Strat Pol quizes 1-7

Flashcard maker : Lily Taylor
Chapter 2
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?
What business approaches and operating practices should we consider in trying to implement and execute our business model?
Which one of the following approaches to objective-setting should definitely be avoided?
Setting unspecific targets like maximize profits, reduce costs, become more efficient, or increase revenues.
The primary roles/obligations of a company’s board of directors in the strategy-making, strategy-executing process include:
critically appraising the company´s direction, strategy, and business approaches and evaluating the caliber of senior executives ‘ strategy-making and strategy-executing skills.
A company exhibits strategic intent when
it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective.
A company´s values relates to such things as
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.
The difference between a company´s mission statement and the concept of a strategic vision is that
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”)
company´s strategic plan
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.
Managerial jobs with strategy-making responsability
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.
Which of the following is the best example of a well-stated strategic objective?
Within 2 years, achieve costs per unit sold that are 10% below the current industry average of $4.75 per unit
Effectively communicating the strategic vision to company personnel is important because:
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.
Which of the following are hey tasks in the strategy-making, strategy-executing process?
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.
A company’s strategic vision
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.
Which of the following is not among the principal managerial tasks associated with implementing and executing a company’s strategy?
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
A company that pursues and achieves strategic objectives
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)
A set of “stretch” financial and strategic objectives
helps a company avoid ho-hums results
Masterful strategies come from
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.
A company’s overall strategy
is really a collection of strategic initiatives and actions devised by managers (and sometimes key employees) up and down the whole organizational hierarchy
Operating strategies concern
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)
Which of the following are characteristics of an effectively-worded strategic vision statement?
Graphic, forward-looking and directional, and focused
Chapter 3
Industry conditions change
because forces in the industry environment are enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their action in important ways.
Which of the following are most unlikely to qualify as driving forces?
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.
mapping the positions of strategic groups in an industry
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.
Potential entrants are more likely to be deterred from actually entering an industry when
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.
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
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.
Evaluating whether potential entry is a strong or weak competitive force, it is important for company managers to consider
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
The rivalry among competing sellers tends to be more intense when
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.
Factors that weaken the rivalry among competing sellers include
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.
Which of the following instances are industry members subject to stronger competitive pressures from substitute products?
When substitutes are readily available, are attractively prices, and have comparable or better attributes and performance features.
The key success factors in an industry
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).
Whether supplier bargaining power represents a strong or weak source of competitive pressure is affected by
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.
Competitive pressures stemming from the threat of entry are stronger when
the pool of entry candidates is large and some have adequate resources to overcome entry barriers and combat defensive actions of existing industry.
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?
Constructing the biggest production plant of any company in the industry
Using the five-forces model of competition to determine what competition is like in a given industry involves
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.
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?
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.
which of the following is not a major question to ask in gaining deep understanding about the company’s industry and competitive environment?
How big is the market for the industry’s product/service and how fast is it growing?
Which of the following is generally not considered as a barrier to entry?
Rapid market growth and weakly differentiated product offerings on the part of existing industry members?
Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on
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.
As a rule, the weaker the competitive pressures associated with the five competitive forces
the easier it is for industry members to earn good profits and nice return on investment.
chaoter 4
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
to carefully weight the first mover advantages against the first-mover disadvantages accordingly
Which of the following is not a potential advantage of backward vertical integration?
Reduced business risk because of controlling a bigger protion of the overall industry value chain.
Which of the following is not one of the strategic options that companies have for using their websites?
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.
Which one of the following is not a defensive option for protecting a company’s market share competitive position>
Deliberately attacking those market segments where a key rival makes big profits.
Which one of the following is an example of an offensive strategy?
Pursuing disruptive product innovation to create new markets.
The two best reasons for investing company resources in vertical integration (either forward or backward) are to
Strengthen the company’s competitive position and/or boost its profitability
For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company
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
A strategic alliance
is a collaborative arrangement where two or more companies join forces to achieve mutually beneficial outcomes
Which of the following is not a typical reason that many alliances are short-lived or break apart?
Disagreement over how to divide the profits gained from joint collaboration
Which of the following conditions do not constitute a late mover advantage (or first-mover disadvantage)?
When buyer demand for a later-mover’s product offering is rising
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?
Exerting additional efforts to achieve strong product differentiation.
A blue ocean type of offensive strategy
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.
Which of the following is not among the potential benefits that a company can gain by outsourcing value chain activities presently performed in-house?
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.
Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions?
To facilitate a company’s shift from a one competitive strategy approach to another.
The best strategic alliances
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.
CHAPTER 7
Which of the following is not among the important strategic issues assocaited with competing across national boundaries?
How best to revamp the company’s value chain in order to facilitate achievement if a global competitive advantage
Which of the following is not a potential benefit of collaborative strategies involving alliances and/or joint ventures with foreign partners?
Greater ability to employ offensive strategies and build well-protected profit sanctuaries.
Multicountry competition refers to a market situations where
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.
The classic reason for locating a particular value chain activity in a particular country is
to achieve low costs in performing that activity
A U.S. manufacturere that exports goods made at its U.S. plant for shipment to foreign markets
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.
Which of the following is not one of the primary strategy options for competing in the markets of foreign countries?
Employing a multiple cross-country strategy that involves strategic alliances, joint ventures, and other cooperative agreements with foreign companies
Which one of the following is not a reason why a company decides to enter foreign markets?
To build the profit sanctuaries necessary to wage guerilla offensives against global challengers endeavoring to invade its home market
In which of the following is employing “think local, act local” multicountry strategy highly questionable?
When a company is striving to build globally recognized brand name for one of its product services
Which of the following qualifies as an offensive strategy for companies competing internationally or globally?
Attacking the profit sanctuaries of rival companies.
Which of the following is the most unlikely element of a “think global, act global” approach to stategy-making?
Selling different product versions under different brand names
Because buyer tastes for a particular product or service sometimes differ substantially from country to country
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.
The advantages of using a franchising strategy to pursue opportunities in foreign markets include
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.
According to Figure 7.2, which one of the following does not accurately characterize the differences between localized multicountry strategy and global strategy?
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.
A company that has competitively powerful resources and capabilities can enhance its competitiveness internationally and perhaps build competitive advantage by
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.
Competing in one or more countries or regions of the world cause strategy-making to be more complex because of
differing governmental policies and regulations from country to country and the risks of adverse shifts in currency exchange rates.
Chapter 8
Which of the following is the best example of unrelated diversification?
A product of men’s apparel acquiring a marker of golf equipment
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?
Conducting a SWOT analysis of each business the company has diversified into
Which of the following best illustrated an economy of scope?
Being able to eliminate or reduce costs by combining related value-chain activities of different businesses into a single operation
Creating added long-term value for shareholders via diversification requires
building a multi-business company where the whole is greater than the sum of its parts–such 1 + 1 = 3 effects are called synergy.
Diversification becomes a prime strategic option in all but which one of the following situations?
When a company has more resource deficiencies than resource strengths in its principal business
What makes related diversification an attractive strategy is
the opportunity to convert cross-business strategic fits into a competitive advantage over business rivals whose operations do not offer comparable strategic-fit benefits.
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
for cross-business use of a potent brand name and/or cross-business collaboration to build new or stronger competitive capabilities
The value of determining the relative competitive strengths of each business a company has diversified into is
to have a quantitative basis for rating them from strongest to weakest in contending for market leadership in their respective industries.
Which on of the following is not among the conditions that make restructuring a diversified company business lineup an appealing strategic option?
When the company lacks a strong global brand name and lacks the managerial know-how and technological expertise needed to achieve economies of scope
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?
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
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?
The competitive strategy each business is employing to try to build a competitive advantage over rivals
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?
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
Which of the following are negatives or disadvantages of pursuing unrelated diversification strategies?
No potential for competitive advantage beyond any benefits of corporate parenting and what each individual business can generate on its own
The nine-cell attractiveness-strength matrix provides strong logic for
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.
Different businesses are said to be “unrelated” when
they have dissimilar value chains, containing no competitively useful cross-business relationships or strategic fits.
The top-level executive task of crafting a diversified company’s overall or corporate strategy includes which one of the following?
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
A diversified company’s business units exhibit good resource fit when
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.
A “cash hog” type of business
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.
The chief purpose of calculating quantitative industry attractiveness scores for each industry a company has diversified into is to
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.
Businesses are said to be “related” when
they possess competitively valuable cross-business value-chain matchups.
Chapter 1
Good strategy combined with good strategy execution
are strongly correlated with how well the company performs both financially and in the marketplace.
The two crucial elements of a company’s business models are
its customer value proposition and its profit proposition or “profit formula”
A winning strategy is one that
helps the company achieve a sustainable competitive advantage, results in better company performance, and fits the company’s internal and external situation.
Which of the following is not one of the reasons that a company’s strategy evolves over time?
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
Which of the following statements about a company’s strategy is false?
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.
A company’s strategy evolves from one version to the next
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.
Crafting an ethical strategy requires that managers
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.
Based on Figure 1.1, which of the following is not something to look for in identifying a company’s strength?
Actions to raise or lower the company’s performance targets and actions to pay down the company’s long-term debt
For a company’s strategy to qualify as “ethical” it is important
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).
In crafting a strategy, management is in effect saying
“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.”
A company achieves sustainable competitive advantages when
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.
What makes a competitive advantage sustainable or durable as opposed to temporary is
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.
A company’s strategy
represents managerial commitment to undertake one set of actions rather than another in an effort to compete successfully and achieve good performance outcomes.
The difference between a company’s business model and a company’s strategy is that
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).
The customer value proposition portion of a company’s business model concerns
the company’s approach to satisfying buyer needs and requirements at a price they will consider a good value.
What makes a competitive advantage suitable or durable as opposed to temporary is
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.
the two crucial elements of a company’s business model are
its customer value proposition and its profit propositions or “profit formula”
crafting the ethical strategy requires that managers
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.
A company achieves sustainable competitive advantage when
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
A winning strategy is one that
helps the company achieve a sustainable competitive advantage, results in better company performance, and fits the company’s internal and external situation.
In crafting a strategy, management is in effect saying
“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.
Company’s strategy
represents managerial commitment to undertake one set of directions rather than another in an effort to compete successfully and achieve good performance outcomes.
Which of the following statements about a company’s strategy is false?
A company’s strategy is typically a blend of proactive and reactive strategy elements.
Based on figure 1.1, which of the following is not something to look for in identifying a company’s srategy?
Actions to raise or lower the company’s performance targets and actions to pay down the company’s long-term debt.
The customer value proposition portion of a company’s business model concerns?
the company’s approach to satisfying buyer needs and requirements at a price they will consider a good value.
Good strategy combined with good strategy execution
are strongly correlated with how well the company performs both financially and in the marketplace.
For a company’s strategy to qualify as “ethical,” it is important
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).
Which of the following is not one of the reasons that a company’s strategy evolves over time?
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.
The difference between a company’s business model and a company’s strategy is
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)
A company’s strategy evolves from one version to the next
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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