question

Chapter 2

answer

...

question

Which of the following questions is not something company managers should consider in thinking strategically about their company's directional path and developing a strategic vision?

answer

What business approaches and operating practices should we consider in trying to implement and execute our business model?

question

Which one of the following approaches to objective-setting should definitely be avoided?

answer

Setting unspecific targets like maximize profits, reduce costs, become more efficient, or increase revenues.

question

The primary roles/obligations of a company's board of directors in the strategy-making, strategy-executing process include:

answer

critically appraising the company´s direction, strategy, and business approaches and evaluating the caliber of senior executives ' strategy-making and strategy-executing skills.

question

A company exhibits strategic intent when

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it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective.

question

A company´s values relates to such things as

answer

fair treatment, honor and integrity, ethical behavior, innovativeness, teamwork, accountability, a passion for top-notch quality or superior customer service, social responsibility, and community citizenship.

question

The difference between a company´s mission statement and the concept of a strategic vision is that

answer

the strategic vision portrays a company's future direction ("where we are going") whereas a company's mission typically describes its present business and purpose ("who we are, what we do, and why we are here")

question

company´s strategic plan

answer

lays out its future direction, business purpose, performance targets, and strategy--in order wordes, a strategic vision + mission + a set of objectives + a strategy = a strategic plan.

question

Managerial jobs with strategy-making responsability

answer

typically extend throughout the managerial ranks and exist in every part of a company--its business units, operating divisions, functional departments, manufacturing plants, and sales districts); indeed, the more that a company's operations cut across different products, industries, and geographical areas, the more that headquarters executives have little option but to delegate considerable strategy-making authority to down-the-line managers in charge of particular organizational units.

question

Which of the following is the best example of a well-stated strategic objective?

answer

Within 2 years, achieve costs per unit sold that are 10% below the current industry average of $4.75 per unit

question

Effectively communicating the strategic vision to company personnel is important because:

answer

if company personnel do not understand or accept the rationale for heading in the direction top management has charted, they are prone to resist or be indifferent to the changes management wants to make.

question

Which of the following are hey tasks in the strategy-making, strategy-executing process?

answer

Developing a strategic vision, mission, and core values; setting objectives; and crafting a strategy to achieve the objectives and move the company along the strategic course management has charted.

question

A company's strategic vision

answer

delineates management's aspirations for the business, providing a panoramic view of "where we are going" and convincing rationale for why this makes good business sense for the company.

question

Which of the following is not among the principal managerial tasks associated with implementing and executing a company's strategy?

answer

Pushing employees to work hard, do their very best, and meet or beat the established performance targets-employees that fall short on these criteria must be quickly weeded out

question

A company that pursues and achieves strategic objectives

answer

is frequently better able to improve its future financial performance (because of the stronger market standing and greater competitive vitality that flow from the achievement of well-chosen strategic objectives)

question

A set of "stretch" financial and strategic objectives

answer

helps a company avoid ho-hums results

question

Masterful strategies come from

answer

doing things differently from competitors where it counts--out-innovating them, being more efficient, being more imaginative, adapting faster--rather than running with the herd.

question

A company's overall strategy

answer

is really a collection of strategic initiatives and actions devised by managers (and sometimes key employees) up and down the whole organizational hierarchy

question

Operating strategies concern

answer

the relatively narrow strategic initiatives and approaches for managing key operating units (plants, distribution centers, geographic units) and strategically significant operating tasks (quality control, advertising campaigns, the management of specific brands, supply chain-related activities, and website sales and operations)

question

Which of the following are characteristics of an effectively-worded strategic vision statement?

answer

Graphic, forward-looking and directional, and focused

question

Chapter 3

answer

...

question

Industry conditions change

answer

because forces in the industry environment are enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their action in important ways.

question

Which of the following are most unlikely to qualify as driving forces?

answer

mounting competition from substitutes, increasing efforts on the part of industry members to collaborate with suppliers, and the speed with which the number of industry key success factors is either rising or falling.

question

mapping the positions of strategic groups in an industry

answer

the best variables to use as axes are those where there are big differences among the industry members--when rivals differ on both variables, the locations of the rivals will scattered, thus showing how they are positioned differently.

question

Potential entrants are more likely to be deterred from actually entering an industry when

answer

industry incumbents are willing and able to launch strong defensive maneuvers to maintain the positions and make it harder for a newcomer to compete successfully and profitability.

question

While doing the necessary detective work can be tedious and time-consuming, studying he strategies and situations of rival companies (most specifically close rivals) well enough to be able to anticipate many of their next moves has the big advantage of

answer

enabling managers to prepare effective counter moves (perhaps to even beat a rival to the punch and to take rival' probable actions into account in crafting their own best course of action.

question

Evaluating whether potential entry is a strong or weak competitive force, it is important for company managers to consider

answer

whether entry barriers are high or low, the size of the pool of likely entry candidates and the resource capabilities, the expected reaction of industry members in defending against new entry and how attactive the industry's growth and profit prospects are to potential entry candidates

question

The rivalry among competing sellers tends to be more intense when

answer

industry members have too much inventory or significant amounts of idle production capacity especially if the industry's products entails high storage costs or high fixed costs.

question

Factors that weaken the rivalry among competing sellers include

answer

rapid growth in buyer demand, high buyer costs to switch brands, and so many industry rival that any one company's actions have little impact on rival's business.

question

Which of the following instances are industry members subject to stronger competitive pressures from substitute products?

answer

When substitutes are readily available, are attractively prices, and have comparable or better attributes and performance features.

question

The key success factors in an industry

answer

are those competitive factors that most affect industry member's abilities to prosper in the marketplace-- the particular strategy elements, product attributes, resource strengths, competitive capabilities, ad market achievements that spell the difference between being a strong competitor and a weak competitor (and sometimes the difference between profit and loss).

question

Whether supplier bargaining power represents a strong or weak source of competitive pressure is affected by

answer

whether the item being supplied is a standard item (or commodity) or instead, whether certain suppliers provide a differentiated input that enhances the performance or quality of the industry's product.

question

Competitive pressures stemming from the threat of entry are stronger when

answer

the pool of entry candidates is large and some have adequate resources to overcome entry barriers and combat defensive actions of existing industry.

question

Based on figure 3.4, which of the following is not a typical competitive weapon that a company can use to battle rivals and attract buyers?

answer

Constructing the biggest production plant of any company in the industry

question

Using the five-forces model of competition to determine what competition is like in a given industry involves

answer

building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining whether the collective strength of all five competitive forces is conductive to earning attractive profits.

question

Evaluating whether the outlook for an industry presents a company with good prospects for attractive profitability and growth usually does not involve a consideration of which of the following factors?

answer

whether the industry's product is strongly or weakly differentiated, how many companies have entered and exited the industry over the past five years, and whether many if the companies in the industry have experienced losses in any of the past five years.

question

which of the following is not a major question to ask in gaining deep understanding about the company's industry and competitive environment?

answer

How big is the market for the industry's product/service and how fast is it growing?

question

Which of the following is generally not considered as a barrier to entry?

answer

Rapid market growth and weakly differentiated product offerings on the part of existing industry members?

question

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on

answer

the price sensitivity of buyers, whether buyer switching costs are high or low, and how well informed buyers are about product offerings of industry members.

question

As a rule, the weaker the competitive pressures associated with the five competitive forces

answer

the easier it is for industry members to earn good profits and nice return on investment.

question

chaoter 4

answer

...

question

Because when to make a strategic move can be just as important as what move to make, a company's option with respect to timing is

answer

to carefully weight the first mover advantages against the first-mover disadvantages accordingly

question

Which of the following is not a potential advantage of backward vertical integration?

answer

Reduced business risk because of controlling a bigger protion of the overall industry value chain.

question

Which of the following is not one of the strategic options that companies have for using their websites?

answer

Creating as much channel conflict as possible so as to quickly learn whether all customer related transactions should be conducted at the company's website or whether the company needs to continue selling through traditional wholesalers, distributos, and retailers.

question

Which one of the following is not a defensive option for protecting a company's market share competitive position>

answer

Deliberately attacking those market segments where a key rival makes big profits.

question

Which one of the following is an example of an offensive strategy?

answer

Pursuing disruptive product innovation to create new markets.

question

The two best reasons for investing company resources in vertical integration (either forward or backward) are to

answer

Strengthen the company's competitive position and/or boost its profitability

question

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company

answer

must be able to achieve the same scale economies as outside suppliers and match or beat suppliers production efficiency with no drop-off in quality

question

A strategic alliance

answer

is a collaborative arrangement where two or more companies join forces to achieve mutually beneficial outcomes

question

Which of the following is not a typical reason that many alliances are short-lived or break apart?

answer

Disagreement over how to divide the profits gained from joint collaboration

question

Which of the following conditions do not constitute a late mover advantage (or first-mover disadvantage)?

answer

When buyer demand for a later-mover's product offering is rising

question

Based on Figure 6.1, which one of the following is not a strategic action that a company can take to complement its chocie of one of the five generic strategies and maximize the power of its overall strategy?

answer

Exerting additional efforts to achieve strong product differentiation.

question

A blue ocean type of offensive strategy

answer

involves abandoning efforts to beat out competitors in existing markets and, instead, inventing a new industry or distinctive market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

question

Which of the following is not among the potential benefits that a company can gain by outsourcing value chain activities presently performed in-house?

answer

Improving a company's ability to strongly differentiate its product, lowering the costs of integrating both forward and backward, and transferring the risk of adverse changes in buyer demand for the company's product to outside vendors.

question

Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions?

answer

To facilitate a company's shift from a one competitive strategy approach to another.

question

The best strategic alliances

answer

are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit; they tend to enable a firm to build on its strengths and learn.

question

CHAPTER 7

answer

-

question

Which of the following is not among the important strategic issues assocaited with competing across national boundaries?

answer

How best to revamp the company's value chain in order to facilitate achievement if a global competitive advantage

question

Which of the following is not a potential benefit of collaborative strategies involving alliances and/or joint ventures with foreign partners?

answer

Greater ability to employ offensive strategies and build well-protected profit sanctuaries.

question

Multicountry competition refers to a market situations where

answer

there's so much cross-country variation in market conditions and in the companies contending for leadership that the market contest among rivals in one country is localized to that country and not closely connected to the market contests in other countries.

question

The classic reason for locating a particular value chain activity in a particular country is

answer

to achieve low costs in performing that activity

question

A U.S. manufacturere that exports goods made at its U.S. plant for shipment to foreign markets

answer

becomes more cost competitive in selling its exported goods in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting.

question

Which of the following is not one of the primary strategy options for competing in the markets of foreign countries?

answer

Employing a multiple cross-country strategy that involves strategic alliances, joint ventures, and other cooperative agreements with foreign companies

question

Which one of the following is not a reason why a company decides to enter foreign markets?

answer

To build the profit sanctuaries necessary to wage guerilla offensives against global challengers endeavoring to invade its home market

question

In which of the following is employing "think local, act local" multicountry strategy highly questionable?

answer

When a company is striving to build globally recognized brand name for one of its product services

question

Which of the following qualifies as an offensive strategy for companies competing internationally or globally?

answer

Attacking the profit sanctuaries of rival companies.

question

Which of the following is the most unlikely element of a "think global, act global" approach to stategy-making?

answer

Selling different product versions under different brand names

question

Because buyer tastes for a particular product or service sometimes differ substantially from country to country

answer

companies operating in a global marketplace must wrestle with whether and how much to customize their offerings in each different country market to match the tastes and preferences of local buyers or whether to pursue a strategy of offering a mostly standardized product worldwide.

question

The advantages of using a franchising strategy to pursue opportunities in foreign markets include

answer

having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchiser to expend only the resources to recruit, train, support, and monitor foreign franchisees.

question

According to Figure 7.2, which one of the following does not accurately characterize the differences between localized multicountry strategy and global strategy?

answer

A localized multicountry strategy involves competing on the basis of the same competencies and resource capabilities in each country market where it operates whereas a global strategy entails rapid cross-country transfers of new ideas, products, and capabilities.

question

A company that has competitively powerful resources and capabilities can enhance its competitiveness internationally and perhaps build competitive advantage by

answer

transferring a portion of these resources and capabilities from its operations in one country to its operations in other countries because the cost of sharing or transferring already developed resources and capabilities across country borders is low in comparison to the time and considerable expense it takes for a country subsidiary to build matching capabilities on its own.

question

Competing in one or more countries or regions of the world cause strategy-making to be more complex because of

answer

differing governmental policies and regulations from country to country and the risks of adverse shifts in currency exchange rates.

question

Chapter 8

answer

-

question

Which of the following is the best example of unrelated diversification?

answer

A product of men's apparel acquiring a marker of golf equipment

question

Which of the following is not part of the procedure for evaluating the pluses and minuses of a diversified company's strategy and deciding what actions to take to improve the company's performance?

answer

Conducting a SWOT analysis of each business the company has diversified into

question

Which of the following best illustrated an economy of scope?

answer

Being able to eliminate or reduce costs by combining related value-chain activities of different businesses into a single operation

question

Creating added long-term value for shareholders via diversification requires

answer

building a multi-business company where the whole is greater than the sum of its parts--such 1 + 1 = 3 effects are called synergy.

question

Diversification becomes a prime strategic option in all but which one of the following situations?

answer

When a company has more resource deficiencies than resource strengths in its principal business

question

What makes related diversification an attractive strategy is

answer

the opportunity to convert cross-business strategic fits into a competitive advantage over business rivals whose operations do not offer comparable strategic-fit benefits.

question

Strategic fit between two or more businesses exists whenever one or more activities comprising the value chains of different businesses are sufficiently similar to present opportunities

answer

for cross-business use of a potent brand name and/or cross-business collaboration to build new or stronger competitive capabilities

question

The value of determining the relative competitive strengths of each business a company has diversified into is

answer

to have a quantitative basis for rating them from strongest to weakest in contending for market leadership in their respective industries.

question

Which on of the following is not among the conditions that make restructuring a diversified company business lineup an appealing strategic option?

answer

When the company lacks a strong global brand name and lacks the managerial know-how and technological expertise needed to achieve economies of scope

question

Once a company has diversified into a collection of related or unrelated businesses and concludes that some strategy adjustments are needed, which one of the following is NOT one of the main strategy options that a company can pursue?

answer

Have all of the company's businesses operate under a common brand name and craft new initiatives to build/enhance the reputation of this brand name worldwide

question

Based on the information presented in Figure 8.1, which of the following would not be something to look for in identifying a diversified company's strategy?

answer

The competitive strategy each business is employing to try to build a competitive advantage over rivals

question

Which one of the following is NOT something that corporate executives must do to succeed in using a strategy of unrelated diversification to produce companywide financial results above and beyond what the businesses could generate operating as stand-alone entities?

answer

Be shrewd in identifying opportunities to acquire businesses that possess exceptionally good resource fits and/or that can significantly boost sales and market share by incorporating use of the parent company's technological expertise

question

Which of the following are negatives or disadvantages of pursuing unrelated diversification strategies?

answer

No potential for competitive advantage beyond any benefits of corporate parenting and what each individual business can generate on its own

question

The nine-cell attractiveness-strength matrix provides strong logic for

answer

fully funding the resource needs of competitively strong businesses in attractive industries, investing selectively in businesses with intermediate position on the grid, and getting rid of competitively weak businesses in unattractive industries unless they generate sizable cash flows that can be redeployed elsewhere.

question

Different businesses are said to be "unrelated" when

answer

they have dissimilar value chains, containing no competitively useful cross-business relationships or strategic fits.

question

The top-level executive task of crafting a diversified company's overall or corporate strategy includes which one of the following?

answer

Evaluating the growth and profitability prospects for each business and then investing aggressively in the most promising businesses with the best prospects, investing cautiously in businesses with just average prospects, and divesting businesses with unacceptable prospects

question

A diversified company's business units exhibit good resource fit when

answer

a company has the resources to adequately support the requirements of its entire group of businesses without spreading itself too thin and when individual businesses add to a company's overall resource strengths.

question

A "cash hog" type of business

answer

is one that generates cash flows that are too small to fully fund its operations and growth--such businesses require periodic cash infusions by the corporate parent to fund internal operations and finance capital requirements.

question

The chief purpose of calculating quantitative industry attractiveness scores for each industry a company has diversified into is to

answer

help determine (1) whether each industry the company has diversified into represents a good business for the company to be in, (2) which of the company's industries are most attractive and which are least attractive, and (3) the overall appeal of the whole group of industries in which the company has invested.

question

Businesses are said to be "related" when

answer

they possess competitively valuable cross-business value-chain matchups.

question

Chapter 1

answer

-

question

Good strategy combined with good strategy execution

answer

are strongly correlated with how well the company performs both financially and in the marketplace.

question

The two crucial elements of a company's business models are

answer

its customer value proposition and its profit proposition or "profit formula"

question

A winning strategy is one that

answer

helps the company achieve a sustainable competitive advantage, results in better company performance, and fits the company's internal and external situation.

question

Which of the following is not one of the reasons that a company's strategy evolves over time?

answer

The need on the part of company managers to make regular strategy adjustments so as to avoid the risks that rivals might soon find ways to weaken or defeat its present strategy with strategy improvements of their own

question

Which of the following statements about a company's strategy is false?

answer

A company's strategy is deliberately kept under wraps by top-level managers so as to catch rival companies by surprise and keep them off-balance.

question

A company's strategy evolves from one version to the next

answer

as managers abandon obsolete or ineffective strategy elements, settle upon a set of proactive strategy elements, and then--as new circumstances unfold--make adaptive strategic adjustments, which gives rise to reactive strategy elements.

question

Crafting an ethical strategy requires that managers

answer

carefully and conscientiously consider whether each proposed strategy element can pass the test of moral scrutiny in the sense of not being shady, unconscionable, or injurious to others.

question

Based on Figure 1.1, which of the following is not something to look for in identifying a company's strength?

answer

Actions to raise or lower the company's performance targets and actions to pay down the company's long-term debt

question

For a company's strategy to qualify as "ethical" it is important

answer

for the strategy not to entail actions or behaviors that cross the moral line from "should do" to "should not do" (because such actions are unsavory, unconscionable, injurious to others, or unnecessarily harmful to the environment).

question

In crafting a strategy, management is in effect saying

answer

"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 meeting or beating our performance objectives."

question

A company achieves sustainable competitive advantages when

answer

an attractive number of buyers are drawn to purchase its products or services rather than those of competitors, despite the efforts of competitors to nullify or overcome the appeal of its product offering.

question

What makes a competitive advantage sustainable or durable as opposed to temporary is

answer

actions or elements in the strategy that cause an attractive number of buyers to have lasting reasons to purchase a company's products or services, despite competitors' best efforts to nullify or overcome those reasons.

question

A company's strategy

answer

represents managerial commitment to undertake one set of actions rather than another in an effort to compete successfully and achieve good performance outcomes.

question

The difference between a company's business model and a company's strategy is that

answer

its business model relates to management's blueprint for delivering a valuable product or service to customers in a manner that will generate ample revenues to cover costs and yield an attractive profit while its strategy relates to the company's competitive moves and business approaches (which may or may not lead to profitability).

question

The customer value proposition portion of a company's business model concerns

answer

the company's approach to satisfying buyer needs and requirements at a price they will consider a good value.

question

What makes a competitive advantage suitable or durable as opposed to temporary is

answer

actions or elements in the strategy that cause an attractive number of buyers to have lasting reasons to purchase a company's products or services, despite competitor's best efforts to nullify or overcome those reasons.

question

the two crucial elements of a company's business model are

answer

its customer value proposition and its profit propositions or "profit formula"

question

crafting the ethical strategy requires that managers

answer

carefully and conscientiously consider each proposed strategy elements can pass the test of moral scrutiny in the sense of not being shady, unconscionable, or injurious to others.

question

A company achieves sustainable competitive advantage when

answer

an attractive number of buyers are drawn to purchase its products or services rather than those of competitors, despite the efforts of competitors to nullify or overcome the appeal of its product offerings

question

A winning strategy is one that

answer

helps the company achieve a sustainable competitive advantage, results in better company performance, and fits the company's internal and external situation.

question

In crafting a strategy, management is in effect saying

answer

"among all the many different business approaches and ways of competing we could have chosen, we have decied to employ this particuar combination of competitive and operating approaches in moving the company in the intended direction, strengthening its market position and competitiveness, and meeting or beating out performance objectives.

question

Company's strategy

answer

represents managerial commitment to undertake one set of directions rather than another in an effort to compete successfully and achieve good performance outcomes.

question

Which of the following statements about a company's strategy is false?

answer

A company's strategy is typically a blend of proactive and reactive strategy elements.

question

Based on figure 1.1, which of the following is not something to look for in identifying a company's srategy?

answer

Actions to raise or lower the company's performance targets and actions to pay down the company's long-term debt.

question

The customer value proposition portion of a company's business model concerns?

answer

the company's approach to satisfying buyer needs and requirements at a price they will consider a good value.

question

Good strategy combined with good strategy execution

answer

are strongly correlated with how well the company performs both financially and in the marketplace.

question

For a company's strategy to qualify as "ethical," it is important

answer

for the strategy not to entail actions or behaviors that cross the moral line from "should do" to "should not do" (because such actions are unsavory, unconscionable, injurious to others, or unnecessarily harmful to the environment).

question

Which of the following is not one of the reasons that a company's strategy evolves over time?

answer

The need on the part of company managers to make regular strategy adjustments so as to avoid the risks that rivals might soon find ways to weaken or defeat its present strategy with strategy improvements of their own.

question

The difference between a company's business model and a company's strategy is

answer

its business model related to management's blueprint for delivering a valuable product or service to customers in a manner that will generate ample revenues to cover costs and yield an attractive profit while its strategy relates to the company's competitive moves and business approaches (which may or may not lead to profit)

question

A company's strategy evolves from one version to the next

answer

as managers abandon obsolete or ineffective strategy elements, settle upon a set of proactive strategy elements, and then--as new circumstances unfold--make adaptive strategic adjustments, which gives rise to reactive strategy elements.

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