A company that promotes carpooling among its employees, has cut its printer-paper
usage in half, and has installed solar panels on its roof is an example of a corporate
social responsibility action to:
A. promote workforce diversity.
B. ensure the company operates honorably and ethically.
C. support philanthropy and participate in community service.
D. protect and sustain the environment.
E. enhance workplace amenities and employee well-being.
A company can best accomplish diversification into new industries by:
A. outsourcing most of the value chain activities that have to be performed in the target
business/industry.
B. acquiring a company already operating in the target industry, creating a new business
from scratch, or forming a joint venture with one or more companies to enter the target
industry.
C. integrating forward or backward into the target industry.
D. shifting from a strategic group comprised mostly of single-business companies to a
strategic group comprised of diversified companies.
E. employing an offensive strategy with new product innovation as its centerpiece.
To improve performance, there are many different avenues for outcompeting rivals such
as:
A. realizing a higher cost structure and lower operating profit margins than rivals in
order to drive sales growth.
B. creating products analogous with competitors so as to be competitive in the same
markets.
C. pursuing similar personalized customer service or quality dimensions as rivals.
D. confining operations to local or regional markets or developing product superiority
or concentrating on a narrow product lineup.
E. strengthening competitiveness by restricting strategic alliances and collaborative
partnerships when compared to rivals.
Which of the following is NOT a typical characteristic of a weak company culture?
A. A lack of values and principles that are consistently preached or widely shared
B. A tendency among employees to view their jobs as just a way of making a living
C. Co-worker peer pressure to do things in a particular way
D. Few widely revered traditions and few culture-induced norms
E. No strong employee allegiance to what the company stands for or to operating the
business in well-defined ways
Which of the following is NOT true of a company that succeeds in differentiating its
product offering from those of its rivals?
A. It can avoid having to compete on the basis of simply a low price.
B. It commands a premium price for its product.
C. It usually increases unit sales.
D. It gains buyer loyalty to its brand.
E. It attracts mainly price-conscious buyers.
Which of the following statements about developing organizational competencies and
capabilities is FALSE?
A. Core competencies or capabilities are most often bundles of skills and know-how
that grow out of the combined efforts of cross-functional work groups and departments
performing complementary activities at different locations in a firm’s value chain.
B. Evolving changes in customer needs and competitive conditions often require
tweaking and adjusting a company’s portfolio of competencies and intellectual capital to
keep its capabilities freshly honed and on the cutting edge.
C. Normally, core competencies and competitive capabilities emerge incrementally as a
company (1) acts to bolster skills that contributed to earlier successes, or (2) acts to
respond to customer problems, new technological or market opportunities, and the
competitive maneuvers of rivals.
D. Building organizational capabilities is best and most cost-effectively accomplished
by hiring a cadre of people with the right talent and expertise, putting them together in a
single work group, and then teaming the work group with key strategic allies/partners to
mesh the skills, expertise, and competencies needed to perform the desired capabilities
with some proficiency.
E. The key to leveraging a core competence into a distinctive competence (or
transforming a capability into a competitively superior capability) is concentrating more
effort and talent than rivals on deepening and strengthening the competence or
capability so as to achieve the dominance needed for competitive advantage.
The essence of a broad differentiation strategy is to:
A. appeal to the high-end part of the market and concentrate on providing a
top-of-the-line product to consumers.
B. incorporate a greater number of differentiating features into its product/service than
rivals.
C. lower buyer switching costs.
D. outspend rivals on advertising and promotion in order to inform and convince buyers
of the value of its differentiating attributes.
E. offer unique product attributes in ways that are valuable and appealing and that
buyers consider worth paying for.
A good example of vertical integration is a:
A. global public accounting firm acquiring a small local or regional public accounting
firm.
B. large supermarket chain getting into convenience food stores.
C. crude oil refiner purchasing a firm engaged in drilling and exploring for oil.
D. hospital opening up a nursing home for the aged.
E. railroad company acquiring a trucking company specializing in long-haul freight.
Relative market share is:
A. calculated by dividing a company’s percentage share of total industry sales volume
by the percentage share held by its largest rival.
B. calculated by adjusting a company’s revenue share up or down by a factor
proportional to whether their quality/customer service factors are above/below industry
averages.
C. calculated by dividing a company’s market share (based on dollar volume) by the
industry-average market share.
D. particularly useful in identifying cash cows, which have big relative market shares
(above 1.0), and cash hogs, which have low relative market shares (below 0.5).
E. calculated by subtracting the industry-average market share (based on revenue) from
the company’s market share to highlight relative share above/below the industry
average. This amount is a better indicator of a business’s competitive strength than is
just looking at the firm’s market share percentage.
Which of the following does NOT define an unethical and greed-driven culture?
A. Company managers and staff have little regard for ethical standards.
B. Company executives are driven by greed and ego gratification.
C. Executives exude an “ends-justify-the-means” mentality in pursuing overambitious
operating and financial targets.
D. Companies adopt accounting principles that make their financial performance appear
better than it really is.
E. Frontline employees display high-performance behaviors and a passion for making
the company successful.
The customer value proposition lays out the company’s approach to:
A. meeting profitability guidelines without the risk of losing customers.
B. operating efficiently given the current level of customers.
C. embracing rival company approaches to gaining customers.
D. satisfying customer wants and needs at a price customers will consider a good
value.E. assuring that the company makes enough profits based on its per-unit cost.
The advantages of using a licensing strategy to participate in foreign markets include:
A. being especially well-suited to achieve scale economies.
B. being able to charge lower prices than rivals.
C. being able to achieve first-mover advantages quickly and easily.
D. being able to leverage the company’s technical know-how, appealing brand, or
patents without committing their resources or capabilities to foreign markets.
E. being able to achieve higher product quality and better product performance than
with an export strategy.
The most important symbolic actions are those that top executives take to:
A. lead by example.
B. lead by influence.
C. follow by example.
D. follow the majority.
E. lead to the contrary.
Which of the following is true of ethical relativism?
A. Concepts of ethically right and ethically wrong are relative across countries and
cultures but are universal within countries or cultures.
B. Individuals and businesses have a basic right to “moral free space” and it is
inappropriate to specify ethically permissible and ethically impermissible actions and
behaviors.
C. There are important occasions when local cultural norms and morality and the
circumstances of the situation determine whether certain behaviors are right or wrong,
for there are no absolutes when it comes to business ethics.
D. Concepts of right and wrong as applied to business situations are always a function
of each company’s own set of values, beliefs, and ethical convictions (as stated in the
company’s code of ethical conduct).
E. Standards of what is ethically right and ethically wrong as applied to business
behavior are determined solely by whatever business norms prevail in a particular
company’s home country and are applicable to its operations in all other countries.
Which of the following is NOT a characteristic of a network structure?
A. It ensures that the right partners are included and the activities are coordinated.
B. It encourages a more effective collaboration and cooperation among partners.
C. It includes a hand-picked, integrated network of suppliers.
D. It is an arrangement of independent organizations involved in a common
undertaking.
E. It established that no one firm has a central control over the others.
Good strategy execution requires which of the following?
A. Putting those resources and capabilities into place, strengthening them as needed,
and then modifying them as market conditions evolve
B. A universal business model to raise profits and lower costs
C. Strengthening the competitive environment arena outside the company’s operating
territory
D. A planned budget to protect the company’s financial condition and eliminate wasteful
use of cash
E. Passive pressures stemming from the dominance of outside market buyers
Identify and describe ways that policies and procedures facilitate strategy execution.
To ensure the proficient implementation of strategy in an organization, top-level
executives can best achieve this by delegating authority to middle and lower-level
managers and by creating a sense of empowerment among employees. True or false?
Explain and justify your answer.
Competitive markets are economic battlefields. True or false? Explain.
Identify at least three benefits of constructing a strategic group map.
What are the advantages of strategic alliances and collaborative partnerships with key
suppliers?
What does the industry attractiveness test involve in evaluating a diversified company’s
business lineup? Why is it relevant?
Identify and briefly describe a local company’s strategic options in competing against
global challengers.
Ali is a business unit head of a soap manufacturing company. Explain the strategy he
could use to strengthen his market position and build a competitive advantage over his
rivals. Differentiate between his strategy and a corporate strategy.
Identify and briefly discuss four steps that managers can take to change a culture that is
out of step with the company’s strategy.
Identify and briefly explain any two of the factors that influence the strength of
competition from substitute products.