The best quantitative evidence of whether a company’s present strategy is working well
is:
A. whether the company has more competitive assets than it does competitive
liabilities.
B. whether the company is in the industry’s best strategic group.
C. the caliber of results the strategy is producing, specifically whether the company is
achieving its financial and strategic objectives and whether it is an above-average
industry performer.
D. whether the company has a shorter value chain than close rivals.
E. whether the company is in the Fortune 500.
Strategic intent refers to a situation where a company:
A. commits to using a particular business model to make money.
B. decides to adopt a particular strategy.
C. relentlessly pursues an ambitious strategic objective.
D. commits to pursuing balanced-scorecard objectives.
E. changes its long-term direction and decides to pursue a newly adopted strategic
vision.
Sometimes it makes sense for a company to go on the offensive to improve its market
position and business performance. The best offensives tend to incorporate the
following EXCEPT:
A. focusing relentlessly on building a competitive advantage.
B. applying resources where rivals are least able to defend themselves.
C. using a strategic offense to allow the company to leverage its weaknesses to
strengthen operating vulnerabilities.
D. employing the elements of surprise as opposed to doing what rivals expect and are
prepared for.
E. displaying a strong bias for swift, decisive, and overwhelming actions to overpower
rivals.
The essence of socially responsible business behavior is that a company:
A. should balance strategic actions to benefit shareholders against the duty to be a good
corporate citizen.
B. undertake actions that add value to shareholders.
C. respect societal expectations that shareholders should be rewarded for providing risk
capital.
D. should work toward shareholders’ expectations of maximum return.
E. should provide jobs to the local community rather than outsourcing them.
The competitive advantage opportunities that a global competitor can gain by
dispersing performance of its activities across many nations include all of the following,
EXCEPT:
A. being able to shift production from one country to another to take advantage of
exchange rate fluctuations, differing wage rates, differing energy costs, or differing
trade restrictions.
B. being in better position to choose where and how to challenge rivals.
C. shortening delivery times to customers by having geographically scattered
distribution facilities.
D. locating buyer-related activities (such as sales, advertising, after-sale service and
technical assistance) close to buyers.
E. centralizing value chain activities to foster just-in-time inventory activities.
When a company has a proficiency in performing a strategically and competitively
important value chain activity better than its rivals, it is said to have:
A. a company competence.
B. a core competence.
C. a distinctive competence.
D. a key value chain proficiency.
E. a competitive advantage over rivals.
The culture of a company can be a cost-efficient value chain activity because it can:
A. allow for safeguarding internalized operating benefits.
B. distinguish a company’s capacity integration efforts.
C. spur worker pride in productivity and continuous improvement.
D. foster quality technological enhancements.
E. increase a company’s bargaining power with suppliers.
The most powerful and widely used tool for diagnosing the principle competitive
pressures in a market is:
A. the five forces framework.
B. PESTEL.
C. the driving forces model.
D. strategic group mapping.
E. competitor analysis.
The two big drivers of outsourcing are:
A. an increased ability to cut R&D expenses and an increased ability to avoid the
problems of strategic alliances.
B. that outsiders can often perform certain activities better or more cheaply, and
outsourcing allows a firm to focus its entire energies on those activities that are at the
center of its expertise (its core competencies).
C. a desire to reduce the company’s investment in fixed assets and the need to narrow
the scope of the company’s in-house competencies and competitive capabilities.
D. the ability to avoid capital investments that accompany vertical integration and a
desire to reduce the company’s risk exposure to changing technology and/or changing
buyer preferences.
E. that a smaller in-house workforce and a low investment in intellectual capital will
produce cost savings.
In which of the following circumstances is a strategy to be the industry’s overall
low-cost provider NOT particularly well-matched to the market situation?
A. When the offerings of rival firms are essentially identical and readily available from
many eager sellers
B. When there are few ways to achieve differentiation that have value to buyers
C. When price competition among rival sellers is especially vigorous
D. When buyers have widely varying needs and special requirements, and the prices of
substitute products are relatively high
E. When the majority of industry sales are made to a few, large-volume buyers
The faster a company’s business environment is changing only makes it imperative for
strategy makers to:
A. pay attention to early warnings of future change and be willing to experiment to
establish a market position in the future.
B. stay abreast of the changes by developing a comprehensive knowledge management
system to monitor the environment.
C. establish controls to ensure the impact of any changes is monitored appropriately and
ensure the internal environment is maintained.
D. align their decision-making with organizational unit objectives.
E. develop financial objectives that reflect the implications of change and that meet the
internal environment’s functional focus.
General Electric has an up-or-out policy, where key personnel in underperforming units
are pressured to boost performance to acceptable levels and keep it there or risk being
replaced. What is this an example of?
A. Staffing the organization with managers and employees capable of executing the
strategy well
B. Developing the resources and organizational capabilities required for successful
strategy execution
C. Tying rewards and incentives directly to the achievement of strategic and financial
targets
D. Adopting best practices and business processes to drive continuous improvement in
strategy execution activities
E. Exercising the internal leadership needed to propel strategy implementation forward
What circumstances call for use of a multidomestic strategy for competing in
international markets?
What are the distinctive features of a focused low-cost strategy? How does it differ
from a low-cost leadership strategy?
Identify at least three indicators of whether a company’s present strategy is working
well.
What are the distinctive features of a broad differentiation strategy? Under what
circumstances is a broad differentiation strategy appealing?
What are the merits of strategic alliances and collaborative partnerships for companies
racing to seize opportunities in an industry of the future? Under what circumstances do
they make sense? How do they contribute to competitive advantage?