Cavco Construction divests funds from its commercial property ventures to invest in
gated community properties close to New York, signaling a change of strategy. Which
of the following statements about Cavco is most likely true?
A. Cavco is impeding the efforts to proficiently execute the strategy.
B. Cavco is merely fine-tuning its existing strategy to test efficiency.
C. Cavco is marshalling resources to support new strategic initiative.
D. Cavco is hampering work climate conducive for good strategy execution.
E. Cavco is focusing on activities that are a low priority in the strategy execution effort.
Answer:
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.
Answer:
Strategic offensives should, as a general rule, be based on:
A. exploiting a company’s strongest competitive assetsits 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.
Answer:
Outsourcing strategies can offer such advantages as:
A. increasing a company’s ability to strongly differentiate its product and be successful
with either a broad differentiation strategy or a focused differentiation strategy.
B. obtaining higher quality and/or cheaper components or services, improving a
company’s ability to innovate, and reducing its risk exposure.
C. speeding a company’s entry into foreign markets.
D. permitting greater use of strategic alliances and collaborative partnerships.
E. giving a firm more direct control over the costs of value chain activities.
Answer:
Which one of the following is NOT an appropriate step management can take to change
a problem culture?
A. Identifying which aspects of the present culture are supportive of good strategy
execution and which ones are not
B. Specifying what new actions, behaviors, and work practices should be prominent in
the “new” culture
C. Appointing a team of key managers and employees to design a plan for cultural
change and then lead the internal effort to change the culture
D. Talking openly about the problems of the present culture and how new behaviors
will improve performance
E. Employing visible, forceful actionsboth substantive and symbolicto ingrain a new set
of behaviors, practices and cultural norms
Answer:
For an unrelated diversification strategy to produce financial results above that of
stand-alone entities, executives must do all of the following EXCEPT:
A. diversify into businesses that can produce consistently good earnings and returns on
investment and thereby satisfy the attractiveness test.
B. negotiate favorable acquisition prices (to satisfy the cost-of-entry test).
C. do a superior job of corporate parenting via high-level managerial oversight and
resource sharing, financial resource allocation and portfolio management, or
restructuring underperforming businesses (to satisfy the better-off test).
D. satisfy the attractiveness test, the cost-of-entry test, and the better-off test.
E. leverage the cross-business strategic fit advantage effectively
Answer:
A global strategy allows for:
A. the leading companies to compete for the biggest share of the world market, but only
occasionally compete head-to-head in different countries.
B. the markets in various countries to be part of the world market and competitive
conditions across country markets to be strongly linked.
C. a company’s overall market strength to be the sum of its market shares in each
country market where it has a presence.
D. the industry leaders to be foreign companies, while domestic companies are
relegated to runner-up status.
E. a firm’s overall competitive advantage to be determined by the size of the
competitive advantage it has in each of its profit sanctuaries.
Answer:
In which of the following situations is employing a “think local, act local”
multidomestic strategy highly questionable?
A. When a company desires to transfer competencies and resources across country
boundaries and is striving to build a single, uniform competitive advantage worldwide
B. When there are significant country-to-country differences in customer preferences
and buying habits industry is characterized by big economies of scale and strong
experience curve effects
C. When the trade restrictions of host governments are diverse and complicated
D. When there are significant country-to-country differences in distribution channels
and marketing methods
E. When host governments enact regulations requiring that products sold locally meet
strictly defined manufacturing specifications or performance standards
Answer:
What strategy is considered more conducive to transferring and leveraging subsidiary
skills and capabilities across borders?
A. A transnational strategy
B. An international strategy
C. A think-local, act-global strategy
D. A cross-border integrated strategy
E. A standardized integrated strategy
Answer:
A winning strategy is one that:
A. builds strategic fit, is socially responsible, and maximizes shareholder wealth.
B. is highly profitable and boosts the company’s market share.
C. fits the company’s internal and external situation, builds sustainable competitive
advantage, and improves company performance.
D. results in a company becoming the dominant industry leader.
E. can pass the ethical standards test, the strategic intent test, and the profitability test.
Answer:
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. 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. 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.
Answer:
Corporate strategy options for already diversified companies include all of the
following EXCEPT:
A. broadening the company’s business scope by making new acquisitions in new
industries.
B. divesting weak-performing businesses and retrenching to a narrower base of
business operations.
C. restructuring the company’s business lineup with a combination of divestitures and
new acquisitions to put a whole new face on the company’s business makeup.
D. pursuing growth opportunities within the existing business lineup.
E. pursuing certain acquisitions even if they have done badly or haven’t quite lived up
to expectations.
Answer:
A company’s culture is typically grounded in and shaped by:
A. its core competencies and competitive capabilities.
B. its long-term strategic success or lack thereof.
C. the degree to which top management is committed to achieving market leadership.
D. its core values and the bar it sets for ethical standards.
E. its strategic intent and its reward system.
Answer:
In doing SWOT analysis, which of the following is NOT an example of a potential
resource weakness or competitive deficiency that a company may have?
A. Less productive R&D efforts than rivals
B. Having a single, unified functional strategy instead of several distinct functional
strategies
C. Lack of a strong brand image and reputation (as compared to rivals)
D. Higher overall unit costs relative to rivals
E. Too narrow a product line relative to rivals
Answer:
Which of the following questions is NOT pertinent to company managers in thinking
strategically about what directional path should be taken by the company and about
developing a strategic vision?
A. Is the outlook for the company promising if it continues with its present product
offerings?
B. Are changing market and competitive conditions acting to enhance or weaken the
company’s prospects?
C. What business approaches and operating practices should we consider in trying to
implement and execute our business model?
D. What strategic course offers attractive opportunity for growth and profitability?
E. What, if any, new customer groups and/or geographic markets should the company
get in position to serve?
Answer:
Which of the following factors does NOT necessarily drive unethical managerial
behavior?
A. The pervasiveness of immoral and amoral businesspeople
B. Overzealous pursuit of personal gain, wealth, and other selfish interests
C. A company culture that puts the profitability and good business performance ahead
of ethical behavior
D. Heavy pressures on company managers to meet or beat earnings targets
E. Executive compensation independent of company performance
Answer:
Which of the following is NOT one of the principal components of strategic
significance in the PESTEL analysis?
A. Political factors including the extent to which government intervenes in the economy
B. Economic conditions that include the general economic climate and specific factors
such as interest rates, inflation rate, and unemployment rate, as well as conditions in the
stock and bond markets that can affect consumer confidence
C. Sociocultural forces including societal values, attitudes, cultural factors, and
lifestyles that impact business
D. Technological factors that include the pace of change and technical developments
that have the potential for impacting society
E. Environmental forces that include the competitive structure, the degree of industry
fragmentation, and the mobility barriers that inhibit business
Answer:
A pharmaceutical giant acquires a manufacturer of rare specialty drugs to improve its
falling share prices and invests all its wealth into the deal. Due to a deficit, it agrees to
do a joint venture for the acquisition and involves a major automobile giant to fund the
deal. After a rocky start, the companies now have a strong market position and generate
good profits. Which of the following regarding the company’s strategy is true?
A. It fails the Performance test.
B. It fails the Competitive Advantage and the Fit tests.
C. It is a winning strategy.
D. It fails in all three tests.
E. It fails the Fit test, but passes the Competitive advantage and Performance tests.
Answer:
The strength of competitive pressures that suppliers can exert on industry members is
MAINLY a function of:
A. whether needed inputs are in short supply and whether suppliers provide
differentiated input that enhances performance of the product.
B. whether suppliers self-manufacture what they supply or source their items from other
manufacturers.
C. whether the industry’s position in the growth cycle is favorable.
D. whether technological change in the businesses of suppliers is rapid or slow.
E. whether the needs and expectations of supplier-seller relationships are changing
slowly or rapidly.
Answer:
Which of the following is NOT a good example of a substitute product that triggers
stronger competitive pressures?
A. A salad as a substitute for French fries
B. Wireless phones as a substitute for wired telephones
C. Coca-Cola as a substitute for Pepsi
D. Snowboards as a substitute for snow skis
E. Video-on-demand services from a cable TV company as a substitute for going to the
movies
Answer:
Which of the following areas within a company’s total value chain system can managers
use to improve efficiency and effectiveness?
A. A company’s own internal activity segments, the suppliers’ part, and the forward
(distribution) channel portion of the value chain system
B. A company’s reinforced activities identified as efficiency measures for improved
effectiveness
C. Only the internal activity segments
D. Only the suppliers’ part
E. Only the distributors’ channel portion
Answer:
A “balanced scorecard” that includes both strategic and financial performance targets is
a conceptually strong approach for judging a company’s overall performance because:
A. it assists managers in putting roughly equal emphasis on short-term and long-term
performance targets.
B. it entails putting equal emphasis on good strategy execution and good business
model execution.
C. a balanced-scorecard approach pushes managers to avoid setting objectives that
reflect the results of past decisions and organizational activities.
D. financial performance measures are lagging indicators that reflect the results of past
decisions and organizational activities, whereas strategic performance measures are
leading indicators of a company’s future financial performance and business prospects.
E. it forces managers to put equal emphasis on financial and strategic objectives.
Answer:
A competitive environment where there is weak to moderate rivalry among sellers, high
entry barriers, weak competition from substitute products, and little bargaining leverage
on the part of both suppliers and customers:
A. lacks powerful driving forces.
B. gives each industry competitor the best potential for building sustainable competitive
advantage over rival firms.
C. makes it challenging for industry members to compete successfully unless they can
strongly differentiate their products.
D. is conducive to industry members earning attractive profits.
E. requires that industry members have low costs in order to be competitively
successful.
Answer:
The intensity of rivalry among competing sellers does NOT depend on whether:
A. the industry has more than two strong driving forces and whether the industry has
more than two diverse and capable strategic groups.
B. competitors are diverse in terms of long-term directions, objectives, strategies, and
countries of origin.
C. strong companies outside the industry have acquired weak firms in the industry and
are launching aggressive moves to transform the acquired companies into strong market
contenders.
D. one or two rivals have particularly powerful and successful strategies to grow the
business, attract and retain buyers, and develop a sustained competitive advantage.
E. industry conditions attract industry members to use price cuts or other competitive
weapons to boost total sales volume and market share.
Answer:
What two factors inhibit the ability of rivals to imitate a firm’s most valuable resources
and capabilities?
A. Social ambiguity and causal uncertainty
B. Social simplicity and causal complexity
C. Collective complexity and causal ambiguity
D. Social complexity and causal ambiguity
E. Social simplicity and causal uncertainty
Answer:
Which of the following is NOT a strategic choice that a company must make to
complement and supplement its choice of one of the five generic competitive strategies?
A. Whether to focus on building competitive advantages
B. Whether to employ the element of surprise as opposed to doing what rivals expect
and are prepared for
C. Whether to employ a market share leadership strategy
D. Whether to display a strong bias for swift, decisive, and overwhelming actions to
overpower
E. Whether to create and deploy company resources to cause rivals to defend
themselves
Answer:
One of the things that can be gleaned from a strategic group map of industry rivals is:
A. which rivals have been in business longer and thus have greater access to experience
curve effects.
B. which rivals have newer manufacturing facilities and thus have achieved greater
product quality.
C. which strategic groups have the highest profit margins and the highest customer
switching costs and thus represent key operating characteristics.
D. that some strategic groups are more favorably positioned than others because they
confront weaker competitive forces and/or because they are more favorably impacted
by industry driving forces.
E. which strategic groups are currently being shunned by customers because of high
prices and relatively low product quality.
Answer:
A focused low-cost strategy can lead to attractive competitive advantage when:
A. buyers are looking for the best value at the best price.
B. buyers are looking for a budget-priced product.
C. buyers are price sensitive and are attracted to brands with low switching costs.
D. a market is emerging and demand in the target market niche is growing rapidly and
is served by industry-wide competitors
E. a firm can lower costs significantly by limiting its customer base to a well-defined
buyer segment.
Answer:
Companies racing for global market leadership:
A. generally have to consider establishing competitive positions in the markets of
emerging countries.
B. are well-advised to avoid all the risks and problems of competing in emerging
country markets.
C. seldom have the resource capabilities it takes to be effective in competing in
emerging country markets and usually are at a strong competitive disadvantage to the
domestic market leaders.
D. can usually be expected to earn sizable profits quickly in emerging country markets.
E. usually encounter very low barriers in entering the markets of emerging countries.
Answer:
The big danger or risk of a best-cost provider strategy is:
A. that buyers will be highly skeptical about paying a relatively low price for upscale
attributes/features.
B. not establishing strong alliances and partnerships with key suppliers.
C. that rivals with low-cost provider strategies will be able to steal away some
customers on the basis of a lower price, and high-end differentiators will be able to steal
away customers with the appeal of better product attributes.
D. that it will be unable to achieve top-notch quality at a rock-bottom cost.
E. becoming too highly integrated and not relying enough on outsourcing.
Answer:
Which of the following is NOT an example of leadership actions or managerial
practices taken to foster a results-oriented, high-performance culture?
A. Treating employees as valued partners
B. Utilizing people-management practices to build morale and foster pride
C. Setting stretch objectives and clearly communicating expectations for reaching
targets
D. Using motivational techniques and compensation incentives to inspire employees
E. Following a must-be-invented-here mindset
Answer:
Which of the following strategies identifies a multidomestic approach?
A. Texas Instruments strongly encourages its trading partners to use the UN/EDIFACT
standard.
B. Hard Rock Cafes in Hawaii offer fish tacos and ahi tuna sandwich.
C. Coca Cola’s general market approach is controlled from Atlanta.
D. Nestle established its own distribution network in China.
E. Air Asia adapts its price to industry pressures.
Answer: