Which one of the following is not an accurate attribute of an organization’s strategic
vision?
A. A clearly articulated view of “where we are going”
B. Describing the company’s future product-customer-market-technology focus
C. Pointing an organization in a particular direction and charting a strategic path for it
to follow
D. Providing managers with a reference point for making strategic decisions
E. Outlining how the company intends to implement and execute its business model
The contention that ethical standards should be governed both by (1) a limited number
of universal ethical principles that are widely recognized as putting legitimate ethical
boundaries on actions and behavior in all situations and (2) the circumstances of local
cultures, traditions, and shared values that further prescribe what constitutes ethically
permissible behavior and what does not are the basic principles of
A. the school of ethical relativism.
B. the school of ethical universalism.
C. integrative social contracts theory.
D. the global corruption standards published by Transparency International.
E. the Global Code of Ethical and Social Morality developed by the United Nations.
Conclusions about what the priorities should be for allocating resources to the various
businesses of a diversified company need to be based on such considerations as
A. each business’s profit and growth prospects.
B. industry attractiveness and competitive strength of the various businesses.
C. the degree of strategic fit and resource fit with other business units.
D. each business’s cash flow characteristics and return on capital invested.
E. All of these.
Proficient strategy execution requires executive managers to
A. be current with events and closely monitor progress, put constructive pressure on the
organization for operating excellence, and initiate corrective action when necessary to
improve performance and achieve desired results.
B. understand all the tasks required to implement the strategy so as to ensure staff will
not shortchange any strategic-critical activity.
C. attach great importance to gathering statistics that define every task effort and ensure
limited variability.
D. initiate a problem-solving search to ensure obstacles to success are identified.
E. All of these.
When industry attractiveness ratings are calculated for each of the industries a
multibusiness company has diversified into, the results help indicate
A. which industries appear to be the most and least attractiveness from the standpoint of
the company’s long-term performance.
B. which industries have attractive key success factors and which industries have
unattractive key success factors.
C. which industries have the biggest economies of scale and which industries have the
greatest economies of scope and the overall potential for cost reduction in the industries
as a group.
D. which industries are most attractive from the standpoint of long-term growth and the
growth prospects of all the industries as a group.
E. which industries are most attractive from the standpoint of industry driving forces
and competitive forces.
Examples of important cost drivers in a company’s value chain do not include:
A. input costs.
B. capacity utilization.
C. learning and experience.
D. production technology and design.
E. customer service.
Company objectives
A. are needed only on a companywide basis related to a company’s short-term and
long-term profitability.
B. need to be broken down into performance targets for each of its separate businesses,
product lines, functional departments, and individual work units.
C. play the important role of establishing the direction in which it needs to be headed.
D. are important because they help guide managers in deciding what the company’s
strategy map should look like.
E. should be set in a manner that does not conflict with the performance targets of
lower-level organizational units.
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.
Which of the following is not generally something that ought to be considered in
evaluating the attractiveness of a diversified company’s business makeup?
A. Market size and projected growth rate, industry profitability, and the intensity of
competition
B. Industry uncertainty and business risk
C. The frequency with which strategic alliances and collaborative partnerships are used
in each industry, the extent to which firms in the industry utilize outsourcing, and
whether the industries a company has diversified into have common key success factors
D. Seasonal and cyclical factors, resource requirements, and whether an industry has
significant social, political, regulatory, and environmental problems
E. The presence of cross-industry strategic fits
Reengineering how a firm performs a business process
A. is a tool for pulling the pieces of strategy-critical processes out of different
departments and unifying their performance in a single department or cross-functional
work group.
B. is the most frequently used tool of total quality management (TQM).
C. requires that a company have many strategic partnerships and alliances with
outsiders.
D. is typically cheaper and easier-to-do than using Six Sigma techniques to achieve the
same cost savings.
E. is usually a company’s most important “best practice” for achieving operating
excellence.
The best test of whether potential entry is a strong or weak competitive force is
A. the strength of buyer loyalty to existing brands.
B. whether the industry’s driving forces make it harder or easier for new entrants to be
successful.
C. whether the strategies of industry members are well matched to the industry’s key
success factors.
D. whether the industry offers an opportunity for a blue ocean strategy.
E. to ask if the industry’s growth and profit prospects are strongly attractive to potential
entry candidates.
As a rule, the stronger the collective impact of competitive pressures associated with
the five competitive forces,
A. the stronger are the industry’s driving forces.
B. the lower the combined profitability of industry members.
C. the fewer companies that can achieve a competitive advantage via anything other
than being the industry’s low-cost leader.
D. the larger the number of competitive advantage opportunities for industry members.
E. the greater the number of industry key success factors.
The most important aspect(s) of a company’s business strategy
A. are the actions and moves in the marketplace that managers take to gain a
sustainable competitive advantage.
B. is figuring out how to maximize profits and shareholder value.
C. concerns how to improve the efficiency of its business model.
D. deals with how management plans to maximize profits while, at the same time,
operating in a socially responsible manner.
E. is figuring out how to become the industry’s low-cost provider.
In which of the following instances is retrenching to a narrower diversification base not
likely to be an attractive or advisable strategy for a diversified company?
A. When a diversified company has businesses that are weakly positioned in their
respective industries and are struggling to earn a decent return on investment
B. When a diversified company has too many cash cows
C. When one or more businesses are cash hogs with questionable long-term potential
D. When businesses in once-attractive industries have badly deteriorated
E. When a diversified company has businesses that have little or no strategic or
resource fits with the “core” businesses that management wishes to concentrate on
Which of the following is not something a company’s strategy is concerned with?
A. Management’s choices about how to attract and please customers
B. Management’s choices about how quickly and closely to copy the strategies being
used by successful rival companies
C. Management’s choices about how to grow the business
D. Management’s choices about how to outcompete rivals
E. Management’s action plan for conducting operations and improving the company’s
strategic and financial performance
A creative, distinctive strategy that sets a company apart from rivals and that gives it a
sustainable competitive advantage
A. is a reliable indicator that the company has a profitable business model.
B. is a company’s most reliable ticket to above-average profitability.
C. signals that the company has a bold, ambitious strategic intent that places the
achievement of strategic objectives ahead of the achievement of financial objectives.
D. is the best indicator that the company’s strategy and business model are
well-matched and properly synchronized.
E. All of these.
Which of the following is not a typical option that companies have to consider to tailor
their strategy to fit the circumstances of emerging country markets?
A. Prepare to compete on the basis of low price
B. Be prepared to modify aspects of the company’s business model to accommodate
local circumstances (but not so much that the company loses the advantage of global
scale and global branding)
C. Try to change the local market to better match the way the company does business
elsewhere
D. Develop a strategy for the short-term and forget about a long-term strategy because
conditions in emerging country markets change so rapidly
E. Stay away from those emerging markets where it is impractical or uneconomic to
modify the company’s business model to accommodate local circumstances
The competitive power of a company resource depends on
A. whether it helps differentiate a company’s product offering from the product
offerings of rival firms.
B. whether the resource is really competitively valuable, if it is rare and something
competitors lack, how hard it is to copy or imitate, and how easily it can be trumped by
the substitute resource strengths and competitive capabilities of rivals.
C. whether customers are aware of the resource and view it positively enough to boost
the company’s brand name reputation.
D. whether the resource is something rivals are unable to perform, if it is an important
differentiating product or service feature, how strongly it contributes to the company’s
brand image, and if it is the foundation of a cost-based advantage.
E. whether the resource is technology-based or based on superior marketing know-how.
Thinking strategically about industry and competitive conditions in a given industry
involves evaluating such considerations as
A. cultural, lifestyle, and demographic changes.
B. the birth of new industries, new knowledge, and disruptive technologies.
C. weather, climate change, and water shortages.
D. interest rates, exchange rates, unemployment rates, inflation rates, and economic
growth.
E. how often sellers alter their prices, how sensitive buyers are to price differences
among sellers, whether the item being purchased is a good or a service, and whether
buyers buy frequently or infrequently.
Which of the following best describes the market opportunities that tend to be most
relevant to a particular company?
A. Those market opportunities that provide avenues for taking market share away from
close rivals and enhance a company’s image as a leader in product innovation and
product quality
B. Those market opportunities that offer the company a chance to raise entry barriers
C. Those market opportunities that help promote greater diversification of revenues and
profits
D. Those market opportunities that match up well with the firm’s financial resources
and competitive capabilities, offer the best growth and profitability, and present the
most potential for competitive advantage
E. Those market opportunities that help correct a company’s biggest weaknesses and
competitive deficiencies
The advantages of using an export strategy to build a customer base in foreign markets
include
A. being able to minimize shipping costs, avoid tariffs, and curb the effects of
fluctuating exchange rates.
B. minimizing capital requirements and involvement in foreign markets.
C. being cheaper and more cost effective than licensing and franchising.
D. being cheaper and more cost effective than a multicountry strategy.
E. facilitating the establishment of profit sanctuaries in foreign countries and being
more suited to accommodating local buyer tastes than a global strategy.
Putting constructive pressure on the organization to achieve good results and operating
excellence entails
A. setting stretch objectives and creating an expectation that company personnel are to
do their best in achieving performance targets.
B. utilizing the full range of motivational techniques and compensation incentives to
reward high performance.
C. treating employees with dignity and respect.
D. encouraging employees to use initiative and creativity in performing their work.
E. All of these.
Once a company has decided to employ one of the five basic competitive strategies,
then it must also consider such additional strategic choices as
A. whether and when to go on the offensive and initiate aggressive strategic moves to
improve the company’s market position.
B. whether to outsource certain value chain activities or perform them in-house.
C. whether to form strategic alliances and collaborative partnerships to add to its
accumulation of resources and competitive capabilities.
D. whether to integrate forward or backward into more stages of the industry value
chain.
E. All of these
Identifying and appraising a company’s resource strengths and weaknesses and its
external opportunities and threats is called
A. SWOT analysis.
B. competitive asset/liability analysis.
C. competitive positioning analysis.
D. strategic resource assessment.
E. company resource mapping.
Which of the following is not a strategic disadvantage of vertical integration?
A. Vertical integration boosts a firm’s capital investment in the industry, thus increasing
business risk if the industry becomes unattractive later.
B. Integrating backward into parts and components manufacture can impair a
company’s operating flexibility when it comes to changing out the use of certain parts
and components.
C. Vertical integration limits a company’s ability to achieve greater product
differentiation and to exercise direct control over the costs of performing value chain
activities.
D. Forward or backward integration often calls for radically different skills and
business capabilities than the firm possesses.
E. Vertical integration poses all kinds of capacity-matching problems.
In a highly centralized organizational structure,
A. top executive retain authority for most strategic and operating decisions.
B. the thesis is that strict enforcement of detailed procedures backed by rigorous
managerial oversight is the most reliable way to keep the daily execution of strategy on
track.
C. tight control from the top makes it easy to fix accountability when things do not go
well.
D. one of the basic tenets is that most company personnel have neither the time nor the
inclination to direct and properly control the work they are performing and, further, that
they lack the knowledge and judgment to make wise decisions about how best to do
their work.
E. All of these.
Broad differentiation strategies generally work best in market circumstances where
A. buyer needs and preferences are too diverse to be fully satisfied by a standardized
product.
B. most buyers have similar needs and use the product in the same ways.
C. the products of rivals are weakly differentiated and most competitors are resorting to
clever advertising to try to set their product offerings apart.
D. buyers are price sensitive and buying switching costs are quite low.
E. the five competitive forces are strong.
A firm pursuing a best-cost provider strategy
A. seeks to be the low-cost provider in the largest and fastest-growing (or best) market
segment.
B. tries to have the best cost (as compared to rivals) for each activity in the industry’s
value chain.
C. tries to outcompete a low-cost provider by attracting buyers on the basis of charging
the best price.
D. seeks to deliver superior value to buyers by satisfying their expectations on key
quality/service/features/performance attributes and beating their expectations on price
(given what rivals are charging for much the same attributes).
E. seeks to achieve the best costs by using the best operating practices and
incorporating the best features and attributes.
The two most important parts of SWOT analysis are
A. pinpointing the company’s competitive assets and pinpointing its competitive
liabilities.
B. identifying the company’s resource strengths and identifying the company’s best
market opportunities.
C. identifying the external threats to a company’s future profitability and pinpointing
how many market opportunities it has.
D. drawing conclusions from the SWOT listings about the company’s overall situation
and translating these conclusions into strategic actions to better match the company’s
strategy to its resource strengths and market opportunities, correct the important
weaknesses, and defend against external threats.
E. making accurate lists of the company’s strengths, weaknesses, opportunities, and
threats and then using these lists as a basis for ascertaining how well the company’s
strategy is working.
Having good competitive intelligence about rivals’ strategies, latest actions and
announcements, resource strengths and weaknesses, and moves to improve their
situation is important because
A. it identifies who the industry’s current market share leaders are.
B. it helps a company to anticipate what moves rivals are likely to make next and to
craft its own strategic moves.
C. good scouting reports help identify which rival is in which strategic group.
D. it enables company managers to determine which rival has the worst strategy and
how to avoid making the same strategy mistakes.
E. it enables more accurate predictions about how long it will take a particular rival to
copy most of what the strategy leader is doing.
Building an organization capable of good strategy execution entails
A. staffing the organization, building core competencies and competitive capabilities,
and structuring the organization and work effort.
B. decentralizing authority for performing strategy-critical value chain activities,
establishing at least two distinctive competencies, and hiring talented employees.
C. investing heavily in employee training, using an empowered organization design and
organization structure in order to maximize labor productivity, and employing effective
incentive compensation systems.
D. centralizing authority in the hands of a chief strategy implementer so as to create the
leadership authority for driving implementation forward at a rapid pace.
E. empowering employees, maximizing internal operating efficiency, and optimizing
core competencies.
The principal managerial actions and initiatives undertaken in the strategy execution
process include which of the following?
A. Deciding how much to spend on employee training
B. Instituting policies and procedures that facilitate rather than impede effective
strategy execution
C. Doing an effective job of empowering employees
D. Revamping the value chain in a manner calculated to maximize operating efficiency
E. Selecting a capable top management team
Opportunities to differentiate a company’s product offering
A. are always dependent on the capabilities of the company’s R&D staff.
B. are more likely to be captured by highly skilled marketers.
C. can exist in supply chain activities, R&D, manufacturing activities, distribution and
shipping, or marketing, sales, and customer service.
D. usually are tied to product quality and durability and product reliability and
proliferation.
E. are most frequently attached to a product’s brand image, performance, and reliability.
Ethical relativism equates to multiple sets of ethical standards. True or false? Explain
your answer.
Answer:
Answer may vary
Draw a typical value chain for an entire industry. Why are the activities performed by
value chain allies strategically relevant?
Answer:
Answer may vary
Identify and describe two ways that policies and procedures aid the task of
implementing and executing strategy?
Answer:
Answer may vary
Discuss briefly what is meant by the terms “ethical universalism” and “ethical
relativism.” Where does integrative social contracts theory fit into the debate about
ethical standards? Which of the three schools of thought stands on the strongest
ground?
Answer:
Answer may vary
What are the eight components of strategy execution?
Answer:
Answer may vary
When is a global strategy ‘superior” to a multidomestic strategy?
Answer:
Answer may vary
Explain the difference between a centralized and a decentralized organization structure.
Which one is more likely to further the cause of good strategy execution? Why?
Answer:
Answer may vary
Why is it important for company managers to develop a “worry list” of strategic issues
and problems that they need to address and to resolve? What should they consider to
develop this list?
Answer:
Answer may vary
Identify and briefly discuss any three of the factors that influence the bargaining
strength and leverage of buyers.
Answer:
Answer may vary
What are industry key success factors? Why is it important for strategy makers to have
a clear understanding of an industry’s key success factors?
Answer:
Answer may vary
What is the business case for why a company should pursue ethical strategies?
Answer:
Answer may vary
Identify four tactics that are common among companies dedicated to staffing jobs with
the best people they can find.
Answer:
Answer may vary
List four reasons that strategic alliances and collaborative partnerships might fail to live
up to each partner’s expectations.
Answer:
Answer may vary
Identify and describe the interactions among the competitive forces that comprise the
five-forces model of competition. Which of these competitive forces is typically the
strongest? Explain.
Answer:
Answer may vary