Strategic Management Sample Text – Flashcards

A company's strategy consists of A) its strategic vision, its strategic objectives, and its strategic intent. B) competitive moves and approaches that managers have developed to grow the business,attract and please customers, conduct operations, and achieve targeted objectives. C) plans involving alignment of organizational activities and strategic objectives. D) offensive and defensive moves to generate revenues and increase profit margins. E) actions to develop a more appealing business model than rivals.

A creative, distinctive strategy that delivers a sustainable competitive advantage is important because A) without a proven strategy a company is likely to fall into bankruptcy. B) without a competitive advantage a company cannot have a profitable business model. C) a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance. D) a competitive advantage is what enables a company to achieve its strategic objectives. E) how a company goes about trying to please customers and outcompete rivals is what enables senior managers choose an appropriate strategic vision for the company.

The most important aspect of a company's business strategy A) is figuring out how to maximize profits and shareholder value. B) is figuring out how to become the industry's low-cost provider. C) is its approach to competing in the marketplace. D) concerns how to improve the efficiency of its business model. E) deals with how management plans to maximize profits while, at the same time, operating in a socially responsible manner.

A company achieves sustainable competitive advantage when A) it is conSistently able to achieve both its strategic and financial objectives. B) it has a profitable business model. C) its strategy and its business model are well-matched and in sync. D) a sufficiently large number of buyers have a lasting preference for its products or services as -compared to the offerings of competitors. E) it is able to maximize shareholder wealth.

Changing circumstances and ongoing managerial efforts to improve the strategy A)account for why a company's s!rategy evolves over time. B) explain why a company's strategic $iGfl. undergoes almost constant change. C) make it very difficult for a company to have concrete strategic objectives. 0) make it very hard to know what a company's strategy really is. E) All of the above.

A company's strategy is a "work in progress" and evolves over time because of A) the ongoing need of company managers to react and respond to changing industry and competitive conditions. B) the ongoing need to imitate the new strategic moves of the industry leaders. C) the need to make regular adjustments in the company's strategic vision. 0) the importance of developing a fresh strategic plan every year. E) the frequent need to modify key elements of the company's business model.

A company's business model A) concerns the actions and business approachs that will be used to grow the business, conduct operations, please customers, and compete successfully. B) relates to the principle business components that will allow the business to generate revenues ample to cover costs and produce a profit. C) concerns what moves in the marketplace it plans to make to outcompete rivals. D) deals with how it can simultaneously maximize profits and operate in a socially responsible manner. E) concerns how management plans to pursue strategic objectives, given the larger imperative of meeting or beating its financial performance targets.

Which one of the following is Dot one of the five stages of the strategic management process? A) Crafting a strategy to achieve the objectives and get the company where it wants to go B) Setting objectives to measure progress toward achieving the strategic vision C) Implementing and executing the chosen strategy efficiently and effectively D) Developing a profitable business model E) Forming a strategic vision of the company's future direction and focus

A company's strategic vision concerns A) a company's directional path and future product-customer-market-technoIogy focus. B) "who we are and what we do." C) why the company does certain things in trying to please its customers. D) what future actions the enterprise will likely undertake to outmaneuver rivals and achieve asustainable competitive advantage. E) management's storyline of how it intends to make a profit with the chosen strategy.

A company's mission statement typically addresses which of the following questions? A)"What business model should we employ to achieve our objectives and our vision?" B) "Who we are, what we do, and why we are here" C) "Where are we going and what should our strategy be?" D) "What objectives and level of performance do we want to achieve?" E) "What approach should we take to achieve sustainable competitive advantage

A company needs financial objectives A) to convince shareholders that top management is acting in their interests. B) to translate the company's business model into action items. C) to overtake key competitors on such important measures as net profit margins and return on investment.· D) because without adequate profitability and financial strength, the company's ultimate surviva is jeopardized. E) to indicate to employees that financial objectives always take precedence over strategic objectives.

Successfully leading the effort to instill a spirit of high achievement into a company culture and put constructive pressure on the organization to achieve good results A) entails such actions as treating employees with dignity and respect, celebrating individual, group, and company successes, and setting stretch objectives. B) hinges on the extent to which top management emphasizes a positive rather than 'a negative reward system. C) requires that top executives make operating excellence the company's only core value. D) calls for top executives to stress the adoption of best practices, push for continuous product . innovation, and provide employees with a stream of suggestions for improving company operations. E) hinges on the degree to which lower-level managers and supervisors are good practitioners of MBWA

What separates companies that make a sincere effort to be good corporate citizens from companies that are content to do only what is legally required of them A) are shareholders who insist that senior executives practice corporate citizenship and social responsibility. B) is a strong board of directors that is committed to avoiding ethical scandals. C) are company leaders who believe that making a profit is not good enough and that performance should also include social and environmental metrics. D) is pressure from customers who expect the companies they do business with to be socially responsible in their actions. E) is pressure from employees who want to be proud of the company they work for.

Which one of the following is not part of a company's macroenvironment? A)The company's resource strengths, resource weaknesses, and competitive capabilities B) Governmental regulations and legislation C) Conditions in the economy at large· D) Technological factors E) Population demographics and societal values and lifestyles

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on A) whether most buyers possess roughly equal or varying degrees of bargaining power. B) how many buyers are engaged in collaborative partnerships with sellers. C) whether entry barriers are high or low. D) whether the overall quality of the items being furnished by industry members is rising or falling. E) whether buyer demand is strong or declining.

The key su~ess factors in an industry A) depend on how many rivals are trying to move from one strategic group to another. B) are a function ofsuch considerations as how many firms are in the industry, how many have market shares above 5%, and whether the business models being used are similar or diverse. C) are the strategy elements, intangible assets, and competitive capabilities that most affect industry members' abilities to prosper in the marketplace. D) are determined by the industry's driving forces. E) hinge on how many different strategic groups the industry has.

One important indicator of how well a company's present strategy is working is whether A)the company is achieving its financial and strategic objectives and whether it is an above-average industry performer. B) it has been able to create new industry demand through the use of a blue ocean strategy, C) its strategy is built around at least two of the industry's key success factors. D) it is subject to weaker competitive forces and pressures than close rivals (a good sign) or stronger competitive forces and pressures (a bad sign), E) it has more core competencies than close rivals

A resource-based strategy A) focuses on working with forward channel allies to develop capabilities to outmatch the capabilities of rivals. B) concentrates on minimizing the costs associated with the design of a product or service. C) focuses on exploiting a company's best-executed operating strategy. D) it is based upon efficient performance of the company's primary value chain activities. E) attempts to exploit resources in a manner that offers value to customers in ways rivals are unable to match.

The difference between a comp-etence and a core competence is that A)a competence represents proficiency in performing an internal activity whereas a core competence is a proficiently performed internal activity that is central to a company's strategy and competitiveness. B) a competence refers to a company's most strategically important resource whereas a core competence refers to the basis of a company's competitive advantage over rivals. C) a competence refers to a company's best-executed functional strategy and a core competence refers to a company's best-executed business strategy. D) a core competence usually resides in a company's technology and physical assets (state-of-the-art plants and equipment, attractive real estate locations, and so on) whereas a ,. company competence usually resides in a company's human capital, information capital, or organizational capital. E) a competence is a competitively relevant internal activity which a firm performs especially weI! relative to other internal activities, whereas a core competence is a competitively important activity performed by key strategic allies.

SWOT analysis A) reveals whether a company is competitively stronger than its closest rivals. B) identifies the reasons why a company's strategy is or is not working very well. C) is a way to measure whether a company's value chain is longer or shorter than the chains of key rivals. D)provides a good overview of a company's overall situation. . E) is a tool for benchmarking whether a firm's strategy is closely matched to industry key success factors.

The market opportunities most relevant to a particular company are those that A) offer the best growth and profitability. B)provide a strong defense against threats to the company's profitability. C) hold the most potential to reduce costs. D) provide avenues for taking market share away from close rivals. E) hold the most potential for product innovation.

One of the most telling signs of whether a company's market osition is strong or precarious is A)whether its product is strongly or weakly differentiated from rivals .. B) the opinions of buyers regarding which seller has the best product quality and customer service. C) whether it has a lower stock price than key rivals. D) whether it is in a bigger Glr smaller strategic group than its closest rivals . E) whether its prices and costs are competitive with those of key rivals.

A company's value chain A) consists of the series of steps a company goes through to develop a new product, get it produced and into the marketplace, and then start collecting revenues and earning a profit. B)consists of two broad categories of activities: the primary activities that create customer value and the requisite support activities that facilitate and enhance the performance of the primary activities. ,/ C) depicts the internally performed activities associated with creating and enhancing the company's competitive assets. D) concerns the basic process the company goes through in performing R and developing new products. E) consists of the primary activities that it performs in seeking to deliver value to shareholders in the form of higher dividends and a higher stock price.

The options for remedying a -related cost disadvantage include A) cutting selling prices and trying to win a bigger market share. B) forward vertical integration. C) shifting from a !ow-cost leadership strategy to a differentiation or focus strategy. D) trying to negotiate more favorable prices with suppliers and switching to lower priced substitute inputs. E) shifting into the production of substitute products

While there are many routes to competitiv..§ adygntage~ they all involve A) getting in the best strategic group and dominating it. B) achieving lower costs than rivals and becoming the industry's sales and market share leader. C)delivering superior value to buyers in ways rivals cannot readily match. D) finding effective and efficient ways to strengthen the company's competitive assets and to reduce its competitive liabilities. E) building a brand name image that buyers trust.

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or focus strategy when A) there are many ways to achieve product differentiation that buyers find appealing. B) buyers use the product in a variety of different ways. C) the offerings of rival firms are essentially identical, standardized, commodity-like products. D) the market is composed of many buyer types, all with varying needs and expectations. E) buyers have high switching costs in changing from one seller's product to another

Easy-to-copy differentiating features A) are less expensive to integrate into a product or service offering. B) lead to vigorous price competition. C) do not offer the promise of sustainable competitive advantage. D) should be patented before other companies follow suit. E) tend to create as much value for consumers as difficult-to-copy differentiating features

Bro~iationstrategies generally work best in market circumstances where A) buyers are price sensitive and buying switching costs are quite low. B) most buyers have similar needs and use the product in the same ways. C) buyer needs and preferences are too diverse to be fully satisfied by a standardized product. D) the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart. E) the five competitive forces are strong.

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is A) their concentrated attention on a narrow piece of the overall market. B) greater opportunity for competitive advantage. C) their suitability for market situations where most industry rivals have weakly differentiated products. D) the extra attention paid to top-notch product performance and product quality. E) their objective of delivering more value for the money.

For a best cost provider strategy to be successful, a company must have A) the capability to incorporate upscale attributes at lower costs than rivals whose productshave similar upscale attributes. B) access to greater learning/experience curve effects and scale economies than rivals. C) a short, low-cost value chain. D) excellent marketing and sales skills in convincing buyers to pay a premium price for the attributes/features incorporated in its product. E) one of the best-known and most respected brand names in the industry.

Which of the following is not one of the five generic types of competitive strategy? A) market share dominator strategy B) A broad differentiation strategy '" C) A focused low-cost provider strategy "" D) A focused differentiation strategy E) An overall low cost provider strategy.

Which of the following i~frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? A) Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, or more attractive styling. B)Striving to be more profitable than rivals and aiming for a competitive edge based on bigger . profit margins. C) Developing expertise and resources 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 satisfying the needs and tastes of buyers comprising the niche. E) Aiming for a cost-based competitive advantage.

Crafting a strategy involves A) blending deliberate/planned initiatives with emergent/unplanned reactive responses to changing circumstances, while abandoning planned strategy elements that have failed in the marketplace. B) developing a 5-year strategic plan and then fine-tuning it during the remainder of the plan period. C) trying to imitate as much of the market leader's strategy as possible so as not to end up at a competitive disadvantage. D) doing everything possible (in the way of price, quality, service, warranties, advertising, and so on) to make sure the company's product/service is very clearly di1ferentiated from the product/service offerings of rivals. E) All of these accurately characterize the managerial process of crafting a company's strategy

The three elements of a company's Qusiness-madel are A) its actions to capture emerging market opportunities and defend against threats to the company's business prospects, its actions to strengthen competitiveness via strategic alliances, and its actions to enter new geographic or product markets. B) its deliberate strategy. its emergent strategy. and its realized strategy. C) its customer value proposition, the profit formula, and an identification of key resources and processes necessary to create and deliver value to customers. D) management's answers to "Where are we now?," 'Where do we want to go?," and "How are we going to get there?". E) its business strategy, its collection of competitively valuable resources, and a strong management team.

A winning strategy is one that A). fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance. B) is highly profitable and boosts the company's market share. C) builds strategic fit, is socially responsible, and maximizes shareholder wealth. D) results in a company becoming the dominant industry leader. E) can pass the ethical standards test, the strategic intent test, and the profitability test.

Strategic objectives A) relate to strengthening a company's overall market standing and competitive vitality. B) are more essential in achieving a company's strategic vision than are financial objectives. C) are generally less important than financial objectives. D) are more difficult to achieve and harder to measure than financial objectives. E) help managers track an organization's true progress better than do financial objectives

A Balanced Scorecard that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because A) it entails putting equal emphasis on good strategy execution and good business model execution. B) financial performance measures are lagging indicators that reflect the results of past "' C) decisions and organizational activities whereas strategic performance measures are leading indicators of a company's future performance. D) a balanced scorecard approach pushes managers to avoid setting objectives that reflect the results of past decisions and organizational activities and, instead, to set objectives that will serve as leading indicators of a company's future financial performance. D) it more or less forces managers to put equal emphasis on financial and strategic objectives. E) it assists managers in putting roughly equal emphasis on short-term and long-term performance targets.

Company objectives A) to be broken down into performance targets for each of its separate businesses, product lines, functional departments, and individual work units. B) should be set in a manner that does not conflict with the performance targets of lower-level organizational units. C) are needed only in those areas directly related to a company's short-term and long-term profitability. D) are important because they help guide managers in deciding what the company's Strategy Map should look like. E) play the important role of establishing the direction in which it needs to be headed.

The obligations of an investor-owned company's board of directors in the strategy-making, strategy-executing process include A) coming up with compelling strategy proposals of their own to debate against those put forward by top management. B) overseeing the company's financial accounting and financial reporting practices and evaluating the caliber of senior executives' strategy-making/strategy-executing skills C) taking the lead in developing the company's business model and strategic vision. D) approving the company's operating strategies, functional-area strategies, business strategy, and overall corporate strategy. E) taking the lead in formulating the company's strategic plan but then delegating the task of implementing and executing the strategic plan to the company's CEO and other senior executives.

Which one of the following increases the competitive pressures associated with the threat of entry? A) When buyers have a high degree of loyalty to the brands and product offerings of existing industry members .. B) When few outsiders have the expertise and resources to hurdle whatever entry barriers exist C)When newcomers can expect to eam attractive profits D) When buyer demand for the product is growing fairly slowly E) When incumbent firms are likely to launch competitive initiatives to strongly contest the entry of newcomers

Which of the following is generally not considered as a barrier to entry? A) Difficulties in gaining access to distribution and securing adequate space of retailers' shelve B) Sizable economies of scale in production C) Sizable capital requirements and an array of regulatory requirements ~ D) Strong buyer loyalty to existing brands ' E)Rapid market growth

A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers and customers A) lacks powerful driving forces . B)makes it hard for industry members to pursue a differentiation strategy. C)requires that industry members have low costs. D) is conducive to industry members earning attractive profits . ." E) gives each industry competitor the best potential for building sustainable competitive advantage.