Which of the following is NOT one of the ways that a company can achieve
cost-efficient management of its value chain activities?
A. Striving to ensure a corporate diversity policy is introduced with effective controls
B. Using the company’s strong bargaining power vis–vis suppliers or others in the
value chain
C. Being alert to the cost advantages of outsourcing or vertical integration
D. Striving to capture all available economies of scale
E. Motivating employees through incentives and company culture
Answer:
Which of the following factors is NOT a relevant consideration in determining the
strength of buyer bargaining power?
A. The relationship between the buyer market and seller market
B. The degree to which the seller is a manufacturer of goods and services in substantial
quantities
C. The degree to which buyers pose a credible threat to integrate backward into the
product market of sellers
D. The degree to which buyers are well-informed about a seller’s products, prices, and
costs
E. The degree to which industry goods are standardized and undifferentiated
Answer:
The principal managerial components of the strategy execution process include:
A. deciding how much to spend on employee training.
B. instituting policies and procedures that facilitate strategy execution and tying
rewards and incentives to the achievement of strategic and financial targets.
C. doing an effective job of empowering employees.
D. revamping the value chain in a manner calculated to maximize operating efficiency.
E. selecting a capable top management team.
Answer:
Total quality management (TQM) programs:
A. deal exclusively with procedures to achieve defect-free manufacturing and assembly.
B. nearly always contribute more to the achievement of operating excellence than either
business process reengineering or Six Sigma quality control techniques.
C. entail creating a corporate culture bent on continuously improving the performance
of every task and every value chain activity.
D. are considerably more effective in improving manufacturing and assembly activities
than they are in improving such value chain activities as R&D, human resources
management, supply chain management, information technology, sales, and marketing
and finance.
E. are generally considered the best tool for reengineering strategy-critical business
processes.
Answer:
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.
Answer:
Which of the following statements about recruiting and retaining capable employees is
FALSE?
A. The quality of an organization’s people is always an essential ingredient if critical
value chain activities are to be performed competently.
B. Recruiting and retaining capable employees is a particularly important
organization-building task in enterprises where superior intellectual capital is a key
resource and also a basis for competitive advantage.
C. Recruiting and retaining capable employees are usually much more important to
good strategy execution and the achievement of true operating excellence than is
assembling a capable top management team.
D. It is very difficult for a company to competently execute its strategy and achieve
operating excellence without a large band of capable employees who are actively
engaged in the process of making ongoing operating improvements.
E. In many industries, adding to a company’s talent base and building intellectual
capital is more important to good strategy execution than additional investments in
plants, equipment, and capital projects.
Answer:
Profit sanctuaries are found to differ by a company’s strategy, such that a(n):
A. domestic-only company has access to many profit sanctuary locations worldwide.
B. international competitor usually has a profit sanctuary in its home market and may
have other sanctuaries in countries where it has a strong position and market share.
C. globally competitive company generally has a profit sanctuary outside its home
market in countries where it is a market leader and enjoys a strong competitive position.
D. transnational company has profit sanctuaries in every country where it operates.
E. company competing in a few country markets has more profit sanctuaries.
Answer:
Which of the following is NOT particularly helpful in perpetuating a company’s
culture?
A. Word-of-mouth indoctrination of new members in the culture’s fundamentals
B. Frequent reiteration of core values by senior managers and group members
C. Visibly rewarding those who display cultural norms and penalizing those who don’t
D. Maintaining a consistent strategic vision and strategic intent over time
E. Telling and retelling of company legends and regular ceremonies honoring members
who display desired cultural behaviors
Answer:
The best reason for investing company resources in vertical integration (either forward
or backward) is to:
A. expand into foreign markets and/or control more of the industry value chain.
B. broaden the firm’s product line and/or avoid the need for outsourcing.
C. gain a first-mover advantage over rivals in revamping the industry value chain.
D. add materially to a company’s technological capabilities, strengthen the company’s
competitive position, and/or boost its profitability.
E. achieve product differentiation and/or lengthen the company’s value chain to include
more activities performed in-house and thereby gain a greater ability to reduce internal
operating costs.
Answer:
A company that has competitive assets that are central to its company strategy and
superior to those of rival firms creates a:
A. long-term derivative strategy.
B. cash flow feasibility analysis.
C. competitive advantage over other companies.
D. resource deployment strategic plan.
E. cost underestimation and benefit overestimation.
Answer:
Explain the relevance of the following as they relate to building shareholder value via
diversification:
a. the industry attractiveness test
b. the cost-of-entry test
c. the better-off test
Answer:
A big advantage of related diversification is that it:
A. offers ways for a firm to realize 1 + 1 = 3 benefits because the value chains of the
different businesses present competitively valuable cross-business relationships.
B. is less capital intensive and usually more profitable than unrelated diversification.
C. involves diversifying into industries having the same kinds of key success factors.
D. is less risky than either vertical integration or unrelated diversification due to lower
capital requirements.
E. passes the industry attractiveness test and thus offers the best route to 2 + 2 = 4
benefits.
Answer:
Adopting a set of “stretch” financial and “stretch” strategic objectives:
A. pushes the company to strive for lesser but adequate profitability levels, because the
stretch objectives are considered unattainable.
B. is a widely held method for creating a “scorecard” for monitoring company
performance.
C. helps convert the mission statement into meaningful company values.
D. challenges company personnel to execute the strategy with greater enthusiasm,
proficiency, and understanding.
E. is an effective tool for pushing the company to perform at its full potential and
deliver the best possible results.
Answer:
Every strategy needs:
A. a distinctive element that attracts customers and produces a competitive edge.
B. to include similar characteristics to rival company strategies.
C. to pursue conservative growth built on historical strengths.
D. to employ diverse and sundry operating practices for producing greater control over
sales growth targets.
E. to mimic the plans of the industry’s most successful companies.
Answer:
Which of the following factors is NOT a relevant consideration in judging whether
buyer bargaining power is relatively strong or relatively weak?
A. Whether certain customers offer sellers important market exposure or prestige
B. Whether customers are relatively well-informed about sellers’ products, prices, and
costs
C. Whether buyer needs and expectations are changing rapidly or slowly
D. Whether sellers’ products are highly differentiated, making it troublesome or costly
for buyers to switch to competing brands or to substitute products
E. Whether buyers pose a major threat to integrate backward into the product market of
sellers
Answer:
The moral case for why a company should actively promote the betterment of society
and act in a manner benefitting all its stakeholders:
A. is based on the principle of treating people fairly and with respect.
B. is based on the conviction that improving the well-being of society ranks higher in
priority and is certainly nobler than making a profit and serving the interests of
shareholders.
C. boils down to “it’s the right thing to do.”
D. rests on the principle that a business is duty bound to fulfill its social contract to
serve the interests of all stakeholders in a business enterprise.
E. is based on the principle that business activities lack real legitimacy and have few
socially redeeming qualities unless and until a company exerts a significant and sincere
effort to give something back to the community.
Answer:
Which of the following principal aspects should be included in managing the strategy
execution process?
A. Describing the strategic course that will help the company prepare for the future
B. Organizing the company along the lines of best practice
C. Surveying employees on how they think costs can be reduced and how employee
morale and job satisfaction can be improved
D. Exerting the external leadership needed to drive stabilization
E. Tying rewards and incentives directly to profit
Answer:
Multinational companies that forbid the payment of bribes and kickbacks in their codes
of ethical conduct and that are serious about enforcing this prohibition:
A. are generally advocates of the ethical relativism school of thought.
B. are misguided in their efforts because bribes and kickbacks are really no different
from tipping for service at restaurants as you pay for a service rendered.
C. face a particularly vexing problem of losing business to competitors that have no
scruplesan outcome that penalizes ethical companies and company personnel.
D. are out-of-step with business reality given that the preponderance of company
managers are immoral.
E. are in a distinct minority compared to companies that view the payment of bribes and
kickbacks as a legitimate or permissible practice.
Answer:
Troopline Inc., an online laptop retailer, sells laptops of similar range and features as
other online laptop retailers. Which of the value propositions would NOT benefit the
company?
A. Providing free delivery of purchased laptops
B. Allowing customers to pay through gift coupons
C. Updating the site with better high-resolution pictures of laptops
D. Providing mobile friendly version of the site and compatible apps for mobile users
E. Establishing a comparison feature tab that allows customers to compare offerings
from other online retailers
Answer:
In which one of the following instances is the training and retraining of employees
likely to make the LEAST important contribution to good strategy execution?
A. When a company shifts to a strategy requiring different skills, competitive
capabilities, managerial approaches, and operating methods
B. When an organization is striving to build skills-based competencies
C. When technical know-how is changing so rapidly that a company loses its ability to
compete unless its skilled people have cutting-edge knowledge and expertise
D. When the chosen strategy calls for a deeper technological capability or building and
using new capabilities
E. When the strategy execution effort is based on tried-and-true operating practices that
vary little from year to year
Answer:
What is the primary target market for a best cost-provider?
A. Value hunting buyers
B. Price-conscious buyers
C. Best-price driven buyers
D. Value-conscious buyers
E. Brand-conscious buyer
Answer:
Cultural demands to employ unethical means if circumstances become challenging can
prompt:
A. otherwise dishonorable people to behave ethically.
B. increased observance of ethical strategic actions.
C. a moral work climate.
D. clever ways to operate outside established policies to boost profits.
E. company authorization to observe what’s right.
Answer:
In mapping strategic groups:
A. one strategic variable and one financial variable should be used as axes for the map.
B. it is important for the variables used as axes to be highly correlated.
C. the best variables to use as axes for the map are those that identify the competitive
characteristics that delineate strategic approaches used in the industry.
D. it is important to use price as the variable for the vertical axis.
E. the primary objective is to determine which strategic groups are profitable and which
are not.
Answer:
Focusing carries several risks, one of which is the:
A. chance that niche customers will bargain more aggressively for good deals than
customers in the overall marketplace.
B. chance that competitors will find effective ways to match the focused firm’s
capabilities in serving the target market.
C. potential for the segment to be highly vulnerable to economic cycles.
D. potential for the segment to become too specialized for other multi-segmented rivals
to enter.
E. inability of a company to compete industry-wide.
Answer:
A company’s strategic options for remedying cost disadvantages in internally performed
value chain activities do NOT include:
A. revamping its value chain to eliminate or bypass some cost-producing activities
(particularly low value-added activities).
B. implementing the use of best practices, particularly for high-cost activities.
C. investing in productivity-enhancing, cost-saving technological improvements.
D. switching to activity-based costing.
E. outsourcing the performance of high-cost activities to vendors that can perform them
more cheaply.
Answer:
The three tests for judging whether a particular diversification move can create value
for shareholders are:
A. the attractiveness test, the profitability test, and the shareholder value test.
B. the strategic fit test, the competitive advantage test, and the return-on-investment
test.
C. the resource fit test, the profitability test, and the shareholder value test.
D. the attractiveness test, the cost-of-entry test, and the better-off test.
E. the shareholder value test, the cost-of-entry test, and the profitability test.
Answer:
Which of the following rivals make the best targets for an offensive attack?
A. Firms with weaknesses in areas where the challenger is strong
B. Companies that are financially strong and possess favorable competitive market
positioning
C. Large national firms with vast capabilities and intermittent trivial resource
deficiencies
D. Strong and financially secure market leaders
E. Small local and regional firms with unrestrained capabilities
Answer:
What sets focused (or market niche) strategies apart from low-cost leadership and broad
differentiation strategies is:
A. the extra attention paid to top-notch product performance and product quality.
B. their concentrated attention on serving the needs of buyers in a narrow piece of the
overall market.
C. greater opportunity for competitive advantage.
D. their suitability for market situations where most industry rivals have weakly
differentiated products.
E. their objective of delivering more value for the least money.
Answer:
Key “functional” strategies of a company include all of the following EXCEPT:
A. R&D, technology, and product design strategies.
B. production and information technology and supply chain management strategies.
C. human resource and finance strategies.
D. sales, marketing, and distribution strategies.
E. alliance and partnerships as well as merger and acquisition growth strategies.
Answer:
The options for allocating a diversified company’s financial resources include all of the
following EXCEPT:
A. making acquisitions to establish positions in new businesses or to complement
existing businesses.
B. investing in ways to strengthen or grow existing businesses.
C. funding long-range R&D ventures aimed at opening market opportunities in new or
existing businesses.
D. paying off existing debt and building cash reserves,.
E. .decreasing dividend payments and/or selling shares of stock.
Answer:
A European manufacturer that exports goods made at its European plants to the United
States:
A. is competitively disadvantaged when the euro declines in value against the U.S.
dollar.
B. is largely unaffected by fluctuating exchange rates between the euro and the U.S.
dollar. It would, however, be affected if its plants were in the U.S.
C. becomes more competitive in the U.S. market when the euro declines in value
against the U.S. dollar.
D. becomes more competitive in European markets when the euro declines in value
against the U.S. dollar.
E. has no interest in whether the euro grows stronger or weaker versus the U.S. dollar
unless its chief competitors are other companies located in countries whose currency is
also the euro.
Answer:
What can happen when international rivals compete against one another in
multiple-country markets?
A. It could create attractive industries that would have otherwise badly deteriorated.
B. It could produce a business lineup consisting of too many slow-growth, declining,
low-margin, or competitively weak businesses.
C. It could create a greater diversity in the types of value chain activities between each
business.
D. It could initiate a deterrence effect that encourages mutual restraint in taking
aggressive action against one another due to the fear of a retaliatory response that might
escalate the battle into a cross-border competitive war.
E. It could increase shareholder interests by concentrating corporate resources on
foreign business activities to contend for market leadership.
Answer:
A company with strong competition in a saturated market decides to wipe out all its
products and introduce a fresh line of products in reaction to its falling shares during
recession. Would this type of a reactive strategy revive its position? Why or why not?
Answer:
Once a company has diversified into a collection of related or unrelated businesses and
concludes that some strategy adjustments are needed, what are the four main strategic
paths it can employ to improve the performance of its overall business lineup?
Answer:
Identify and briefly explain any three of the factors that influence the bargaining
strength and leverage of suppliers.
Answer:
Strategic offensives should, as a general rule, be grounded in a company’s strategic
assets and employ a company’s strengths to attack rivals. Define and discuss the term
strategic assets and its significance in gaining a competitive advantage.
Answer:
What does a company racing for global market leadership need strategic alliances for?
Answer:
Good strategy + good strategy execution = good management. True or false? Justify and
explain your answer.
Answer:
What is the difference between Six Sigma DMAIC programs and Six Sigma DMADV
programs?
Answer:
Identify at least three factors that can aid companies in forming a successful strategic
alliance.
Answer:
What are the strengths and weaknesses of the beliefs and tenets underlying the school
of ethical relativism?
Answer:
Briefly identify the special features of competing in foreign markets.
Answer:
Explain how environmental sustainability strategies go about improving a company’s
“Triple-P” performancepeople, planet, and profit. Why is it important for
strategy-makers to find points of intersection between society and the company’s ability
to execute value chain activities or better serve customer needs?
Answer:
What is meant by integrated social contracts theory? What is its contribution to the
debate about ethical standards?
Answer:
What is the strategy-making value of identifying an industry’s key success factors?
Answer:
What are the strategic disadvantages of a backward vertical integration strategy?
Answer:
Explain the difference between a cash cow business and a cash hog business.
Answer: