The three components of building a capable organization are:
A. making periodic changes in the firm’s internal organization to keep people from
getting into a comfortable rut, instituting a decentralized approach to decision making,
and developing the appropriate competencies and capabilities.
B. hiring a capable top management team, empowering employees, and establishing a
strategy-supportive corporate culture.
C. putting a centralized decision-making structure in place, determining who should
have responsibility for each value chain activity, and aligning the corporate culture with
key policies, procedures, and operating practices.
D. staffing the organization, acquiring, developing, and strengthening key resources and
competitive capabilities, and structuring the organization and work effort.
E. optimizing the number of core competencies and competitive capabilities, making
sure that all managers and employees are empowered, and maximizing internal
operating efficiency.
Answer:
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
Answer:
The classic way to coordinate the work efforts of internal organization units is to:
A. establish a corporate culture where teamwork is a core value and decisions are made
by general consensus among team leaders in the affected work units.
B. have closely related activities report to a single executive who has the authority and
organizational clout to coordinate, integrate, and arrange for the cooperation of units
under their supervision.
C. have the heads of support activities report to the heads of primary, strategy-critical
activities.
D. establish monetary incentives that reward people for being cooperative team players.
E. have frequent meetings among the heads of closely related activities and work units
to establish mutually agreeable deadlines.
Answer:
Which one of the following is NOT an important aspect of evaluating the merits of a
diversified company’s strategy?
A. Assessing the competitive strength of each business the company has diversified into
B. Determining which business units are cash cows and which ones are cash hogs, and
then evaluating how soon the company’s cash hogs can be transformed into cash cows
C. Evaluating the strategic fits and resource fits among the various sister businesses
D. Assessing the attractiveness of the industries the company has diversified into, both
individually and as a group
E. Ranking the performance prospects of the businesses from best to worst and deciding
what priority to give each of the company’s business units in allocating resources
Answer:
As a rule, the collective impact of competitive pressures associated with the five
competitive forces:
A. determines the strength of the industry’s driving forces.
B. determines the extent of the competitive pressure on industry profitability.
C. means that fewer companies can achieve a competitive advantage via anything other
than being the industry’s low-cost leader.
D. means there will be a larger number of competitive advantage opportunities for
industry members.
E. means there will be a greater number of industry key success factors.
Answer:
While there are many routes to competitive advantage, the two biggest factors that
distinguish one competitive strategy from another are:
A. whether a company can build a brand name and an image that buyers trust.
B. whether a company’s target market is broad or narrow and whether the company is
pursuing a low cost or differentiation strategy.
C. whether a company can achieve lower costs than rivals and whether the company is
pursuing the industry’s sales and market share leader’s role.
D. whether a company can offer the lowest possible prices and whether the company
can get the best suppliers in the market.
E. whether a company’s overall costs are lower than competitors’ and whether the
company can achieve strong product differentiation.
Answer:
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.
Answer:
A broad differentiation strategy generally produces the best results in situations where:
A. buyer brand loyalty is low.
B. few rival firms are following a similar differentiation approach.
C. new and improved products are introduced only infrequently.
D. most rivals are pursuing a differentiation strategy and are seeking to differentiate
their products on most of the same features and attributes.
E. perceived value of a product is not of great importance.
Answer:
Well-stated objectives are:
A. quantifiable or measurable, and contain deadlines for achievement.
B. succinct and concise so as to identify the company’s risk and return options.
C. broad and take into account views of all the stakeholders.
D. directly related to the dividend payout ratio for stockholder returns.
E. representative of customers’ aspirations for company performance.
Answer:
Which of the following statements about developing organizational competencies and
capabilities is FALSE?
A. Core competencies or capabilities are most often bundles of skills and know-how
that grow out of the combined efforts of cross-functional work groups and departments
performing complementary activities at different locations in a firm’s value chain.
B. Evolving changes in customer needs and competitive conditions often require
tweaking and adjusting a company’s portfolio of competencies and intellectual capital to
keep its capabilities freshly honed and on the cutting edge.
C. Normally, core competencies and competitive capabilities emerge incrementally as a
company (1) acts to bolster skills that contributed to earlier successes, or (2) acts to
respond to customer problems, new technological or market opportunities, and the
competitive maneuvers of rivals.
D. Building organizational capabilities is best and most cost-effectively accomplished
by hiring a cadre of people with the right talent and expertise, putting them together in a
single work group, and then teaming the work group with key strategic allies/partners to
mesh the skills, expertise, and competencies needed to perform the desired capabilities
with some proficiency.
E. The key to leveraging a core competence into a distinctive competence (or
transforming a capability into a competitively superior capability) is concentrating more
effort and talent than rivals on deepening and strengthening the competence or
capability so as to achieve the dominance needed for competitive advantage.
Answer:
Which of the following is FALSE as it concerns the merits of why acting in a socially
responsible manner is good business?
A. The higher the public profile of a company or brand, the greater the scrutiny of its
activities and the higher the potential for it to become a target for pressure group action.
B. Acting in a socially responsible manner nearly always results in higher profits and a
higher stock price for shareholders.
C. To the extent that a company’s socially responsible behavior wins applause from
consumers and fortifies its reputation, a company may win additional patronage.
D. Some employees feel better about working for a company committed to improving
societya condition that can contribute to lower turnover and better worker productivity.
E. Companies with deservedly good reputations for contributing time and money to the
betterment of society are better able to attract and retain employees compared to
companies with tarnished reputations.
Answer:
For a company to translate its performance of value chain activities into competitive
advantage, it must:
A. undertake ongoing and persistent efforts to be cost-efficient and develop
differentiation advantages.
B. have more core competencies than rivals.
C. have at least three distinctive competencies.
D. have competencies that allow it to produce the highest-quality product in the
industry.
E. have more competitive assets than competitive liabilities.
Answer:
The single most visible factor that distinguishes successful culture-change efforts from
failed attempts is:
A. forceful management actions to empower employees to adopt new operating
practices.
B. competent leadership at the top.
C. de-layering the management hierarchy.
D. developing a new value statement that inspires company personnel to put forth their
best efforts to achieve performance targets.
E. convincing employees that top management is genuinely committed to high ethical
standards and the exercise of corporate social responsibility.
Answer:
A company’s resource weaknesses can relate to all of the following EXCEPT:
A. inferior or unproven skills, expertise, or intellectual capital in competitively
important parts of the business.
B. something that it lacks or does poorly in comparison to rivals.
C. deficiencies in competitively important physical, organizational, or intangible assets.
D. missing or competitively inferior capabilities in key areas.
E. rare resources and capabilities.
Answer:
A company exhibits strategic intent when:
A. management crafts and adopts a strategic plan.
B. it relentlessly pursues an ambitious strategic objective, concentrating the full force of
its resources and competitive actions on achieving that objective.
C. it aggressively pursues financial objectives, establishing a priority on meeting the
performance metrics and instilling a sense of urgency throughout the company.
D. management establishes a comprehensive set of financial objectives that meet
stockholder expectations.
E. it capitalizes on its primary competitive advantage and ensures resources are
allocated to maintain its strategy.
Answer:
Perhaps the most important benefit of a vivid, engaging, and convincing strategic vision
is:
A. helping gain managerial consensus on what resources must be developed to
successfully achieve strategic objectives.
B. uniting company personnel behind managerial efforts to get the company moving in
the intended direction.
C. helping justify the company’s mission of making a profit.
D. helping company personnel understand the logic of the company’s business model.
E. keeping company personnel well-informed.
Answer:
What is the business term given for a company that generates cash flows over and
above its internal requirements and can provide the corporate parent with funds for
reinvestment?
A. Cash hog
B. Cash cow
C. Cash chest
D. Free cash flow
E. Cash generator
Answer:
The most powerful of the five competitive forces is USUALLY:
A. the competitive pressures that stem from the ready availability of attractively priced
substitute products.
B. the competitive pressures associated with the market maneuvering and jockeying for
buyer patronage that goes on among rival sellers in the industry.
C. the benefits that emerge from close collaboration with suppliers and the competitive
pressures that such collaboration creates.
D. the competitive pressures associated with the potential entry of new competitors.
E. the bargaining power and leverage that large customers are able to exercise.
Answer:
The payoff of doing a thorough SWOT analysis is:
A. identifying whether the company’s value chain is cost-effective vis–vis the value
chains of rivals.
B. helping strategy-makers benchmark the company’s resource strengths against
industry key success factors.
C. enabling a company to assess its overall competitive position relative to its key
rivals.
D. revealing whether a company’s market share, measures of profitability, and sales
compare favorably or unfavorably vis–vis key competitors.
E. assisting strategy-makers in crafting a strategy that is well-matched to the company’s
resources and capabilities, its market opportunities, and the external threats to its future
well-being.
Answer:
Which of the following is NOT one of the ways managers can enhance differentiation
based on value drivers?
A. Striving to create superior product features, design, and performance
B. Striving for innovation and technological advances
C. Pursuing continuous quality improvement
D. Increasing the intensity of marketing, brand building, and sales activities
E. Seeking out low-quality inputs
Answer:
Companies racing against rivals for global market leadership need strategic alliances
and collaborative partnerships with companies in foreign countries to:
A. combat the bargaining power of foreign suppliers and help defend against the
competitive threat of substitute products produced by foreign rivals.
B. help raise needed financial capital from foreign banks and use the brand names of
their partners to make sales to foreign buyers.
C. get into critical country markets quickly, gain inside knowledge about unfamiliar
markets and cultures, and access valuable skills and competencies that are concentrated
in particular geographic locations.
D. help wage price wars against foreign competitors.
E. exercise better control over efforts to revamp the global industry value chain.
Answer:
The value of determining the relative competitive strength of each business a company
has diversified into is to have a quantitative basis for:
A. identifying which businesses have large/small competitive advantages or competitive
disadvantages vis–vis the rivals in their respective industries.
B. rating them from strongest to weakest in terms of contributing to the corporate
parent’s revenue growth.
C. comparing resource strengths and weaknesses, business by business.
D. rating them from strongest to weakest in contending for market leadership in their
respective industries.
E. rating them from strongest to weakest in terms of contributing to the corporate
parent’s profitability.
Answer:
Exxon Mobil enters into a pact with Gazprom, the world’s largest natural gas extractor,
to set up a processing unit in Moscow. Which of the following is most likely the reason
for Exxon Mobil to opt for this strategic alliance?
A. To gain access to new customers
B. To scale back its core competencies
C. To restrict its factors of production
D. To gain access to low-cost inputs of production
E. To better compete with Gasprom
Answer:
Which of the following ARE common shortcomings of company vision statements?
A. Too specific and too flexible
B. Unrealistic, unconventional, and un-businesslike
C. Too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on
superlatives
D. Too graphic, too narrow, and too risky
E. Not customer-driven, out of step with emerging technological trends, and too
ambitious
Answer:
Calculating quantitative attractiveness ratings for the industries a company has
diversified into involves:
A. determining each industry’s key success factors, calculating the ability of the
company to be successful on each industry KSF, and obtaining overall measures of the
firm’s ability to compete successfully in each of its industries based on the combined
KSF ratings.
B. determining each industry’s competitive advantage factors, calculating the ability of
the company to be successful on each competitive advantage factor, and obtaining
overall measures of the firm’s ability to achieve sustainable competitive advantage in
each of its industries based on the combined competitive advantage factor ratings.
C. selecting a set of industry attractiveness measures, weighting the importance of each
measure, rating each industry on each attractiveness measure, multiplying the industry
ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings
for each industry to obtain an overall industry attractiveness score, and using the overall
industry attractiveness scores to interpret the attractiveness of all the industries, both
individually and as a group.
D. rating the attractiveness of each industry’s strategic and resource fits, summing the
attractiveness scores, and determining whether the overall scores for the industries as a
group are appealing or not.
E. identifying each industry’s average profitability, rating the difficulty of achieving
average profitability in each industry, and deciding whether the company’s prospects for
above-average profitability are attractive or unattractive, industry by industry.
Answer:
Which of the following is NOT a reason why crafting a strategy to compete in one or
more foreign markets is inherently complex?
A. Because factors that affect industry competitiveness vary from country to country
B. Because of the potential for location-based advantages to conducting value chain
activities in certain countries
C. Because different government policies and economic conditions make the business
climate more favorable in some countries than others
D. Because of the risks for shifts in currency exchange rates
E. Because similarities in buyer tastes and preferences facilitate standardization of
products and services
Answer:
Competitive strength can be determined by assigning measures based on perceived
importance because:
A. it provides a more accurate assessment of the strength of competitive forces.
B. it eliminates the bias introduced for those firms having large market shares.
C. the different measures of competitive strength are unlikely to be equally important.
D. the results provide a more reliable measure of what competitive moves rivals are
likely to make next.
E. weighting each company’s overall competitive strength by the size of its market
share produces a more accurate measure of its true competitive strength.
Answer:
The lower the user’s switching costs, the:
A. harder it is for the sellers of attractive substitutes to lure buyers to their offering.
B. more intense the competitive pressures posed by substitute products.
C. less intense the competitive pressures posed by substitute products.
D. greater the bargaining power from both suppliers and influential customers.
E. lesser the bargaining power from both suppliers and influential customers.
Answer:
According to the advocates of ethical relativism:
A. if the use of underage labor and/or the payment of bribes/kickbacks are acceptable in
a particular culture/society/country, then a case can be made that it is morally correct
and ethical for a company to use these practices in conducting its business activities in
that culture/society/country.
B. each company should have the flexibility to set its own standards for deciding
whether the use of underage labor and/or the payment of bribes/kickbacks are ethically
acceptable or not.
C. if the use of underage labor and/or the payment of bribes/kickbacks are not legal but
locally acceptable in a particular country, then it is morally correct and ethical for a
company to use these practices in that country.
D. each industry should go by standards established by competitors for deciding
whether the use of underage labor and/or the payment of bribes/kickbacks are ethically
acceptable or not.
E. it is very clear that the use of underage labor or the payment of bribes and kickbacks
are ethically impermissiblelocal customs, behavioral norms, and traditions absolutely
cannot be taken into account.
Answer:
Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy?
A. Over-emphasizing efforts to strongly differentiate the company’s product from those
of rivals rather than being content with weak product differentiation
B. Offering trivial improvements in quality, service, or performance features
C. Overcharging for the differentiating features
D. Adding so many frills and extra features that the product exceeds the needs of buyers
E. Overspending on efforts to differentiate the company’s product offering
Answer:
Which of the following is NOT a question asked to deduce a marketing-related key
success factor?
A. What are the industry product R&D capabilities and expertise in product design?
B. On what basis do buyers choose between the competing brands of sellers?
C. What product attributes and service characteristics are crucial?
D. What resources must a company have to be competitive?
E. What shortcomings are almost certain to put a company at a significant
disadvantage?
Answer:
Identify and briefly explain what is meant by each of the following terms:
a. horizontal scope
b. vertical scope
c. scope of the firm
Answer:
Identify and briefly explain any three factors that weaken the competitive pressures
stemming from the threat that new firms will enter the industry.
Answer:
While Six Sigma programs often improve the efficiency of many operating activities
and processes, there is evidence that innovation can be stifled by Six Sigma programs.
True or false? Explain.
Answer:
Discuss the pros and cons of a strategy of unrelated diversification.
Answer:
Identify at least three benefits of constructing a strategic group map.
Answer:
What are the five competitive forces that comprise the five forces model of
competition?
Answer:
What action steps can managers take to realize full value from TQM or Six Sigma
initiatives and promote a culture of operating excellence?
Answer:
A data storage company realizes that its facilities are used most by financial institutions.
It capitalizes on the opportunity and starts storing specific financial information only
and is now one of the most sought-after financial databases. What strategy has the
company employed?
Answer:
What are the advantages of outsourcing non-critical and sometimes even critical value
chain activities?
Answer:
Identify and briefly discuss four of the recommended practices companies have used to
recruit and retain the best employees to make the rank-and-file employees a genuine
competitive asset.
Answer:
Under what circumstances is it advantageous for a company competing in foreign
markets to disperse certain value chain activities across many countries?
Answer:
What are the advantages of strategic alliances and collaborative partnerships with key
suppliers?
Answer:
What is meant by the term corporate culture? Why is corporate culture an important
factor in implementing and executing strategy?
Answer:
Is it more accurate to think of strategy as being “proactive” or as being “reactive”?
Why?
Answer:
Why is a company’s strategy partly proactive and partly reactive?
Answer:
Identify and explain the three schools of thought about ethical standards for companies
with international operations.
Answer:
When should a company choose to set up operations from the ground up?
Answer:
Identify the key characteristics of a well-stated organizational objective.
Answer:
How can one tell a winning strategy from a strategy that is mediocre or a loser?
Answer: