Business Strategy Ch. 1 – Flashcards

Strategy is about competing differently. A. True B. False

A winning strategy must pass which three tests? A. The competitive advantage test, the cost test, and the value proposition test. B. The fit test, the competitive advantage test, and the cost test. C. The competitive advantage test, the cost test, and the value proposition test. D. The performance test, the cost test, and the value proposition test. E. The fit test, the competitive advantage test, and the performance test.

A company achieves a competitive advantage whenever it has some type of edge over rivals in attracting buyers and coping with competitive forces. A. True B. False

A company's mission is its action plan for outperforming its competitors and achieving superior profitability. A. True B. False

Management's blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit is known as the company's A. planned strategy. B. strategic plan. C. competitive map. D. business model. E. factor structure.

A company's strategy includes choices about: A. How to attract and please customers. How to minimize costs. How to manage executive compensation. B. How to attract and please customers. How to compete against rivals. How to position the company in the marketplace. C. How to achieve the company's performance targets. How to capitalize on attractive opportunities to grow the business. How to maximize shareholder wealth. D. How to minimize costs. How to maximize shareholder wealth. How to manage executive compensation. E. How to maximize shareholder wealth. How to compete against rivals. How to attract and please customers.

A company's customer value proposition is defined as A. P - C, where P is the price and C is the cost. B. V + P, where V is the value provided and P is the price. C. V - P, where V is the value provided and P is the price. D. V - C, where V is the value provided and C is the cost. E. V + C, where V is the value provided and C is the cost.

The nitty-gritty issue surrounding a company's business model is whether it can accurately specify its profit formula. A. True B. False

A company's strategy is its action plan for outperforming its competitors and achieving superior profitability. A. True B. False

The two crucial elements of a company's business model are A. its mission and its competitive strategy. B. its vision and its competitive strategy. C. its customer value proposition and its competitive strategy. D. its customer value proposition and its profit formula. E. its competitive strategy and its profit formula.

A company's strategy provides direction and guidance, in terms not only what the company should do, but also what it should not do. A. True B. False

Winning a sustainable competitive advantage over rivals involves both A. building competitively valuable expertise and capabilities that rivals cannot readily match and being first to market. B. having a distinctive product offering and being first to market. C. being first to market and maintaining the largest market share. D. building competitively valuable expertise and capabilities that rivals cannot readily match and having a distinctive product offering. E. having a distinctive product offering and maintaining the largest market share.

The biggest portion of most company's current strategies are A. defensive. B. emergent. C. reactive. D. deliberate. E. realized.

Which of the following are not elements to look for when trying to identify a company's strategy? A. Actions to strengthen the firm's bargaining position with suppliers, distributors, and others. B. Actions to gain sales and market share with lower prices based on lower costs. C. Actions to ensure that executive compensation levels match, or exceed, those of relevant competitors. D. Actions to strengthen market standing and competitiveness by acquiring or merging with other companies. E. Actions to enter new product or geographic markets or to exit existing ones.

The most telling signs of good management are A. good profitability and good market share. B. good market share and good profitability. C. good top management team stability and good share price. D. good executive compensation and good share price. E. good strategy and good strategy execution.

The evolving nature of a company's strategy means that the typical company strategy is a blend of ___________ activities. A. offensive and defensive B. proactive and reactive C. reactive and defensive D. proactive and defensive E. offensive and proactive

A company's current strategy in toto is commonly called its __________ strategy. A. reactive B. proactive C. realized D. emergent E. deliberate

Unplanned, reactive, and adaptive strategy adjustments make up which portion of the firm's strategy? A. Abandoned B. Realized C. Emergent D. Deliberate E. Fixed

A company's _____________ describes the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition. A. competitive strategy B. customer value proposition C. generic strategic D. profit formula E. cost chain

When a company possesses elements of a strategy that give buyers lasting reasons to prefer a company's products or services over those of competitors, it is said to have a A. tactical win. B. profit pool. C. competitive advantage. D. strategic barrier. E. sustainable competitive advantage.

__________ involves either giving buyers what they perceive as superior value compared to the offerings of rival sellers or giving buyers the same value as others at a lower cost to the firm. A. Profit B. Customer satisfaction C. Dominant market share D. Capital E. Competitive advantage

Which of the following are not among the four most frequently used and dependable strategic approaches to setting a company apart from rivals, building strong customer loyalty, and winning a competitive advantage? A. Focusing on a narrow market niche within an industry. B. Striving to be the industry's low-cost provider. C. Outcompeting rivals on the basis of differentiating features. D. Developing an advantage based on offering more value for the money. E. Providing a product that offers "something for everyone."

The profit formula reveals how efficiently a company can meet customer wants and needs and deliver on its value proposition. A. True B. False

A company's ______________ sets forth the logic for how its strategy will create value for customers, while at the same time generate revenues sufficient to cover costs and realize a profit. A. strategic plan B. factor structure C. competitive map D. planned strategy E. business model

The nitty-gritty issue surrounding a company's business model is whether it can execute its customer value proposition profitably. A. True B. False

The ____________ lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value. A. profit formula B. customer value proposition C. operating strategy D. cost system E. competitive advantage

A company's strategy does not include choices about which of the following? A. How to capitalize on attractive opportunities to grow the business. B. How best to respond to changing economic and market conditions. C. How to achieve the company's performance targets. D. How to maximize shareholder wealth. E. How to position the company in the marketplace.

A strategy only stands a chance of succeeding when it is predicated on actions, business approaches, and competitive moves aimed at appealing to buyers in ways that set a company apart from its rivals. A. True B. False

Which of the following is not a common reason why a company must be willing and ready to modify a strategy? A. Advancing technology. B. Unexpected moves by competitors. C. Managerial boredom. D. Shifting buyer needs. E. Emerging market opportunities.

____________ is a common defining characteristic that requires companies to repeatedly adapt their strategies. A. Problematic execution B. High-velocity industry change C. Market saturation D. Industry stagnation E. Sub-par profitability

The _____________ describes the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition. A. business model B. cost system C. value proposition D. profit formula E. operating margin