Which of the following is particularly pertinent in evaluating whether an industry
presents a sufficiently attractive business opportunity?
A. The industry’s growth potential, whether competition appears destined to become
stronger or weaker, and whether the industry’s overall profit prospects are above
average, average, or below average
B. An assessment of which firms in the industry have the best and worst competitive
strategies, whether the number of strategic groups in the industry is increasing or
decreasing, and whether economies of scale and experience curve effects are a key
success factor
C. Whether there are more than five key success factors and more than five barriers to
entry
D. Constructing a strategic group map and assessing the attractiveness of the
competitive position of each strategic group
E. Whether the market leaders enjoy competitive advantages and how hard it is to
develop a strongly differentiated product
Which of the following is a diversified business with one major “core” business and a
collection of small related or unrelated businesses?
A. A broadly diversified enterprise
B. A narrowly diversified enterprise
C. A multi-business enterprise
D. A high compensation/low risk enterprise
E. A dominant business enterprise
The tests of whether a diversified company’s businesses exhibit resource fit do NOT
include:
A. whether the excess cash flows generated by cash cow businesses are sufficient to
cover the negative cash flows of its cash hog businesses.
B. whether a business adequately contributes to achieving the corporate parent’s
performance targets.
C. whether the company has adequate financial strength to fund its different businesses
and maintain a healthy credit rating.
D. whether the corporate parent has sufficient cash to fund the needs of its individual
businesses and pay dividends to shareholders without having to borrow money.
E. whether the corporate parent has or can develop sufficient resource strengths and
competitive capabilities to be successful in each of the businesses it has diversified into.
Why are crafting and executing business strategies the foremost tasks of any
organization?
A. Because they are necessary ingredients of a sound operational business model
B. Because a good strategy coupled with a good strategy execution are the most telling
signs of good management and allow a company to be a standout performer in the
marketplace
C. Because the management skills of top executives are sharpened as they work their
way through the strategy-making, strategy-executing processes
D. Because doing these tasks helps executives develop an appropriate strategic vision,
strategic intent, and set of strategic objectives
E. Because of the contribution they make to maximizing value for shareholders
Total quality management (TQM) programs:
A. deal exclusively with procedures to achieve defect-free manufacturing and assembly.
B. nearly always contribute more to the achievement of operating excellence than either
business process reengineering or Six Sigma quality control techniques.
C. entail creating a corporate culture bent on continuously improving the performance
of every task and every value chain activity.
D. are considerably more effective in improving manufacturing and assembly activities
than they are in improving such value chain activities as R&D, human resources
management, supply chain management, information technology, sales, and marketing
and finance.E. are generally considered the best tool for reengineering strategy-critical
business processes.
Determining how strong the threat of substitutes will be entails:
A. identifying the relative price/performance relationship of the substitutes, the
switching costs, and the overall buyer demand for the substitute.
B. identifying the attractiveness of other industries.
C. measuring Coke as a substitute for Pepsi and applying dynamic simulation modeling
techniques.
D. adopting a substitute product concentration factor to the buyer volume.E. judging
whether industry members are capable of self-manufacturing their products.
A sustainable competitive advantage is gained:
A. when a company has durable competitive assets that are central to its strategy and
superior to those of rival firms.
B. when a company has sufficient resources to expedite its strategy.
C. when a company realizes its inherent weaknesses are transformable to advantages.
D. when a company can stand out relative to rivals because of resource utilization.
E. when a company has resources in well-populated geographical locations
Which of the following does NOT facilitate strategy execution?
A. Hyundai service centers follow same routines when receiving vehicles for servicing.
B. Ford encourages staff to skip practices out of sync with the company’s mission.
C. General Motors showrooms have similar operating practices across regions.
D. Chevrolet Service center replicates the caliber of customer service across locations.
E. Renault is averse to standardization of the way activities are performed at its service
centers.
One of the big weaknesses of organization structures that do not have cross-business
collaboration is:
A. making it hard to effectively empower employees.
B. making it difficult to have closely related activities report to a single executive.
C. that pieces of strategically relevant activities and capabilities often end up scattered
across many departments, with each pursuing its own priorities, projects, and agendas.
D. impeding the use of outsourcing.
E. making it hard to fix managerial accountability for poor results.
A pitfall to avoid in pursuing a differentiation strategy is:
A. trying to differentiate on the basis of attributes or features that are easily and quickly
copied.
B. choosing a product offering that supports buyers’ indifference to rival brands’
offerings.
C. charging a premium price for the differentiating features.
D. meeting and exceeding the meaningful gaps in quality, performance, service, and
other attractive differentiating attributes offered by rivals.
E. spending on activities to differentiate the company’s product to enhance profitability.
What is the function of the Global Reporting Initiative?
A. It promotes greater transparency and facilitates benchmarking CSR efforts across
firms and industries.
B. It promotes and establishes mutual funds investment opportunities comprised of
companies that excel on the basis of the triple bottom line.
C. It promotes greater awareness of the Dow Jones World Index, which comprises
companies that are engaged in environment sustainability.
D. It promotes corporate governance, climate change, and labor practices.
E. It is a nonprofit reporting organization that ranks companies on habitat protection.
What does a company specifically exhibit when it relentlessly pursues an ambitious
strategic objective, concentrating the full force of its resources and competitive actions
on achieving that objective?
A. Competitive edge.
B. Sustainable advantage.
C. Strategic intent.
D. Financial strength.
E. Strategic vision.
Strategic offensives should, as a general rule, be based on:
A. exploiting a company’s strongest competitive assets-its most valuable resources and
capabilities.
B. instigating and executing the chosen strategy efficiently and effectively.
C. scoping and scaling an organization’s internal and external situation.
D. molding an organization’s character and identity.
E. satisfying the buyer’s needs that the company seeks to meet.
Focused strategies keyed either to low cost or differentiation are especially appropriate
for situations where:
A. the market is composed of distinctly different buyer groups who have different needs
or use the product in different ways.
B. most other rival firms are using a best-cost producer strategy.
C. buyers have strong bargaining power and entry barriers are low.
D. most industry rivals have weakly differentiated products.
E. most industry participants are also using a focused differentiation strategy.
What are value drivers?
A. A set of factors (analogous to cost drivers) that are particularly effective in having a
strong differentiation effect
B. A firm’s hidden success factor for creating over-the-top product features that will
command the highest price in the industry
C. A technique for easily identifying factors that validate a firm’s performance
D. A set of factors that verify the unique nature of a firm
E. A set of guidelines for identifying the most promising upscale attributes to
incorporate into a product