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
In evaluating whether the industry and competitive environment presents sufficiently
attractive prospects for both competitive success and attractive profits usually does
NOT involve a consideration of which of the following factors?
A. The industry’s growth potential and whether competitive pressures will likely grow
stronger or weaker, and whether strong competitive forces are squeezing industry
profitability to subpar levels
B. Whether the company occupies a stronger market position than rivals
C. Whether the industry’s future profitability will be favorably or unfavorably affected
by the prevailing driving forces
D. The severity of the macro-environment problems confronting the industry
E. Whether the industry’s product is strongly or weakly differentiated
Which of the following is NOT a tool or method that managers can use to promote
operating excellence and further the cause of good strategy execution?
A. Benchmarking
B. Business process reengineering
C. Strategic resource training
D. TQM and Six Sigma quality control techniques
E. Best practices
When a company’s social responsibility initiatives become part of the way it operates its
business every day, these initiatives are:
A. likely to be fully effective in creating a competitive advantage.
B. normally based on a corporate social agenda.
C. ambiguous and rarely make a difference in the way the company does business.
D. implausible to advance a positive, high-energy workplace environment.
E. heavily dependent on encouraging employee morality.
The managing director of a paper products company, wanted to introduce nonmonetary
incentives to enhance employee motivation and spur strategy execution. When
presented with some ideas, he chose all of the following EXCEPT:
A. rewarding employees even for subpar performance.
B. giving awards and public recognition to high performers and showcasing company
successes.
C. providing a comfortable and attractive working environment.
D. providing opportunities for promotion from within wherever possible.E. providing
attractive perks and fringe benefits.
The concept of strategic groups is relevant to industry and competitive analysis
because:
A. firms in the same strategic groups are rarely close competitors-a firm’s closest
competitors are usually in distant strategic groups.
B. strategic group maps help identify how each competing firm is positioned and the
relationship to their closest competitors.
C. competition grows in intensity as the number and diversity of the strategic groups in
an industry increases.
D. the profit potential of firms in the same strategic group is usually very similar.
E. competitive pressures tend to be weaker within strategic groups than across strategic
groups.
A low-cost leader’s basis for competitive advantage is:
A. lowest possible prices for comparable products.
B. a low-cost/moderate price approach to gain the biggest market share.
C. high buyer switching costs.
D. meaningful lower overall costs than rivals on comparable products.
E. higher unit sales than rivals.
Which of the following questions is NOT something that company managers should
consider in choosing to pursue one strategic course or directional path versus another?
A. Are changing market and competitive conditions acting to enhance or weaken the
company’s business outlook?
B. Is the company stretching its resources too thinly by trying to compete in too many
markets or segments, some of which are unprofitable?
C. Will our present business generate sufficient growth and profitability in the years
ahead to please shareholders?
D. What market opportunities should the company pursue and which ones should not be
pursued?
E. Do we have a better business model than key rivals?
Economies of scope:
A. are cost reductions that flow from operating in multiple related businesses.
B. arise only from strategic fit relationships in the production portions of the value
chains of sister businesses.
C. are more associated with unrelated diversification than related diversification.
D. are present whenever diversification satisfies the attractiveness test and the
cost-of-entry test.
E. arise mainly from strategic fit relationships in the distribution portions of the value
chains of unrelated businesses.
A core competence:
A. detracts from a company’s arsenal of competitive capabilities and competitive assets
and is not a resource strength considered to be genuine.
B. is typically results-based, residing in a company’s tangible physical assets on the
balance sheet.
C. is often grounded in a single department’s set of knowledge and expertise.
D. is an activity that a firm performs proficiently that is also central to its strategy and
competitive success.
E. is a proficiently performed external activity.
The options for remedying a supplier-related cost disadvantage include:
A. pressuring suppliers for more favorable prices, switching to lower-priced substitute
inputs, and collaborating closely to identify mutual cost-saving opportunities.
B. instituting forward vertical integration.
C. shifting into the production of substitute products.
D. shifting from a low-cost leadership strategy to a differentiation or focus strategy.
E. cutting selling prices and trying to win a bigger market share.
The most difficult part of benchmarking is:
A. the decision of whether to do it at all.
B. how to gain access to information regarding rivals’ practices and costs.
C. when to initiate the process.
D. what information to utilize in the analysis process.
E. when to stop the process and move forward with strategy.
A weighted industry attractiveness assessment is generally analytically superior to an
unweighted assessment because:
A. a weighted ranking identifies which industries offer the best/worst long-term profit
prospects.
B. an unweighted ranking doesn’t discriminate between strong and weak industry
driving forces and industry competitive forces.
C. it does a more accurate job of singling out which industry key success factors are the
most important.
D. an unweighted ranking doesn’t help identify which industries have the easiest and
hardest value chains to execute.E. the various measures of attractiveness are not likely
to be equally important in determining overall attractiveness.
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.
Total quality management (TQM) emphasizes all of the following EXCEPT which?
A. 100 percent accuracy in performing tasks
B. Continuous improvement in all phases of operations
C. Adoption of industry standard operating practices
D. Benchmarking and total customer satisfaction
E. Empowerment of employees and team-based work design
Which of the following is the best example of a well-stated financial objective?
A. Increase earnings per share by 15 percent annually.
B. Gradually boost market share from 10 percent to 15 percent over the next several
years.
C. Achieve lower costs than any other industry competitor.
D. Boost revenues by a percentage margin greater than the industry average.E.
Maximize total company profits and return on investment.
In prescribing policies and procedures that facilitate independent action on the part of
empowered employees for good strategy execution companies need to do ALL of the
following EXCEPT:
A. give organization members clear direction and place reasonable boundaries on their
actions.
B. empower employees to act within the company’s set boundaries in pursuit of
company goals.
C. allow company personnel to act with some defined degree of freedom, especially
when individual creativity and initiative are more essential to good strategy execution
than standardization and strict conformity.
D. institute policies that give employees substantial leeway to carry out activities the
way they think best.
E. produce policy manuals on strategy execution that prescribe exactly how daily
operations are to be conducted.
What does the scope of the firm refer to?
A. The range of activities the firm performs externally and its social responsibility
activities
B. To gain competitive advantage based on where it locates its various value chain
activities
C. The firm’s capability to employ vertical integration strategies
D. The range of activities the firm performs internally and the breadth of its product
offerings, the extent of its geographic market, and its mix of businesses
E. To prevent foreign competition from affecting the market
Which of the following is NOT accurate as concerns a distinctive competence?
A. A distinctive competence is a competitively important activity that a company
performs better than its rivals.
B. A distinctive competence is typically less restrictive for rivals to copy than a core
competence.
C. A distinctive competence can be a basis for sustainable competitive advantage.
D. A distinctive competence qualifies as a superior internal strength.
E. A distinctive competence enables delivering stand-out value to customers (in the
form of lower prices, better product performance, or superior service).
If a company doesn’t possess standalone resource strengths capable of contributing to
competitive advantage:
A. all potential for competitive advantage is lost.
B. it is unlikely to survive in the marketplace and should exit the industry.
C. it may have a bundle of resources that can be leveraged to develop a distinctive
competence.
D. it is virtually blocked from using offensive strategies and must rely on defensive
strategies.
E. its best strategic option is to revamp its value chain in hopes of creating stronger
competitive capabilities.