A disadvantage of the centralized organization is that it:
A. lengthens response times by those closest to the market conditions because they
must seek approval for their actions.
B. does not encourage responsibility among lower-level managers and rank-and-file
employees.
C. discourages lower-level managers and rank-and-file employees from exercising any
initiative.
D. diverts authority away from those closest to, and most knowledgeable about, the
situation for actions.
E. results in higher-level managers being unaware of actions taken by empowered
personnel under their supervision.
For a best-cost provider strategy to be successful, a company must have:
A. excellent marketing and sales skills in convincing buyers to pay a premium price for
the attributes/features incorporated in its product.
B. resource strengths and competitive capabilities that allow it to incorporate upscale
attributes at lower costs than rivals whose products have similar upscale attributes.
C. access to greater learning/experience curve effects and scale economies than rivals.
D. one of the best-known and most respected brand names in the industry.
E. a short, low-cost value chain.
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?
Regardless of the circumstances, an industry’s key success factors can always be
deduced by asking the same three questions:
1) On what basis do buyers of the industry’s product choose between the competing
brands of sellers? That is, what product attributes and service characteristics are
crucial?
2) Given the nature of competitive rivalry prevailing in the marketplace, what resources
and competitive capabilities must a company have to be competitively successful?
3) What shortcomings are almost certain to put a company at a significant competitive
disadvantage?
A company’s business model:
A. concerns the actions and business approaches that will be used to grow the business,
conduct operations, and stake a competitor’s market position.
B. is management’s blueprint for how it will generate revenues sufficient to cover costs
and yield an attractive profit.
C. concerns what combination of moves in the marketplace it plans to make to
outcompete rivals.
D. deals with how it can simultaneously maximize profits and operate in a socially
responsible manner that keeps its prices as low as possible.E. concerns how
management plans to pursue strategic objectives, given the larger imperative of meeting
or beating its financial performance targets.
The difference between the concept of a company mission statement and the concept of
a strategic vision is that:
A. a mission concerns what to do to achieve short-term objectives, while a strategic
vision concerns what to do to achieve long-term performance targets.
B. a mission statement focuses on the methods needed to make a profit, whereas a
strategic vision concerns what business model to employ in striving to make a profit.
C. a mission statement deals with what to accomplish on behalf of shareholders, while a
strategic vision concerns what to accomplish on behalf of customers.
D. a mission statement typically concerns a company’s purpose and its present business
scope, whereas the principal concern of a strategic vision is a company’s aspirations for
its future.E. a mission statement deals with “where we are headed,” whereas a strategic
vision provides the critical answer to “how will we get there?”
Which of the following questions tests the merits of the firm’s strategy and distinguishes
it as a winning strategy?
A. Is the company’s strategy ethical and socially responsible and does it put enough
emphasis on good product quality and good customer service?
B. Is the company putting too little emphasis on growth and profitability and too much
emphasis on behaving in an ethical and socially responsible manner?
C. Is the strategy resulting in the development of additional competitive capabilities?
D. Is the strategy helping the company achieve a sustainable competitive advantage and
is it resulting in better company performance?
E. Does the strategy strike a good balance between maximizing shareholder wealth and
maximizing customer satisfaction?
At companies where executives believe in the merits of practicing the values and ethical
principles that have been espoused, the:
A. executives have usually personally written the statement of core values and the code
of ethics.
B. company’s pursuit of higher profits is tempered, so that the company will not come
across to customers and the general public as greedy.
C. company’s chances for strategic success and market leadership are substantially
reduced because company personnel are hesitant to engage in business practices that are
unethical.
D. stated core values and ethical principles are the foundation of the corporate
culture.E. core values and ethical standards are made a prominent and visible part of the
company’s strategic intent and strategy.
What is it called when a diversified company can add value by shifting capital from
business units generating free cash flow to those needing additional capital to expand
and realize their growth potential?
A. Internal capital market
B. Cash cow benefits
C. Economic value added
D. Shareholder value added
E. Derived valuation
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.
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
Which of the following is an example of an export strategy?
A. The popular Disney character Mickey Mouse can only be leased or rented for use by
companies.
B. Subway allows small-business owners to use its trademarks, services, and products
for a fee.
C. The Unites States is the world’s largest producer and supplier of artificial fur.
D. American Airlines’ common stock, owned by AMR Corp., is not available for public
purchase.E. Walmart earns a quarter of its revenue outside the United States.
It is normal for a company’s strategy to end up being:
A. a blend of offensive actions on the part of managers to improve the company’s
profitability and defensive moves to counteract changing market conditions.
B. a combination of conservative moves to protect the company’s market share and
somewhat more risky initiatives to set the company’s product offering apart from rivals.
C. a close imitation of the strategy employed by the recognized industry leader.
D. a blend of proactive actions to improve the company’s competitiveness and financial
performance, and adaptive reactions to unanticipated developments and fresh market
conditions.
E. more a product of clever entrepreneurship than of efforts to clearly set a company’s
product/service offering apart from the offerings of rivals.
Using domestic plants as a production base for exporting goods to selected foreign
country markets:
A. can be an excellent initial strategy to test the international waters and learn if
attractive market positions can be established in foreign markets.
B. can be a competitively successful strategy when a company is focusing on vacant
market niches in each foreign country and does not have to compete head-to-head
against strong host country competitors.
C. can be a powerful strategy since a company can maintain a one-country production
base allowing it to capitalize on company competencies and capabilities.
D. can be a weak strategy when competitors are pursuing multi-country strategies.
E. can be a powerful strategy because a company is not vulnerable to fluctuating
exchange rates.
One important indicator of how well a company’s present strategy is working is
whether:
A. it has more core competencies than close rivals.
B. its strategy is built around at least two of the industry’s key success factors.
C. the company is achieving its financial and strategic objectives and whether it is an
above-average industry performer.
D. it is customarily a first-mover in introducing new or improved products (a good sign)
or a late-mover (a bad sign).
E. it is subject to weaker competitive forces and pressures than close rivals (a good
sign) or stronger competitive forces and pressures (a bad sign).
What is the role and responsibility of a company’s CEO in the strategy-making,
strategy-executing process?
Encouraging employees to challenge existing ways of doing things, and to be creative
and innovative in proposing better ways of operating, requires the company to create a
supporting environment. In many firms, this means empowering their employees. What
is meant by empowerment of employees? How does it differ from delegation of
authority? In what ways can empowerment of employees aid the cause of good strategy
execution?
What are mergers and/or acquisitions? How do they contribute to enhancing a
company’s position?
Isabelle is in the process of setting financial and strategic objectives for her marketing
company. She realizes she needs to add short-term and longer-term performance targets.
Is it important to include short-term and long-term objectives at this stage? Which one
is more important? Explain.
Identify and briefly explain any three factors that intensify competitive pressures
stemming from the threat that new firms will enter the industry.
A well-conceived strategic vision helps prepare a company for the future. True or false?
Explain and justify your answer.
What is the analytical value of studying competitors and trying to predict what moves
rivals will make next?
Draw a typical company value chain and briefly explain why the proficiency with
which a firm performs the activities comprising its value chain matters.
What are the strategic disadvantages of a backward vertical integration strategy?