The principal advantages of strategic alliances over vertical integration or horizontal
mergers/acquisitions are:
A. resource pooling and risk sharing, more adaptive response capabilities, and greater
speed of deployment.
B. potential profitability of the alliance and related experience-curve economics.
C. the facilitation of best practices, more production capacity, and relevant synergistic
savings.
D. the transactional and relational concept of operating practices and competencies.
E. E)material additions to a company’s technological capabilities, strengthening of the
firm’s competitive position, and boosting of its profitability.
A pharmaceutical company functioning in France for the last 10 years has moderate
sales in a crowded market with competitors offering drugs with similar efficacy and
safety precautions, but with better sales. The greatest challenge is to increase the
prescription of their drugs. What would be the MOST effective strategy to improve
sales performance in the existing market?
A. Modifying marketing communication to increase brand familiarity within key
physician segments
B. Relocating all the existing drug manufacturing facilities to developing countries to
reduce operational costs
C. Employing hiring plans that aim at acquiring drug designers from rival companies
D. Exiting the market and entering a new unexplored geographical location
E. Engaging in new contract talks with suppliers about price breaks
Management’s most powerful tool for mobilizing organizational commitment to
competent strategy execution and operating excellence is the:
A. diligent and persistent use of benchmarking and best practices.
B. proper use of a reward structure with motivational incentives.
C. implementation of TQM and/or Six Sigma programs.
D. periodic giving of inspirational speeches aimed at arousing employees’ emotional
energy.
E. process of providing employees with a high degree of job security (ideally, via a
no-layoff policy).
The broad areas that internal information business systems need to cover include all of
the following EXCEPT:
A. financial performance data.
B. supplier/strategic partner data.
C. customer data.
D. operations data.
E. competitor data.
Which of the following is NOT a viable strategy option for a local company in
competing against global challengers?
A. Using cross-market transfer strategies to hedge against the risks of exchange rate
fluctuations and adverse political developments
B. Developing business models to exploit shortcomings in local distribution networks
or infrastructures
C. Taking advantage of low-cost labor and other competitively important local
workforce qualities
D. Transferring a company’s expertise to cross-border markets and initiating actions to
contend on a global scale
E. Using acquisitions and rapid growth strategies to defend against expansion-minded
multinationals
When an activity becomes something a company has learned to perform proficiently
and capably, the company is said to have:
A. a competence.
B. a competitive advantage over rivals.
C. a key value chain proficiency.
D. a distinctive capability.
E. a resource advantage.
There is ample room for companies to customize their diversification strategies and be
defined as being either narrowly or broadly diversified, and when combination
related-unrelated diversification strategy options are adopted, they have particular
appeal to:
A. those companies with a mix of valuable competitive assets, covering the spectrum
from generalized to specialized resources and capabilities.
B. those large multibusiness firms, sometimes called conglomerates, because they have
a unique capability designed to stabilize earnings.
C. companies with a portfolio of product choices for buyer-related behavior.
D. corporate managers who take on risks without performing due diligence.E. corporate
managers who want to play the corporate parent role without fiduciary responsibility.
The approach of a firm using a “think global, act local” version of a transnational
strategy entails:
A. producing and marketing a variety of product versions under the same brand name,
with each different version being designed specifically to accommodate the needs and
preferences of buyers in a particular country.
B. having little or no strategy coordination across countries.
C. pursuing the same basic competitive strategy theme (low cost, differentiation, best
cost, focused) in all countries where the firm does business but giving local managers
some latitude to adjust product attributes to better satisfy local buyers and to adjust
production, distribution, and marketing to be responsive to local market conditions.
D. selling the company’s products under a wide variety of brand names (often one brand
for each country or group of neighboring countries) so buyers in each country market
will think they are buying a locally made brand.
E. selling numerous product versions (each customized to buyer tastes in one or more
countries and sometimes branded for each country),but opting to only sell direct to
buyers at the company’s website so as to bypass the costs of establishing networks of
wholesale/retail dealers in each country market.
Unhealthy company cultures typically have such characteristics as:
A. tight budget controls, overly strict enforcement of longstanding policies and
procedures, and high ethical standards.
B. a preference for conservative strategies, an aversion to incentive compensation, and
excessive emphasis on profitability.
C. a politicized internal environment, hostility to change and an aversion to looking
outside the company for best practices, new managerial approaches, and innovative
ideas.
D. overemphasis on employee empowerment, a complacent approach to building
competencies and capabilities, no coherent business philosophy, and excessively
bureaucratic policies and procedures.
E. an emphasis on innovation, a strong preference for hiring managers from outside the
company, and few core values and traditions.
Six Sigma processes:
A. are based on three principles: (1) all work is a statistically controllable process; (2)
no well-controlled process allows variability; and (3) defect-free work requires tight
statistical controls.
B. can be used for both improving existing business processes and for developing new
processes or products.
C. can be used for improving products or business processes but not for developing new
products or new processes.
D. consists of a disciplined, statistics-based system aimed at producing not more than
10 defects per million iterations for a manufacturing or assembly process.
E. can be used for developing new products or new business processes but not for
improving existing products or business processes.
What does a competitive strength score above 5 tell us about a diversified company’s
position in the market?
A. That its business units are all fairly strong market contenders in their respective
industries
B. That its business units are all fairly weak market contenders in their respective
industries
C. That the company will not likely perform well
D. That a company’s competitive strength score does not relate to the market position of
that business
E. That the company will likely fail
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.
In trying to gain employees’ wholehearted commitment to good strategy execution and
operating excellence, managers are well advised to use all of the following incentives
EXCEPT:
A. providing attractive perks and fringe benefits.
B. giving awards and public recognition to high performers and showcasing company
successes.
C. creating a work atmosphere in which there is genuine caring and mutual respect
among workers and between management and employees.
D. relying on opportunities for promoting from within wherever possible.E.
withholding information from employees about financial performance, strategy, and
competitors’ actions.
In which of the following instances is being a first-mover NOT particularly
advantageous?
A. When moving first with a pre-emptive strike makes imitation difficult or unlikely
B. When first-time buyers remain strongly loyal to pioneering firms in making repeat
purchases
C. When early commitments to new technologies, types of components, or emerging
distribution channels produce an absolute cost advantage over rivals
D. When markets are slow to accept the innovative product offering of a first-mover,
and fast followers possess sufficient resources and marketing muscle to overtake a first
mover
E. When being a pioneer helps build a firm’s image and reputation with buyers
Achieving a differentiation-based competitive advantage does NOT involve:
A. incorporating product attributes and user features that lower a buyer’s overall cost of
using the product.
B. incorporating features that raise the performance a buyer gets from using the
product.
C. incorporating features that enhance buyer satisfaction in noneconomic or intangible
ways.
D. delivering value to customers via competencies and competitive capabilities that
rivals don’t have or can’t afford to match.
E. appealing to buyers on the basis of attributes that rivals are emphasizing
In a weighted competitive strength analysis, each strength measure is assigned a weight
based on:
A. its percentage share of total industry revenues.
B. its percentage share of total industry losses.
C. its perceived importance in determining a company’s competitive success in the
marketplace.
D. its percentage share of total industry profits.
E. what it takes to provide better analytical balance between the companies with high
ratings and the companies with low ratings and thus get the sum of the weights to add
up to 1.0.
Prescribing policies and operating procedures aids the task of implementing strategy by:
A. helping ensure that worker eligibility for incentive bonuses is measured consistently
and awarded fairly.
B. fostering the use of best practices, TQM, Six Sigma, and continuous improvement
efforts.
C. acting as a powerful lever for changing employee attitudes about the need for a
different incentive and reward system.
D. helping build employee commitment to strengthening the company’s core
competencies and competitive capabilities.
E. placing limits on ineffective independent action and channelling efforts of
individuals along a path more conducive to good strategy execution and operating
excellence.
Identify and explain the significance of each of the following terms and concepts:
a. global strategy
b. export strategy
c. licensing strategy
d. franchising strategy
What is meant by the term corporate culture? Why is corporate culture an important
factor in implementing and executing strategy?
Under what circumstances is it advantageous for a company competing in foreign
markets to disperse certain value chain activities across many countries?
What are the five generic competitive strategies? Briefly describe each one and identify
the type of competitive advantage that each strategy is aimed at achieving.
How do socially responsible actions and sustainable business practices lower costs
related to human resources in a company?
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?