The chief difference between a low-cost leader strategy and a focused low-cost strategy
is
A. whether the product is strongly differentiated or weakly differentiated from rivals.
B. the degree of bargaining power that buyers have.
C. the size of the buyer group that a company is trying to appeal to.
D. the production methods being used to achieve a low-cost competitive advantage.
E. the number of upscale attributes incorporated into the product offering.
Outsourcing the performance of value chain activities presently performed in-house to
outside vendors and suppliers makes strategic sense when
A. an activity can be performed better or more cheaply by outside specialists.
B. it allows a company to focus on its core business and leverage its key resources.
C. outsourcing wont adversely hollow out the companys technical know-how,
competencies, or capabilities while it improves organizational flexibility and speeds
time to market.
D. it improves organizational flexibility and speeds time to market.
E. All of these.
A useful guideline in designing strategy-facilitating policies and operating procedures is
A. to prescribe enough policies to give organizational members clear direction in
implementing strategy and to place desirable boundaries on their actions, then empower
them to act within these boundaries however they think makes sense.
B. that strictly enforced policies work better than loosely enforced policies.
C. that more policies/procedures work better than few policies/procedures and that strict
enforcement always beats lax enforcement.
D. to let individuals act in an empowered and self-directed way, subject only to the
constraint that their actions and behavior be ethical and in step with the corporate
culture.
E. to prescribe enough policies and procedures that little is left to chance in performing
value chain activities; employees should have no leeway to do things in a manner that
deviates from the companys best practices standard.
Which of the following is not one of the problems and risks of strategic alliances
between domestic and foreign firms?
A. Overcoming language and cultural barriers and the sometimes extensive managerial
time required for trust-building, communication, and coordination
B. The trouble allies can have reaching mutually agreeable ways to deal with key issues
C. Becoming overly dependent on another company for essential expertise and
competitive capabilities
D. Making it harder to pursue a multidomestic strategy as compared to a global strategy
E. Suspicions about whether allies are being forthright in exchanging information and
expertise
Easy-to-copy differentiating features
A. do not offer the promise of sustainable competitive advantage.
B. are less expensive to integrate into a product or service offering.
C. tend to create as much value for consumers as difficult-to-copy differentiating
features.
D. should be patented before other companies follow suit.
E. lead to vigorous price competition.
A companys value chain
A. consists of the primary activities that it performs in seeking to deliver value to
shareholders in the form of higher dividends and a higher stock price.
B. depicts the internally performed activities associated with creating and enhancing the
companys competitive assets.
C. consists of two broad categories of activities: the primary activities that create
customer value and the requisite support activities that facilitate and enhance the
performance of the primary activities.
D. concerns the basic process the company goes through in performing R&D and
developing new products.
E. consists of the series of steps a company goes through to develop a new product, get
it produced and into the marketplace, and then start collecting revenues and earning a
profit.
For a particular company resource to have meaningful competitive power and perhaps
qualify as a basis for competitive advantage, it should
A. be competitively important, hard for competitors to copy or imitate, rare and
something rivals lack, and not be easily trumped by the substitute resources/capabilities
of rivals.
B. be something that a company does internally rather than in collaborative
arrangements with outsiders.
C. be patentable.
D. be rooted in the companys organizational capital, information capital, or human
capital.
E. have the potential for lowering the firms unit costs.
In analyzing the nine-cell matrix, those businesses in the three cells in the lower right
corner of the matrix
A. are typically weak performers and have the lowest claim on corporate resources.
B. typically are prime candidates for divesture.
C. are destined for squeezing out the maximum cash flows.
D. typically have dimmer profit outlooks than those in the middle with medium
resource priority.
E. All of these.
The best place to look for cross-business strategic fits is
A. in R&D and technology activities.
B. in supply chain activities.
C. in sales and marketing activities.
D. in production and distribution activities.
E. anywhere along the respective value chains of related businessesno one place is best.
The business case for why companies should act in a socially responsible manner
includes such reasons as
A. it generates internal benefits (as concerns employee recruiting, workforce retention,
training, and improved worker productivity).
B. it reduces the risk of reputation-damaging incidents.
C. it is in the best interest of shareholders.
D. the potential for increased buyer patronage.
E. All of these
Which one of the following does not represent market circumstances that make a
focused low-cost or focused differentiation strategy attractive?
A. When it is costly or difficult for multisegment competitors to meet the specialized
needs of the target market niche and at the same time satisfy the expectations of their
mainstream customers
B. When the industry has many different segments and market niches, thereby allowing
a focuser to pick an attractive niche suited to its resource strengths and capabilities
C. When industry leaders have chosen not to compete in the niche
D. When the target market niche is big enough to be profitable and offers good growth
potential
E. When buyers are not strongly brand loyal and a large number of other rivals are
attempting to specialize in the same target segment
In moving to alter a problem culture, management should
A. identify which aspects of the present culture are supportive of good strategy
execution and which ones are not.
B. specify what new actions, behaviors, and work practices should be prominent in the
“new” culture.
C. talk openly about the problems of the present culture and how new behaviors will
improve performance.
D. employ visible, forceful actionsboth substantive and symbolicto ingrain a new set of
behaviors, practices, and cultural norms.
E. All of these.
Which of the following is not characteristic of a compensation and reward system
designed to help drive successful strategy execution?
A. Tying incentives to performance outcomes directly linked to good strategy execution
and financial performance
B. Keeping the time between achieving the target performance outcome and the
payment of the reward as short as possible
C. Making sure the performance targets that each individual or team is expected to
achieve involve outcomes that the individual or team can personally affect
D. Generous rewards for people who turn in outstanding performances
E. A reward system that involves 50 percent nonmonetary rewards and a work
environment that avoids placing pressure on managers and employees to perform at
high levels
Symbolic culture-changing actions are best represented by
A. those actions top executives take to lead by example.
B. frugality if a low-cost strategy is being executed.
C. ensuring all management actions are “walking the talk.”
D. ceremonial events to celebrate actions that exemplify the performance culture.
E. All of these.
The drawbacks of a localized multidomestic strategy include
A. hindering the use of cross-market subsidization techniques and increasing company
vulnerability to adverse shifts in currency exchange rates.
B. making it very difficult to take into account significant country-to-country
differences in distribution channels and marketing methods.
C. making it difficult and costly to be responsive to country-to-country differences in
customer needs, buying habits, cultural traditions, and market conditions.
D. hindering transfer of a companys competencies and resources across country
boundaries and hindering the pursuit of a single, uniform competitive advantage in all
country markets where a company operates.
E. being unsuitable for competing in the markets of emerging countries and posing
added difficulty in building multiple profit sanctuaries.
The task of crafting corporate strategy for a diversified company encompasses
A. picking the new industries to enter and deciding on the means of entry.
B. initiating actions to boost the combined performance of the businesses the firm has
entered.
C. pursuing opportunities to leverage cross-business value chain relationships and
strategic fits into competitive advantage.
D. steering corporate resources into the most attractive business units.
E. All of these.
Striving to be socially responsible entails touching such bases as
A. what actions to take to enhance workforce diversity and make the company a great
place to work.
B. whether to make charitable contributions and donate money and the time of
company personnel to community service endeavors.
C. what, if any, actions to take to protect or enhance the environment (beyond what is
legally required).
D. exerting conscious efforts to ensure that all elements of the companys strategy are
ethical and actions to make the company a great place to work.
E. All of these
A resource-based strategy
A. is often based on cross-department combinations of intellectual capital and expertise.
B. uses a companys valuable and rare resources and competitive capabilities to deliver
value to customers that rivals have difficulty matching.
C. is typically based on a stand-alone resource strength such as technological expertise.
D. refers to a companys most efficiently executed value-chain activity.
E. uses industry key success factors to provide a company with a core competence that
rivals cannot effectively imitate.
Which one of the following is not an offensive strategy option?
A. Adopting or improving on good ideas of other companies (rivals or otherwise)
B. Deliberately attacking those market segments where key rivals make big profits
C. Launching a preemptive strike to capture a rare opportunity
D. Offering an equally good or better product at a lower price
E. Introducing new features or models to fill vacant niches in its overall product
offering and better match the product offerings of key rivals
Cross-border coordination contributes to a competitive advantage for a global
competitor by
A. allowing production to be shifted from country to country to take advantage of
exchange rate fluctuations, energy costs, wage rates, or changes in tariffs and quotas.
B. allowing knowledge gained in one location to be transferred to operations in other
countries.
C. shifting workloads from where they are unusually heavy to locations were personnel
are underutilized.
D. accelerating product development and enhancing innovation by globally linking and
coordinating the scattered R&D departments of a multinational company.
E. All of these.
The costs incurred when ethical wrongdoing is done fall into three specific categories
and include all except
A. intangible costs such as legal and investigative costs incurred by the company.
B. internal administrative costs associated with ensuring future compliance.
C. intangible costs such as customer defections.
D. less visible costs such as costs of complying with often harsher government
regulation.
E. visible costs to shareholders such as lower stock price.
Changing circumstances and ongoing managerial efforts to improve the strategy
A. account for why a companys strategy evolves over time.
B. explain why a companys strategic vision undergoes almost constant change.
C. make it very difficult for a company to have concrete strategic objectives.
D. make it very hard to know what a companys strategy really is.
E. All of these.
The contention that because different societies and cultures have divergent values and
standards of right and wrong it is appropriate to judge behavior as ethical/unethical in
the light of local customs and social mores rather than according to a single set of
ethical standards
A. defines what is meant by “ethical relativism.”
B. defines what is meant by “ethical universalism.”
C. is the foundation of integrated social contracts theory.
D. is the basis for the theory of ethical variation.
E. is the guiding principle of the Global Code of Ethical and Social Morality created by
the United Nations.
Which one of the following is a substantive culture-changing action that a companys
managers can undertake to alter a problem culture?
A. Identifying aspects of the present culture that pose problems
B. Revising policies and procedures in ways that will help drive cultural change and
replacing senior executives who may be stonewalling needed organizational and
cultural changes
C. Empowering employees to adopt whatever new work practices they believe will be
an improvement
D. Making a concerted effort to turn the companys core competencies into distinctive
competencies
E. Shifting from decentralized to centralized decision making so as to give senior
executives more authority and control in driving cultural change
Corporate restructuring strategies
A. involve making radical changes in a diversified companys business lineup, divesting
some businesses and acquiring new ones so as to put a new face on the companys
business lineup.
B. entail reducing the scope of diversification to a smaller number of businesses.
C. entail selling off marginal businesses to free resources for redeployment to the
remaining businesses.
D. focus on crafting initiatives to restore a diversified companys money-losing
businesses to profitability.
E. focus on broadening the scope of diversification to include a larger number of
businesses and boost the companys growth and profitability.
The two best reasons for investing company resources in vertical integration (either
forward or backward) are to
A. speed entry into foreign markets and/or exercise stronger control over operating
costs.
B. broaden the firms product line and/or enable the company to charge a premium price
for its product/service.
C. gain a first-mover advantage in adopting new production technologies and/or employ
potent defensive strategies.
D. strengthen the companys competitive position and/or boost its profitability.
E. achieve greater product differentiation and/or gain better access to prospective
buyers.
Which of the following is not an element of a companys business strategy?
A. Actions to respond to changing market conditions or other external factors
B. Actions to strengthen competitiveness via strategic alliances and collaborative
partnerships
C. Actions to strengthen internal capabilities and competitively valuable resources
D. Actions to manage the functional areas of the business
E. Management actions to revise the companys financial and strategic performance
targets
Business ethics concerns
A. developing a consensus among companies worldwide as to what ethical principles
that businesses should be expected to observe in the course of conducting their
operations.
B. what ethical behaviors should be expected of company personnel in the course of
doing their jobs.
C. the application of ethical principles and standards to business activities, behavior,
and decisions.
D. developing a special set of ethical standards for businesses to observe in conducting
their affairs.
E. picking and choosing among the consensus ethical standards of society to arrive at a
set of ethical standards that apply directly to operating a business.
Which of the following is not an example of an external threat to a companys future
profitability?
A. Likely entry of potent new competitors
B. The lack of a well-known brand name with which to attract new customers and help
retain existing customers
C. Unfavorable shifts in buyer demographics and tastes
D. Costly new regulatory requirements
E. Increase in interest rates
A low-cost leader can translate its low-cost advantage over rivals into superior profit
performance by
A. cutting its price to levels significantly below the prices of rivals.
B. using its low-cost edge to underprice competitors and attract price-sensitive buyers
in large enough numbers to increase total profits or refraining from price cutting and
using the low-cost advantage to earn a higher profit margin on each unit sold.
C. going all out to use its cost advantage to capture a dominant share of the market.
D. spending heavily on advertising to promote the fact that it charges the lowest prices
in the industry.
E. outproducing rivals and thus having more units available to sell.
Two analytical tools useful in determining whether a companys prices and costs are
competitive are
A. SWOT analysis and key success factor analysis.
B. SWOT analysis and benchmarking.
C. value chain analysis and benchmarking.
D. competitive position assessment and competitive strength assessment.
E. driving forces analysis and SWOT analysis.