Which of the following is NOT a typical strategic objective or benefit that drives
mergers and acquisitions?
A. To gain quick access to new technologies or other resources and capabilities
B. To create a more cost-efficient operation out of the combined companies
C. To expand a company’s geographic coverage
D. To facilitate a company’s shift from a broad differentiation strategy to a focused
differentiation strategy
E. To extend a company’s business into new product categories
A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign
markets:
A. is competitively disadvantaged when the U.S. dollar declines in value against the
currencies of the countries to which it is exporting.
B. is largely unaffected by fluctuating exchange rates. It would, however, be affected if
its plants were in foreign countries.
C. becomes more competitive in foreign markets when the U.S. dollar gains in value
against the currencies of the countries to which it is exporting.
D. becomes more competitive in foreign markets when the U.S. dollar declines in value
against the currencies of the countries to which it is exporting.
E. has no interest in whether the dollar grows stronger or weaker versus foreign
currencies unless it is competing only against companies located in foreign countries.
Achieving a sure cost advantage over rivals entails:
A. concentrating on the primary activities portion of the value chain and outsourcing all
support activities.
B. being a first-mover in pursuing backward and forward integration and controlling as
much of the industry value chain as possible.
C. selling a mostly standard product and increasing the scale of operation.
D. minimizing R&D expenses and paying below-average wages and salaries to
conserve on labor costs.
E. producing a standard product, redesigning the product infrequently, and having
minimal advertising.
Which of the following statements about the ethical relativism school of thinking is
FALSE?
A. In a multinational company, application of ethical relativism equates to multiple sets
of ethical standards.
B. There are few absolutes when it comes to business ethics and thus few ethical
absolutes for consistently judging a company’s conduct in various countries and
markets.
C. When there are cross-country or cross-cultural differences in ethical standards, it is
appropriate for ethical standards in a company’s home market to take precedence over
what the local ethical standards may be.
D. A company that adopts the principle of ethical relativism and holds company
personnel to local ethical standards necessarily assumes that what prevails as local
morality is an adequate guide to ethical behavior.
E. According to the ethical relativism school of thinking, a “one-size-fits-all” template
for judging the ethical appropriateness of business actions and the behaviors of
company personnel does not exist.
The managerial task of effectively conveying the essence of the strategic vision is made
easier by:
A. having operating strategies that are easy for company personnel to understand and
execute.
B. combining the strategic vision and the company’s values statement into a single
document.
C. adopting a catchy slogan and then using it repeatedly to illuminate the direction and
purpose of “where we are headed and why.”
D. waiting until the company realizes its mission and ensures the existing corporate
culture is compatible with the new vision and direction.
E. distributing written statements that explain “where we are going and why.”
Which of the following is NOT a factor analyzed and relied on by firms when
developing competitive strength in a foreign market?
A. The relative size of the market, its growth potential, and the nature of domestic
buyers’ needs and wants
B. The availability, quality, and cost of raw materials and other inputs that firms will
require to produce their products and services
C. The development of different styles of management, organization, and strategy
D. The degree of collaboration with key suppliers and the greater the knowledge
sharing throughout the related-industry cluster
E. The level of industry-related support activities to foster customization of products
and services
Where industries are more likely to develop competitive strength depends on a set of
factors summarized in the Diamond of National Competitive Advantage. The factors
include:
1) Demand conditions: The demand conditions in an industry’s home market include the
relative size of the market, its growth potential, and the nature of domestic buyers’
needs and wants.
2) Factor conditions: Factor conditions include the availability, quality, and cost of raw
materials and other inputs (called factors of production) that firms in an industry require
for producing their products and services.
3) Related and supporting industries: The advantage to firms that develop as part of a
related-industry cluster comes from the close collaboration with key suppliers and the
greater knowledge sharing throughout the cluster, resulting in greater efficiency and
innovativeness.
4) Firm strategy, structure, and rivalry: Different country environments foster the
development of different styles of management, organization, and strategy.
Which of the following is an integral part of the managerial process of crafting and
executing strategy?
A. Developing a proven business model
B. Deciding how much of the company’s resources to employ in the pursuit of
sustainable competitive advantage
C. Setting objectives and using them as yardsticks for measuring the company’s
performance and progress
D. Communicating the company’s values and code of conduct to all employees
E. Deciding on the company’s strategic intent
Greenfield ventures, like all market entry strategies can pose serious problems to
achieving foreign market entry success. What is NOT deemed a barrier to success?
A. Such ventures can require costly capital investments.
B. Such ventures can have a tendency to divert valuable resources from current
business.
C. Such ventures really need well-functioning strong markets.
D. Such ventures are the fastest entry route to achieve a sizeable market share.E. Such
ventures require legal protections of foreign investors.
The real purpose of the company’s strategic vision:
A. is management’s story line for how it plans to implement and execute a profitable
business model.
B. sets forth what business the company is presently in and why it uses particular
operating practices in trying to please customers.
C. serves as management’s tool for giving the organization a sense of direction.
D. defines “who we are and what we do.”
E. spells out a company’s strategic intent, its strategic and financial objectives, and the
business approaches and operating practices that will underpin its efforts to achieve
sustainable competitive advantage.
Which of the following is NOT a characteristic of an effectively worded strategic vision
statement?
A. Directional (is forward-looking, describes the strategic course that management has
charted that will help the company prepare for the future)
B. Easy to communicate (is explainable in 5-10 minutes, and can be reduced to a
memorable slogan)
C. Graphic (paints a picture of the kind of company management is trying to create and
the market position(s) the company is striving to stake out)
D. Consensus-driven (commits the company to a “mainstream” directional path that
almost all stakeholders will enthusiastically support)
E. Focused (provides guidance to managers in making decisions and allocating
resources)
Company managers can significantly advance the cause of superior strategy execution
by doing all of the following EXCEPT:
A. employing best practices methods and using process management tools to drive
continuous improvement in how internal operations are conducted.
B. adopting benchmarking of the company’s operating activities and business processes
against “best-in-industry” and “best in world” performers.
C. adopting “best-in-company” operating activities and processes when a company’s
various organizational units are performing the same functions differently.
D. instituting operating practices that generate economies of scale and scope with
current value chain activities.
E. develop performance yardsticks for judging effectiveness and efficiency for
particular value chain activities and business processes deemed strategically critical.
Which of the following is NOT characteristic of a compensation and reward system
designed to help drive successful strategy execution?
A. Tying incentives to performance outcomes directly linked to good strategy execution
and financial performance
B. Keeping the time between achieving the target performance outcome and the
payment of the reward as short as possible
C. Making sure that the performance targets that each individual or team is expected to
achieve involve outcomes that the individual or team can personally affect
D. Providing generous rewards for people who turn in outstanding performances
E. Offering rewards that amount to 3 percent of an employee’s total compensation
The strategic impetus for forward vertical integration is to:
A. gain better access to end users and better market visibility.
B. achieve the same scale economies as wholesale distributors and/or retail dealers.
C. control price at the retail level.
D. bypass distributors and dealers and sell direct to consumers at the company’s
website.E. build a core competence in mass merchandising.
What hurdles are present in calculating industry attractiveness scores?
A. Deciding on the appropriate weights for the attractiveness measures
B. Different analysts use different weights for the different attractiveness measures
C. Gaining sufficient command of the industry to assign more accurate and objective
ratings
D. Deciding the impact of strategic fits to unrelated and related diversification
E. Deciding whether a business is related or unrelated
A company exhibits strategic intent when:
A. management crafts and adopts a strategic plan.
B. it relentlessly pursues an ambitious strategic objective, concentrating the full force of
its resources and competitive actions on achieving that objective.
C. it aggressively pursues financial objectives, establishing a priority on meeting the
performance metrics and instilling a sense of urgency throughout the company.
D. management establishes a comprehensive set of financial objectives that meet
stockholder expectations.
E. it capitalizes on its primary competitive advantage and ensures resources are
allocated to maintain its strategy.
The generic types of competitive strategies include:
A. market share growth provider, sales revenue leader strategy, and market share
retention strategy.
B. offensive strategies, defensive strategies, and counter maneuvers strategies.
C. low-cost provider, broad differentiation, best-cost provider, focused low-cost, and
focused differentiation strategies.
D. low-cost/low-price strategies, high-quality/high-price strategies, and medium
quality/medium price strategies.
E. price leader strategies, price follower strategies, technology leader strategies, and
first-mover strategies.