Core competencies and competitive capabilities are usually:
A. lodged in the narrow skills and specialized work efforts of a single department, as
opposed to the combined expertise and capabilities of specialists scattered across
several departments.
B. observed to stem from collaborative efforts with strategic allies.
C. bundles of skills and know-how that most often grow out of the collaborative efforts
of cross-functional work groups and departments performing complementary activities
at different locations in a firm’s value chain.
D. found to result in competitive advantage when they involve highly specific
technologies and are grounded in a company’s own deep technical expertise.
E. built rapidly, usually in conjunction with important product innovations.
Answer:
Well-conceived visions are ________ and ____________ to a particular organization
and they avoid generic, feel-good statements that could apply to hundreds of
organizations.
A. widespread; unique
B. recurring; customary
C. distinctive; specific
D. customary; familiar
E. universal; established
Answer:
Reengineering how a firm performs a business process:
A. is a tool for pulling the pieces of strategy-critical processes out of different
departments and unifying their performance in a single department or cross-functional
work group that is in charge of the whole process.
B. is the most frequently used tool of total quality management (TQM).
C. requires that a company have many strategic partnerships and alliances with
outsiders.
D. is typically cheaper and easier than using Six Sigma techniques to achieve the same
cost savings.
E. is usually a company’s most important “best practice” for achieving operating
excellence.
Answer:
What aspect of the diamond framework is MOST LIKELY responsible for
GlenmarkPharma setting up manufacturing facilities in the United States, the world’s
largest market for pharmaceuticals?
A. Licensing strategies
B. Demand conditions
C. Joint venture strategies
D. Franchising strategies
E. Firm strategy, structure, and rivalry
Answer:
Each of the following is likely to help a company’s low-cost provider strategy succeed
EXCEPT:
A. resources and capabilities to keep costs below those of its competitors.
B. cost-effective management of value chain activities better than rivals.
C. effective leveraging of cost drivers.
D. having the innovative capability to bypass certain value chain activities being
performed by rivals.
E. capabilities to simultaneously deliver lower cost and higher-quality/differentiated
features.
Answer:
Without a strategic framework, managers lack the context in which to:
A. fix things that really matter to business-unit performance and competitive success.
B. carry out company-wide goals related to the dynamics of a single business model.
C. employ the company’s resources in the pursuit of sustainable competitive advantage.
D. communicate aspirations for the company.
E. analyze the emerging market opportunities more precisely.
Answer:
The bargaining leverage of suppliers is greater when:
A. the suppliers’ products/services account for a small percentage of industry members’
costs.
B. industry members incur low costs in switching their purchases from one supplier to
another.
C. industry members account for a big fraction of supplier’s sales.
D. there is extensive seller-supplier collaboration.
E. the supplier industry is composed of a large number of relatively small suppliers.
Answer:
Corporate parenting refers to all of the following EXCEPT:
A. the role that a diversified corporation plays in nurturing its component businesses
through the provision of top management expertise, disciplined control, financial
resources, and capabilities.
B. the help subsidiaries receive in performing better when they utilize astute high-level
guidance from corporate executives.
C. the corporation’s ability to provide generalized support resources so as to create
value by lowering companywide overhead costs by eliminating duplication of efforts.
D. efforts to capitalize on the umbrella brands and enhance value proposition across
businesses.
E. efforts to judiciously segregate funds for each business in such a way that keeps the
money safe and discourages shifting funds across business units.
Answer:
Which of the following is NOT one of the four basic routes to achieving a
differentiation-based competitive advantage?
A. Delivering value to customers via the company’s resources, competencies, and value
chain activities that rivals don’t have or can’t afford to match and are well-matched to
the requirements of the strategy
B. Incorporating tangible features that raise product performance and increase customer
satisfaction with the product
C. Incorporating product attributes and user features that lower the buyer’s overall costs
of using the company’s product
D. Appealing to buyers who are sophisticated and shop hard for the best, stand-out
differentiating attributes
E. Incorporating features that enhance buyer satisfaction in intangible or noneconomic
ways
Answer:
In which of the following instances is rivalry among competing sellers NOT more
intense?
A. When certain competitors are dissatisfied with their market position and make
moves to bolster their standing
B. When strong companies outside the industry acquire weak firms in the industry and
launch aggressive moves to transform their newly acquired competitors into stronger
market contenders
C. When competitors are fairly equal in size and capability
D. When the products of rivals are weakly differentiated, buyer switching costs are low,
and market demand is growing slowly
E. When there are vast numbers of small rivals so the impact of any one company’s
actions is spread thinly across all industry members
Answer:
Which of the following techniques abbreviated as MBWA is utilized by leaders to stay
informed on how well the strategy execution process is progressing?
A. Managing by walking around
B. Managing business with action
C. Multi-business warning actions
D. Managers being well-advised
E. Multi-business walking ahead
Answer:
Which of the following statements about Six Sigma quality programs is true?
A. While Six Sigma programs often improve the efficiency of numerous operating
processes, there is evidence that the approach can stifle innovative activities.
B. Six Sigma is a philosophy of managing a set of business practices that emphasizes
continuous improvement in all phases of operations and 100 percent accuracy in
performing tasks.
C. Six Sigma’s DMAIC process is a particularly good vehicle for improving
performance when there are only small variations in how well an activity is performed.
D. The focus of Six Sigma programs is on the development of new products or new
business processes but not on improving existing products or business processes.
E. Six Sigma is a system of statistical procedures for eliminating 92 percent of the
variability in how a task is performed.
Answer:
Broad differentiation strategies are well-suited for market circumstances where:
A. there are many ways to differentiate the product or service that have value to buyers.
B. most buyers have the same needs and use the product in the same ways.
C. technological changes are slow-paced.
D. barriers to entry are high and suppliers have a low degree of bargaining power.
E. price competition is especially vigorous.
Answer:
The hallmarks of a high-performance corporate culture include:
A. a deep commitment to employee training, unusually attractive fringe benefit
packages for company personnel, and frequently revised and updated values and ethics
statements.
B. a “can-do” spirit, pride in doing things right, no-excuses accountability, and a
pervasive results-oriented work climate where people go the extra mile to meet or beat
stretch objectives.
C. a strong emphasis on teamwork, strict enforcement of company policies and
procedures, and incentive compensation for all employees aligned with a balanced
scorecard approach to measuring performance.
D. a deep commitment to pioneering new best practices, a preference for being a
fast-follower as opposed to a first-mover or late-mover, and across-the-board bonuses
for all personnel when the company meets or beats stretch objectives.
E. a deep commitment to top-notch quality and superior customer service, dedicated use
of TQM and/or Six Sigma quality control programs, and the payment of big
performance bonuses and stock options.
Answer:
Businesses with strategic fit with respect to their supply chain activities perform better
together because of all of the following EXCEPT:
A. the potential for skills transfer in procuring materials.
B. the sharing of resources and capabilities in logistics.
C. the benefits of added collaboration with common supply chain partners.
D. the added leverage gained with shippers when securing volume discounts on
incoming parts and components.
E. the increased allocation and allotment of support activities and specialized resources
and capabilities.
Answer:
Companies that adopt the principle of ethical relativism in providing ethical guidance to
company personnel:
A. base their standards of what is ethical and what is unethical in the company’s home
market.
B. may quickly find themselves on a slippery slope with no higher order moral compass
if they operate in countries where ethical standards vary considerably from country to
country.
C. have no fair way to judge the ethical correctness of the conduct of company
personnel.
D. have a one-size-fits-all set of ethical standards.
E. end up allowing each company employee to determine what set of ethical standards
to observe.
Answer:
Executing strategy is a make-things-happen task that tests a manager’s ability to
perform all of the following EXCEPT:
A. manage the people, talents, and business processes of an operations-driven activities
company.
B. direct organizational change and achieve continuous improvement in operations and
business processes.
C. create and nurture a strategy-supportive culture.
D. meet or beat performance targets consistently.
E. focus on market conditions and the company’s resources and capabilities.
Answer:
A company must do all of the following to match structure to strategy EXCEPT:
A. choose a basic organizational design and modify it to fit the company’s particular
business.
B. supplement the design structure with coordinating mechanisms.
C. institute networking and communication arrangements to support strategy execution.
D. set up “ideal” organizational arrangements despite having to disturb existing
relationships.
E. knit the efforts of outsourced groups together.
Answer:
Which of the following is NOT typically a trigger to an evolving strategy?
A. The need to keep strategy in step with changing circumstances, market conditions,
and changing customer needs and expectations
B. The proactive efforts of company managers to fine-tune and improve one or more
pieces of the strategy
C. The need to abandon some strategy features that are no longer working well
D. The need to respond to the newly initiated actions and competitive moves of rival
firms
E. The need to respond to short-term swings in the stock market
Answer:
The higher the switching costs for industry members, the more it can:
A. limit supplier bargaining power.
B. enhance supplier bargaining power.
C. enhance the quality of parts and components being supplied, and in effect reduce
defect rates.
D. provide important cost savings for the collaborative supplier-seller relationship.
E. limit the supply of products and/or services.
Answer:
Corporate strategy for a diversified or multibusiness enterprise:
A. is orchestrated by mid-level managers and focuses on how to create a competitive
advantage in each specific line-of-business the total enterprise is in.
B. concerns how best to allocate resources across the departments of each line of
business the company is in.
C. is orchestrated by senior corporate executives and centers around the kinds of
initiatives the company uses to establish business positions in different industries
D. deals chiefly with what the strategic intent of each of its business units should be.
E. involves how functional strategies should be aligned with business strategies in each
of the various lines of business the company is in.
Answer:
Which of the following are characteristics of an effectively worded strategic vision
statement?
A. Balanced, responsible, and rational
B. Challenging, competitive, and “set in concrete”
C. Graphic, directional, and focused
D. Realistic, customer-focused, and market-driven
E. Achievable, profitable, and ethical
Answer:
The objectives of a well-crafted strategy require management to strive to:
A. match rival businesses’ products and quality dimensions in the marketplace.
B. build profits for short-term success.
C. realign the market to provoke change in rival companies.
D. develop lasting success that can support growth and secure the company’s future
over the long term.
E. re-create their business models regularly.
Answer:
Which of the following is NOT a principal offensive strategy option?
A. Leapfrogging competitors by being first to market with next-generation products
B. Using hit-and-run or guerrilla warfare tactics to grab sales and market share
C. Launching a preemptive strike to secure an advantageous position that rivals are
prevented or discouraged from duplicating
D. Pursuing continuous product innovation to draw sales and market share away from
rivals
E. Being the final competitor to market a next-generation product so as to guarantee the
product is operationally sound
Answer:
Although it is relatively easy for rivals to implement process management tools, it is
much more difficult and time-consuming for them to:
A. instill a deeply ingrained culture of operating excellence.
B. keep employees well-informed about the strides being made with continuous
improvement.
C. unify the managerial efforts behind improving operating practices as a commendable
goal.
D. combine the pursuit of financial objectives with the pursuit of its strategic objectives.
E. understand the barriers to installing new operating activities.
Answer:
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.
Answer:
With the aid of a strategic group map, one can:
A. identify easily the entry and exit barriers for each strategic group.
B. pinpoint precisely which firms are in profitable strategic groups and which are not.
C. identify which competitive forces are strong and which are weak.
D. measure accurately whether across-group rivalry is stronger than within-group
rivalry, and vice versa.
E. reveal which companies are close competitors and which are distant rivals, and that
not all positions on the map are equally attractive.
Answer:
What makes related diversification an attractive strategy?
A. The ability to broaden the company’s product line
B. The opportunity to convert cross-business strategic fit into competitive advantage
over business rivals whose operations don’t offer comparable strategic fit benefits
C. The potential for improving the stability of the company’s financial performance
D. The ability to serve a broader spectrum of buyer needs
E. The added capability it provides in overcoming the barriers to entering foreign
markets
Answer:
To which of the following firms is the term “repeatedly evolving strategy” MOST
applicable?
A. A government agency that makes plans for a set period of time and implements them
phase by phase through the tenure
B. A mobile company, established in a saturated market, that aims at quarterly release of
new products
C. A new cosmetics manufacturer in a market that replicates the products of a
competitor at a moderate quality and lower price
D. A nationalized bank that lends at a lower interest rate but a zero processing fee in a
market crowded with privatized banks running at high cost
E. A firearms regulatory agency, set up by the government, that publishes industry
standards for safety, reliability, and quality of arms and ammunition
Answer:
The better-off test for evaluating whether a particular diversification move is likely to
generate added value for shareholders involves assessing whether the move will:
A. make the company better off because it will produce a greater number of core
competencies.
B. make the company better off by improving its balance sheet strength and credit
rating.
C. make the company better off by spreading shareholder risks across a greater number
of businesses and industries.
D. produce a synergistic outcome such that the company’s different businesses perform
better together than apart and the whole ends up being greater than the sum of the parts.
E. help each business earn exactly what they were earning before coming under the
same corporate umbrella.
Answer:
Which of the following is the best example of a well-stated strategic objective?
A. Increase revenues by more than the industry average.
B. Be among the top five companies in the industry in customer service.
C. Overtake key competitors on product performance or quality within three years.
D. Improve manufacturing performance by 5 percent within 12 months.
E. Obtain 150 new customers during the current fiscal year.
Answer:
During the 1980s, the YKK Group developed and manufactured all its fastening
products within Japan. Which of the following aspects of the global strategy was YKK
trying to achieve?
A. YKK catered to homogenous buyer needs across countries and regions.
B. YKK centralized its value chain thereby facilitating centralized control.
C. YKK engaged in higher levels of R&D by spreading risks over higher-volume
output.
D. YKK sold the same products under the same brand name everywhere.
E. YKK established a single plant to produce different versions of the same product.
Answer:
In a single-business company, the strategy-making hierarchy consists of:
A. business strategy, divisional strategies, and departmental strategies.
B. business strategy, functional strategies, and operating strategies.
C. business strategy and operating strategy.
D. managerial strategy, business strategy, and divisional strategies.
E. corporate strategy, divisional strategies, and departmental strategies.
Answer:
A strategic group:
A. consists of those industry members that are growing at about the same rate and have
similar product line breadth.
B. includes all rival firms having comparable profitability.
C. is a cluster of industry members with similar competitive approaches and market
positions in the market.
D. consists of those firms whose market shares are about the same size.
E. is made up of those firms having comparable profit margins.
Answer: