MGMT 425 Chapter 1

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Which of the following is not one of the central questions in evaluating a company’s business prospects?
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What are the key product or service attributes demanded by consumers?
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A company’s strategy concerns
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management’s action plan for running the business and conducting operations—its commitment to pursue a particular set of actions in growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations, and achieving targeted objectives.
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A company’s strategy consists of
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the competitive moves and business approaches that managers are employing to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve targeted objectives
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The competitive moves and business approaches a company’s management is using to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve organizational objectives is referred to as its
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strategy
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In crafting a strategy, management is in effect saying
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“among all the many different business approaches and ways of competing we could have chosen, we have decided to employ this particular combination of competitive and operating approaches in moving the company in the intended direction, strengthening its market position and competitiveness, and boosting performance.”
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A company’s strategy is most accurately defi ned as
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management’s commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, conducting operations, and improving the company’s fi nancial and market performance
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Company’s strategy is concerned with:
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-Management’s choices about how to grow the business -Management’s choices about how to compete successfully -Management’s action plan for conducting operations and improving the company’s financial and market performance -Management’s choices about how to attract and please customers
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Primary focus of a company’s strategy:
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-How to attract and please customers -How each functional piece of the business will be operated -How to compete successfully – How to grow the business
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In crafting a company’s strategy:
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managers need to come up with some distinctive “aha” element to the strategy that draws in customers and produces a competitive edge over rivals.
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A company’s strategy stands a better chance of succeeding when
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it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.
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The heart and soul of a company’s strategy-making effort
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involves coming up with moves and actions that produce a durable competitive edge over rivals.
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A company’s strategy and its quest for competitive advantage are tightly connected because
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crafting a strategy that yields a competitive advantage over rivals is a company’s most reliable means of achieving above-average profitability and financial performance.
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A company achieves sustainable competitive advantage when
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an attractive number of buyers have a lasting preference for its products or services as compared to the offerings of competitors.
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A creative, distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage
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is a company’s most reliable ticket to above-average profitability—indeed, the tight connection between competitive advantage and profitability means that the quest for sustainable competitive advantage always ranks center stage in crafting a strategy.
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What separates a powerful strategy from a run-of-the-mill or ineffective one is
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management’s ability to forge a series of moves, both in the marketplace and internally, that sets the company apart from rivals, tilts the playing fi eld in the company’s favor, and produces sustainable competitive advantage over rivals.
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frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage
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A) Striving to be the industry’s low-cost provider, thereby aiming for a cost-based competitive advantage B) Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority, or unusually good value for the money C) Developing expertise and resource strengths that give the company competitive capabilities that rivals can’t easily imitate or trump with capabilities of their own D) Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche
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One of the keys to successful strategy-making is
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to come up with one or more strategy elements that act as a magnet to draw customers and yield a lasting competitive edge.
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Things to look for in identifying a company’s strategy
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A) Actions to respond to changing market conditions or other external factors C) Actions to strengthen competitive capabilities and correct competitive weaknesses D) Actions to capture emerging market opportunities and defend against external threats to the company’s business prospects E) Actions to gain sales and market share via lower prices, more performance features, more appealing design, or other such actions.
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21. A company’s strategy evolves over time as a consequence of
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A) the need to keep strategy in step with changing market conditions and changing customer needs and expectations. B) the proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy. C) the need to abandon some strategy features that are no longer working well. D) the need to respond to the newly-initiated actions and competitive moves of rival firms.
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basic reasons that a company’s strategy evolves over time?
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B) The proactive efforts of company managers to fi ne-tune and improve one or more pieces of the strategy C) An ongoing need to abandon those strategy features that are no longer working well D) The need to respond to the actions and competitive moves of rival fi rms E) The need to keep strategy in step with changing market conditions and changing customer needs and expectations
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Changing circumstances and ongoing managerial efforts to improve the strategy
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A) account for why a company’s strategy evolves over time.
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A company’s strategy is a “work in progress” and evolves over time because of
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the ongoing need of company managers to react and respond to changing market and competitive conditions.
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It is normal for a company’s strategy to end up being
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a blend of proactive actions to improve the company’s competitiveness and fi nancial performance and as-needed reactions to unanticipated developments and fresh market conditions.
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Crafting a strategy involves
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stitching together a proactive/intended strategy and then adapting first one piece and then another as circumstances surrounding the company’s situation change or better options emerge.
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Which of the following statements about a company’s strategy is true?
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A company’s strategy is typically a blend of proactive and reactive strategy elements.
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A company’s strategy evolves from one version to the next because of
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the proactive efforts of company managers to improve this or that aspect of the strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms.
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Which one of the following does not account for why a company’s strategy evolves from one version to another?
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A desire on the part of company managers to develop new strategy elements on the fly
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In the course of crafting a strategy, it is common for management to
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A) decide to abandon certain strategy elements that have grown stale or become obsolete. B) modify the current strategy when market and competitive conditions take an unexpected turn or some aspects of the company’s strategy hit a stone wall. C) modify the current strategy in response to the fresh strategic maneuvers of rival fi rms. D) take proactive actions to improve this or that piece of the strategy.
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In choosing among strategy alternatives, company managers
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are well-advised to go beyond merely keeping a company’s strategic actions within the bounds of what is legal and consider whether the various pieces of the company’s strategy are compatible with ethical standards of “right” and “wrong” and duty—what a company should and should not do.
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A company’s strategy can be considered “ethical”
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if it does not entail actions or behaviors that cross the moral line from “can do” to “should not do” (because such actions are unsavory, unconscionable, injurious to others, or unnecessarily harmful to the environment) and if it allows management to fulfi ll its ethical duties to all stakeholders (shareholders, employees, customers, suppliers, the communities in which it operates, and society at large).
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A company’s strategy can be considered “ethical”
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if it does not entail actions or behaviors that cross the moral line from “can do” to “should not do” (because such actions are unsavory, unconscionable, injurious to others, or unnecessarily harmful to the environment).
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Actions employed by senior executives with strong ethical convictions
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A) Placing organizational checks and balances in place to monitor employee behaviors B) Clearly indicating all company personnel are expected to act with integrity C) Forbidding the pursuit of ethically questionable business opportunities E) Providing guidance to employees regarding gray areas related to ethical behaviors
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A company’s strategy can be considered “unethical” or shady
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A) if any of its actions constitute “unfair competition.” B) if the company engages in actions or behaviors that are contrary to the general public interest. C) if the company’s actions/behaviors are harmful to its stakeholders—customers, employees, shareholders, suppliers, and the communities in which the company operates. D) if it entails actions or behaviors that cross the moral line from “can do” to “should not do” (because such actions are “unsavory” or unconscionable or unnecessarily harmful to the environment).
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A company whose strategy has shady or unethical elements
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puts the reputation of the company and its top executives at risk and may even jeopardize the company’s long-term well-being and survival, especially if it is required to pay out considerable sums of money to settle punitive lawsuits and compensate customers, employees, shareholders, suppliers, rival companies and any others for the injuries they have suffered.
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In endeavoring to craft an ethical strategy, company managers
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have to go beyond what strategic actions and behaviors are legal and address whether all the various elements of the company’s strategy can pass the test of moral scrutiny.
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#38 A company’s business model
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is management’s storyline for how it will generate revenues ample to cover costs and produce a profi t—absent the ability to deliver good profi tability, the strategy is not viable and the survival of the business is in doubt.
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#39 A company’s business model
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A) zeros in on how and why the business will generate revenues suffi cient to cover costs and produce attractive profits and return on investment.
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40. A company’s business model
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sets forth the key components of the enterprise’s business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner.
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Management’s story line for how and why the company’s business approaches will generate revenues suffi cient to cover costs and produce attractive profi ts and returns on investment
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best describes what is meant by a company’s business model.
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The difference between a company’s strategy and a company’s business model is that
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strategy relates broadly to a company’s competitive moves and business approaches (which may or may not lead to profi tability) while its business model relates to whether the revenues and costs fl owing from the strategy demonstrate that the business is viable from the standpoint of being able to earn satisfactory profits and returns on investment.
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A winning strategy is one that
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fits the company’s internal and external situation, builds sustainable competitive advantage, and improves company performance.
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44) A winning strategy is one that
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fits the company’s internal and external situations, builds sustainable competitive advantage, and improves company performance.
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Which one of the following questions can be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy?
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How well does the strategy fi t the company’s situation?
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Which of the following questions ought to be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy?
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Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?
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Crafting and executing strategy are top-priority managerial tasks because
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there is a compelling need for managers to proactively shape how the company’s business will be conducted and because a strategy-focused enterprise is more likely to be a stronger bottom-line performer than a company whose management views strategy as secondary and puts its priorities elsewhere.
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48) Crafting and executing strategy are top-priority managerial tasks because
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good strategy coupled with good strategy execution greatly raises the chances that a company will be a standout performer in the marketplace.
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Good strategy combined with good strategy execution
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are the most trustworthy signs of good management.
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The most trustworthy signs of a well-managed company are
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good strategy-making combined with good strategy execution.
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Excellent execution of an excellent strategy is
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the best test of managerial excellence and the best recipe for making a company a standout performer.

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