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.
Which of the following rationales for pursuing unrelated diversification is likely to
increase shareholder value?
A. To reduce risk by way of spreading the company’s investments over a set of truly
diverse industries
B. To enable a company to achieve rapid or continuous growth
C. To chance that market downtrends in some of the company’s businesses will be
partially offset by cyclical upswings in its other businesses
D. To provide benefits to managers such as high compensation and reduced
unemployment risk
E. To restructure an underperforming business
Once established, company cultures can be perpetuated by:
A. relying on word-of-mouth indoctrination and the power of tradition to instill the
culture’s fundamentals, as well as frequent reiteration of core values by senior managers
and group members, and regular ceremonies honoring members who display desired
cultural behaviors.
B. avoiding frequent or dramatic reorganizations that could disturb existing
relationships and networking among departments and company personnel.
C. making adherence to cultural beliefs and cultural norms the defining features of the
company’s strategic vision.
D. rewarding departments that observe cultural norms with above-average budget
increases and penalizing those who don’t with budget cuts.
E. making cultural values and beliefs the centerpiece of the company’s competitive
strategy.
Which of the following is NOT an appropriate guideline for developing a strategic
group map for a given industry?
A. The variables chosen as axes for the map should indicate important differences
among rival approaches.
B. The variables chosen as axes for the map don’t have to be either quantitative or
continuous. They can be discrete variables.
C. The variables chosen as axes for the map should be highly correlated.
D. Several maps should be drawn if more than one pair of variables give different
exposures to the competitive positioning relationships present in the industry
structure.E. The sizes of the circles on the map should be drawn proportional to the
combined sales of the firms in each strategic group.
Which of the following would NOT lead to cost savings?
A. A company that sets up its own direct sales force
B. A company that eliminates low-value-added work steps
C. A company that motivates employees through incentives
D. A company that conducts sales operations at its website
E. A company that sources the best from suppliers across the world
Understanding where the company is competitive requires:
A. determining whether a company has a cost-effective value chain.
B. developing quantitative strength ratings for the company and key rivals on each
industry key success factor and each pivotal resource, capability, and value chain
activity.
C. identifying a company’s core competencies and distinctive competencies (if any).
D. analyzing whether a company is well positioned to gain market share and be the
industry’s profit leader.
E. developing quantitative measures of a company’s chances for future profitability.
What two factors inhibit the ability of rivals to imitate a firm’s most valuable resources
and capabilities?
A. Social ambiguity and causal uncertainty
B. Social simplicity and causal complexity
C. Collective complexity and causal ambiguity
D. Social complexity and causal ambiguity
E. Social simplicity and causal uncertainty
Social complexity and causal ambiguity are two factors that inhibit the ability of rivals
to imitate firm’s most valuable resources and capabilities.
Which of the following is something to look for in identifying a company’s culture?
A. The atmosphere, spirit and character that pervades the work climate and the values,
business principles, and ethical standards that management preaches and practices
B. The track record in meeting or beating its financial and strategic performance targets
C. The intensity and makeup of the company’s value chain
D. The strategic intent and competitive strategy inherent within the company’s efforts
for successful strategy execution
E. The resource strengths, core competencies, and competitive capabilities that
permeate the organization
Which of the following is generally NOT considered a barrier to entry?
A. Restrictive regulatory policies
B. High capital requirements
C. Strong brand preferences
D. Many industry patents in place
E. Weak “network effects” in customer demand
The reasons why a company opts to expand outside its home market include all of the
following EXCEPT:
A. gaining access to new customers for the company’s products/services.
B. spreading its business risk across a wider market base.
C. achieving lower costs through economies of scale, experience, and increased
purchasing power.
D. exploiting its core competencies and capabilities.
E. identifying resources and capabilities in the company’s home market.
The business case for why companies should act in a socially responsible manner
includes such reasons as:
A. it generates internal operating benefits (as concerns employee recruiting, workforce
retention, employee morale, and training costs).
B. it increases the risk of reputation-damaging incidents.
C. it is not in the best interest of shareholders.
D. it can lead to decreased buyer patronage.E. it can increase costs and reduce
employee retention.
The value of doing competitive strength assessment is to:
A. determine how competitively powerful the company’s core competencies are.
B. learn if the company’s market opportunities are better than those of its rivals.
C. learn whether a company has a distinctive competence.
D. learn how the company ranks relative to rivals on each of the important factors that
determine market success and ascertain whether the company has a net competitive
advantage or disadvantage vis–vis key rivals.
E. determine whether a company’s resource strengths are sufficient to allow it to earn
bigger profits than rivals.