base
C. A company that generates high quality product components from easily available raw
materials for a broad customer base
D. A company whose products are highly popular and easily available across most
supermarkets
E. A company that offers high-cost specialized products that could be used only by
customers of a certain age group
Which of the following is NOT an advantage of setting ‘stretch” objectives?
A. Helping to avoid mediocre results
B. Pushing company personnel to be more inventive and innovative
C. Helping clarify the company’s strategic vision and strategic intent
D. Helping a company be more focused and intentional in its actions
E. Spurring exceptional performance and helping build a firewall against contentment
with modest performance gains
A belief in ethical relativism leads to the conclusion that:
A. since ethical standards are subjective, it is perfectly appropriate for each company to
define and implement its own ethical principles of right and wrong as concerns the use
of underage labor and the payment of bribes and kickbacks.
B. ethical standards are determined objectively (rather than subjectively).
C. whether the use of underage labor and the payment of bribes/kickbacks should be
deemed ethical or unethical depends on the moral standards, values, and business norms
that prevail in particular cultures, societies, countries, or circumstances.
D. ethical standards are objective and universal-thus whether the use of underage labor
and the payment of bribes and kickbacks should be deemed ethical or unethical is
definitely not dependent on the moral standards, values, and business norms that prevail
in particular cultures, societies, countries, or circumstances.
E. standards of right and wrong are governed by what is legal in a given country-thus
whether the use of underage labor and the payment of bribes and kickbacks are ethical
or unethical is governed by local law.
Which of the following is NOT an action that a company should take to perform value
chain activities more cost-effectively?
A. Striving to capture all available economies of scale and taking advantage of
experience and learning-curve effects
B. Trying to operate facilities at full capacity
C. Adopting labor-saving operating methods
D. Improving supply chain efficiency
E. Over-differentiating so that product features exceed the needs of most buyers
Which of the following is NOT a key question that senior executives must ask
whenever a new strategic initiative is under review?
A. Would the potential outcome of the proposed action pose a risk of embarrassment?
B. Is what we are proposing to do fully compliant with our code of ethical conduct?
C. Is there anything in the proposed action that could be considered ethically
objectionable?
D. Is it apparent that this proposed action is in harmony with our core values?
E. Are any conflicts or concerns evident between the proposed action and our core
values?
Whether buyer-seller relationships in an industry represent a strong or weak source of
competitive pressure is a function of:
A. the speed with which general economic conditions and interest rates are changing.
B. the extent to which buyers can exercise enough bargaining power to influence the
conditions of sale in their favor and whether strategic partnerships between certain
industry members can adversely affect other industry members.
C. how many buyers purchase all of their requirements from a single seller versus how
many purchase from several sellers.
D. the number of buyers versus the number of sellers.
E. whether industry members are spending more or less on advertising.
Which of the following is a condition that makes an internal startup strategy appealing
over an acquisition?
A. When an internal startup is more costly.
B. When an internal startup affects the supply-demand balance by increasing production
capacity
C. When an internal startup is unable to gain distribution access advantages
D. When an internal startup has the necessary scale and resource strengths to compete
with rivals
E. When an internal startup lacks the experience in establishing new subsidiaries
Which of the following is most likely to be morally valid from the perspective of ethical
relativism?
A. Bribing a government official to allow you to transfer gambling winnings to a tax
haven
B. Performing genital mutilations on nonconsenting female teens
C. Employing as laborers children under the age of nine
D. Agreeing to a country’s policy of prohibiting the education of females
E. Bribing a government official in an underdeveloped country to obtain a permit to
build a hospital
Benchmarking involves:
A. comparing how different companies perform various value chain activities and then
making cross-company comparisons of the costs and effectiveness of these activities.
B. checking whether a company has achieved more of its financial and strategic
objectives over the past five years relative to the other firms it is in direct competition
with.
C. studying whether a company’s resource strengths are more/less powerful than the
resource strengths of rival companies.
D. studying how a company’s competitive capabilities stack up against the competitive
capabilities of selected companies known to have world-class competitive capabilities.
E. comparing the best practices in one industry against the best practices in another
industry.
Why does a U.S. company exporting wooden furniture manufactured in Malaysia to the
European Union benefit from the decline in the value of ringgit against the euro?
A. Because decline in the value of ringgit against euro raises the cost of furniture
manufactured in Malaysia, making it less competitive in European markets
B. Because decline in the value of ringgit against euro reduces the cost of furniture
manufactured in Malaysia, making it more competitive in European markets
C. Because decline in the value of ringgit against euro has no impact on the cost of
furniture manufactured in Malaysia, both in Malaysian or European markets
D. Because decline in the value of ringgit against euro makes European goods more
competitive as compared to Malaysian goods
E. Because decline in the value of ringgit against euro makes Malaysian goods less
competitive in the U.S. market
Good strategy combined with good strategy execution:
A. offers a surefire guarantee for avoiding periods of weak financial performance.
B. is the best sign that a company is a true industry leader.
C. is a more important management function than forming a strategic vision combined
with setting objectives.
D. is the clearest indicator of good management.
E. signals that a company has the best business model in a market.
A government oil company is having trouble with the private refineries and transporters
to whom it delegates important stages of production. It decides to become more active
along the entire supply chain from locating deposits to retailing the fuel to consumers.
Which of the following does it intend to achieve?
A. Outsourcing
B. Economies of scale
C. Increase inputs
D. Advanced production technology
E. Vertical integration
In which of the following circumstances are competitive pressures associated with the
bargaining power of buyers NOT relatively strong?
A. The supply of soccer balls increases during the World Cup season.
B. Consumers can easily compare different smartphones’ features over the Internet
before buying them.
C. Apple designs and manufactures its chip processors rather than buying them from
IBM.
D. Dairy products are usually standardized and therefore differentiated only by price.E.
Buyers tend to delay purchases of expensive goods, such as home entertainment
systems, until they are on sale.
Providing top-down guidance can aid the task of implementing strategy:
A. provided they promote greater use of and commitment to best practices and total
quality management.
B. because really effective internal policies and procedures are not easily duplicated by
other firms.
C. because astutely conceived policies or procedures can result in competitive
advantage.
D. by helping align the actions and behavior of company personnel with the
requirements for good strategy execution, placing limits on independent action, and
helping overcome resistance to change.E. by making it easier to impose tight budget
controls and avoid wasting scarce resources.
Relying on outsiders to perform certain value chain activities offers such strategic
advantages as:
A. ensuring more costly components or services.
B. improving the company’s inability to innovate by allying with “best-in-class”
suppliers.
C. reducing the company’s risk exposure to changing technology and/or changing buyer
preferences.
D. increasing the firm’s inability to assemble diverse kinds of expertise speedily and
efficiently.
E. reducing its information technology and operational costs so that organizational
flexibility is maintained.
Which of the following is NOT a good example of a company’s resources?
A. More intellectual capital and better e-commerce capabilities than rivals
B. Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance
product quality and performance
C. Having higher earnings per share and a higher stock price than key rivals
D. A well-known brand name and enjoying the confidence of customers
E. A lower-cost value chain than rivals
What is a primary drawback of a localized multidomestic strategy?
A. It hinders the use of cross-border coordination of a company’s activities and
increases a company’s vulnerability to adverse shifts in currency exchange rates.
B. It makes it very difficult to take into account significant country-to-country
differences in distribution channels and marketing methods.
C. It makes it difficult and costly to be responsive to country-to-country differences in
customer needs, buying habits, cultural traditions, and market conditions.
D. It hinders the transfer of a company’s competencies and resources across country
boundaries and hinders the pursuit of a single, uniform competitive advantage in all
country markets where a company operates.
E. It is unsuitable for competing in the markets of emerging countries and posing added
difficulty in modifying a company’s business model to compete on the basis of low
price.