Chapter1

1 CORRECT

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

A) Crafting an excellent strategy is more important than executing it well. Managers at all companies face three central questions in thinking strategically about th B) company's present circumstances and prospects: Where are we now? Where do we wan How are we going to get there? A company's strategy deals with whether the revenue-cost-profit economics of its busin C) demonstrate the viability of the business enterprise as a whole. Masterful strategies come partly (maybe mostly) by doing things in much the same way D) industry leader but then being better than the leader in one particular area that counts he buyers. Whether a company's strategy is ethical or not does not matter a lot because most custo E) most suppliers are relatively unconcerned whether a company they do business with eng sleazy practices or turns a blind eye to below-board behavior on the part of its employee

2 CORRECT

The competitive moves and business approaches a company's management are using grow the b attract and please customers, compete successfully, conduct operations, and achieve the targeted organizational performance is referred to as its A) strategic offensive for becoming a market leader. B) business model. C) long-term strategic direction. D) mission statement. E) strategy.

3 CORRECT

Which one of the following is not related to actions and approaches that comprise a company's s A) How to take advantage of growth opportunities B) How to prove to shareholders that the company's business model is viable C) How to outcompete rivals D) How to achieve financial and strategic objectives

E)

How each functional piece of the business (R&D, supply chain activities, production, sa marketing, distribution, finance, and human resources) will be operated

4 CORRECT

In answering the question, "How are we going to get there?" management must have deliberate addressing such issues as

A) developing a sound business model and customer base. changing market conditions, development of internal capabilities and competencies, and B) of financial resources.

C) emergent strategy elements, deliberate strategy elements, and abandoned strategy eleme

D) "Where are we now?" and "Where do we want to go?" how well the strategy fit the situation, has the strategy yielded competitive advantage, a E) strategy produced good financial performance.

5 CORRECT

Which of the following is not an element of a company's business strategy? A) Actions to respond to changing market conditions or other external factors

B) Actions to strengthen competitiveness via strategic alliances and collaborative partnersh

C) Management actions to revise the company's financial and strategic performance targets Actions to capture emerging market opportunities and defend against external threats to D) company's business prospects E) Actions to enter new geographic or product markets

6 CORRECT

Which of the following is not one of the most frequently used strategic approaches to building c advantage? A) Striving for a competitive edge based on bigger profit margins

B) Developing unmatched resource strengths and competitive capabilities Striving to be the industry's low-cost provider, thereby aiming for a cost-based competi C) advantage over rivals Focusing on a narrow market niche and winning a competitive edge by doing a better jo D) rivals of serving the special needs and tastes of buyers comprising the niche E) Outcompeting rivals based on differentiating features

7 CORRECT

The most important aspect of a company's business strategy A) is the linkage with its business model. B) is its ability to increase shareholder value.

C) is its approach to competing in the marketplace. deals with how management plans to maximize profits while, at the same time, operatin D) socially responsible manner. E) is the day-to-day demands of delivering a service or producing goods to be sold.

8 CORRECT

Strategies that yield sustainable competitive advantage is important because

A) increases in shareholder value are contingent on a sustainable competitive advantage. a strategy that yields a competitive advantage over rivals and creates an enduring deman B) company's products or services is the key to a company's ability to earn ongoing aboveprofits. C) competitive advantage forms the underpinnings of a company's strategic vision. D) a competitive advantage is what enables a company to achieve its strategic objectives. E) All of these.

9 CORRECT

A company achieves sustainable competitive advantage when A) it has a low-cost business model. B) it is able to increase shareholder value. sufficient numbers of buyers believe the company has demonstrated a commitment to C) environmental sustainability.

D) it is consistently able to achieve both its strategic and financial objectives. an attractive number of buyers have a lasting preference for its products or services as c E) the offerings of competitors

10 CORRECT

A strategy that sets a company apart from rivals and that gives it a sustainable competitive adva A) is a company's most reliable ticket to above-average profitability B) is based heavily upon the emergent elements of its strategy. C) is a reliable indicator that the company has a profitable business model.

D) can be called a winning strategy. is the best indicator that the company's strategy and business model are well-matched an E) synchronized.

11 CORRECT

Approaches to achieving a sustainable competitive advantage include which of the following? A) Developing unmatched resource strengths and competitive capabilities. B) Focusing on a narrow market niche within an industry. C) Strategies keyed to creating a differentiation-based advantage. D) Strategies keyed to developing a cost-based advantage. E) All of these.

12 CORRECT

Company strategies evolve because A)

it is a bad idea to do too much strategizing until a company has been in business long en know what strategies will work best.

B) most managers like to develop the strategy in bits and pieces rather than all at once. of the ongoing need to respond to changing market conditions, the fresh moves of comp C) shifting buyer needs and preferences, emerging market opportunities, new ideas for imp strategy, and any evidence that indicates the strategy is not working well. many managers are conservative, preferring to carefully contemplate the best responses D) developments and avoiding the risks associated with developing a complete strategy too a strategy does not really transition to a well-crafted stage until a company has been try E) execute it for a number of years and has learned what works and what doesn't.

13 CORRECT

It is normal for a company's strategy to end up being A)

little different from management's original planned set of actions and business approach making on-the-spot changes is too risky. a combination of defensive moves to protect the company's market share and offensive B) to set the company's product offering apart from rivals. pretty much like the strategies of other industry members since all companies are confro C) the same market conditions and competitive pressures. a blend of deliberate actions to improve the company's competitiveness and financial pe D) and unplanned reactions to changing circumstances and fresh market conditions. E) a mirror image of its business model, so as to avoid impairing company profitability.

14 CORRECT

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

A) A company's realized strategy is usually kept secret. A company's realized strategy is typically planned well in advance and usually deviates B) the planned set of actions. A company's realized strategy generally changes very little over time unless a newly-ap C) CEO decides to take the company in a new direction with a new strategy. A company's realized strategy is developed mostly on a day-to-day basis because of the D) efforts of managers to keep rival companies at a disadvantage. A company's realized strategy is typically a blend of deliberate/planned initiatives and E) emergent/unplanned reactive strategy elements.

15 CORRECT

A company's business model

A) determines whether its strategy will be ethical or not. is management's storyline for how the strategy will result in achieving sustainable comp B) advantage. (1) specifies a customer value proposition, (2) develops a profit formula, and (3) identif C) resources and processes required to create and deliver customer value identifies how the company plans to outmaneuver and outcompete key rivals and becom D) leader. sets forth the actions and approaches that it will rely on to earn the best profit margins i E) industry.

16 CORRECT

A viable business model A) is derived from the company's strategic vision.

B) lays out a compelling case for how the strategy will yield competitive advantage. should explain how the company will achieve high profit margins while at the same tim C) relatively low prices to customers.

D) must be closely linked to the company's business strategy. must have a tight fit with organizational capabilities and generate revenues sufficient to E) and deliver good profitability.

17 CORRECT

Which of the following statements concerning Sirius XM's business model and that of over-thebroadcasters (as discussed in Concepts & Connections 1.2) is false? Over-the-air broadcast radio has a proven business model while Sirius XM's business m A) unproven. The customer value proposition incorporated into Sirius XM's business model involves B) listeners with digital music, news, weather, and talk radio that is rarely interrupted by advertisements. The profit formula for Sirius XM is based upon generating sufficient monthly subscript C) sales of satellite radio equipment, and limited advertising to cover fixed and variable co associated with operating a satellite-based music delivery service and provide for attrac The business model of over-the-air broadcast radio requires such key resources as radio D) towers, sales personnel, an FCC license, and programming contracts. The profit formula for over-the-air radio broadcasters involves fixed costs associated w E) operating a satellite-based music delivery service.

18 CORRECT

A winning strategy is one that

A) makes the company a market leader, is ethically and socially responsible, and maximize

B) is highly profitable and boosts the company's market share. passes the profitability test, the ethics and social responsibility test, the customer satisfa C) and the shareholder wealth test. fits the company's internal and external situation, builds sustainable competitive advant D) boosts company performance.

E) passes the ethical standards test, the competitive advantage test, and the profitability tes

19 CORRECT

Which one of the following questions can be used to distinguish a winning strategy from a so-so strategy? What portion of the strategy was ultimately abandoned as market conditions changed as A) strategy played out? B) How well does the strategy fit the company's business model? D) Has the strategy produced good financial performance? E) Does the company have viable business model?

C) Does the company have a large number of differentiating features in comparison to riva

20 CORRECT

Which of the following questions ought to be used to distinguish a winning strategy from a med losing strategy? Did the strategy develop from an inclusive cooperative relationship between top-level A) management, line managers, and hourly personnel? C) Is the strategy built upon a viable business model?

B) Has management responded to changing market conditions with emergent strategy elem

D) Does the strategy strike a balance between shareholder interests and social responsibilit Is the strategy well-matched to the company's situation, helping the company achieve a E) competitive advantage, and resulting in better company performance?

Chapter 2
1 INCORRECT

Which one of the following is not an integral part of the managerial process of crafting strategy? A)Developing a strategic vision B)Choosing a strategic intent

C)Setting objectives and crafting a strategy to achieve them Evaluating performance and initiating corrective adjustments in the company's D) direction, objectives, strategy, or execution in light of actual experience, changi new ideas, and new opportunities E)Implementing and executing the chosen strategy efficiently and effectively

2 INCORRECT

A company's strategic plan consists of

the actions and market maneuvers it plans to use to achieve a sustainable compe A) advantage. management's vision mapping out where a company is headed, the company's f B) strategic objectives, and management's strategy to achieve the objectives and m company along the chosen strategic path. C)a company's strategic vision, strategic objectives, strategic intent, and strategy.

D)an organization's strategy and management's specific, detailed plans for implem the specific actions management intends to take in detouring strategic inflection E) executing its overall strategy.

3 INCORRECT

A strategic vision for a company

A)involves how fast to pursue the chosen strategy and reach the targeted levels of

B)consists of thinking through what it will take to make the chosen strategy work Describes "where we are going" by delineating the course and direction manage C) charted for the company's future product-customer-market-technology focus. spells out how the company is going to get from where it is now to where it wan D) when it is expected to arrive. concerns management's view of how to transition the company's business mode E) is now to where it needs to be.

4 INCORRECT

The difference between a company's mission statement and the concept of a strategic v

the mission statement lays out the desire to make a profit, whereas the strategic A) what strategy the company will employ in trying to make a profit. a mission statement deals with "where we are headed" whereas a strategic visio B) critical answer to "how will we get there?" a mission deals with what a company is trying to do and a vision concerns what C) ought to do. a mission statement typically concerns an enterprise's present business scope an D) "who we are, what we do, and why we are here"whereas the focus of a stra on the direction the company is headed and what its future product-customer-m technology focus will be. a mission is about what to accomplish for shareholders whereas a strategic visio E) to accomplish for customers.

5 INCORRECT

Which one of the following is not a characteristic of an effectively-worded strategic vis (see Table 2.2)? Directional (is forward-looking; describes the strategic course that management A) the kinds of product-market-customer-technology changes that will help the com for the future) Concrete and unambiguous (leaves no doubt as to what the company is trying to B) shareholders) C)Graphic (paints a clear picture)

D)Easy to communicate (ideally, explainable in 10 minutes) Focused and flexible (specific enough to provide managers with guidance in ma E) and allocating resources but stops short of a once-and-for-all-time statement be strategic path may need to be changed as market-customer-technology circumst

6 INCORRECT

According to both the text discussion and the summary in Table 2.3, which of the follo common shortcoming of company vision statements?

A)Incomplete or vagueshort on specifics Too reliant on superlatives (best, most successful, recognized leader, global or w B) leader, first choice of buyers) Too broadso umbrella-like and all-inclusive that the company could head in m C) direction, pursue most any opportunity, or enter most any business Lacking in analysisbased more on managerial emotion and excessive ambitio D) is realistically achievable Not distinctiveprovides no unique company identity; could apply to compani E) several industries (or at least several rivals operating in the same industry or ma

7 CORRECT

A company's objectives

convert the strategic vision into specific performance targetswell-stated objec A) quantifiable, or measurable, and contain a deadline for achievement. are typically established after a company decides on a strategic vision and strate B) will entail performance targets that truly signal business success. are best stated in general terms (maximize profits, reduce costs, increase sales) C) quantifiable terms (increase after-tax profits by 10% in 2 years, grow sales reve annually) so that managers will have the latitude to adjust target outcomes to le

achieved. should place far more emphasis on financial performance targets than strategic D) targets. E)All of these.

8 INCORRECT

Establishing and achieving strategic objectives merits very high priority on managemen because strategic outcomes provide better benefits to shareholders in both the short-run A) run. a company can't have a shrewd strategic vision without having aggressive and c B) astute strategic objectives. strategic outcomes are leading indicators of a company's future financial perfor C) business prospects.

D)well-chosen strategic objectives help managers craft a good strategy a company cannot achieve its strategic intent and strategic vision or gain a com E) advantage over rivals without having and achieving strategic objectives.

9 INCORRECT

A balanced scorecard for measuring company performance

entails balancing the pursuit of good bottom-line profit against the pursuit of no A) objectives (although achieving profitability targets is nearly always given great involves putting equal emphasis on the achievement of financial objectives, stra B) and social responsibility objectives. entails setting both financial and strategic objectives and putting balanced emph C) achievement. helps prevent the pursuit of strategic objectives from dominating the pursuit of D) objectives. is necessary in order to prevent the drive for achieving financial objectives from E) attention paid to social responsibility, community citizenship, and other worthy

10 CORRECT

Company objectives

need to be broken down into performance targets for each of its separate busine A) lines, functional departments, and individual work units. are needed only in those areas directly related to a company's short-term and lo B) profitability.

C)help answer the question "Where do we want to go."

D)are determined the geographic and business scope of the company's operations. should be set in a manner that does not conflict with the performance targets of E) organizational units.

11 INCORRECT

The task of crafting a strategy is

A)the function and responsibility of a few high-level executives. more of a collaborative group effort that involves all managers and sometimes k B) striving to arrive at a consensus on what the overall best strategy should be.

C)the function and responsibility of a company's strategic planning staff. a job for a company's whole management teamsenior executives plus the man D) business units, operating divisions, functional departments, manufacturing plan districts (as per the strategy-making hierarchy shown in Figure 2.2).

E)first and foremost the function and responsibility of a company's board of direc

12 INCORRECT

Strategy-making is A)primarily the responsibility of the company founder or CEO. C)primarily the responsibility of a company's strategic planning staff.

B)the responsibility of a company's chief executive officer and outside consultants

D)first and foremost the responsibility of a company's board of directors. more of a collaborative group effort that involves managers and key employees E) company.

13 INCORRECT

As per Figure 2.2, the strategy-making hierarchy in a single business company consists A)business strategy, divisional strategies, and departmental strategies. B)business strategy, functional area strategies, and operating strategies. C)business strategy and operating strategy.

D)managerial strategy, business strategy, and divisional strategies. E)corporate strategy, divisional strategies, and departmental strategies.

14 INCORRECT

Functional strategies

A)describe the mission and strategic intent of each key functional piece of the bus concern what to do about resolving the specific strategic issues and operating p B) business confronts in each key part of its businessR&D, production, sales and finance, information technology, human resources, and so on. are normally crafted by the executive in charge of the overall business and appr C) company's board of directors. add detail to the overall business strategy and specify what resources and organ D) capabilities are needed to put the business strategy into action. are concerned with what competitive capabilities to build in support of the over E) strategy and what to do to unify the firm's skills, competencies, and resource str the various key pieces of a company's business.

15 INCORRECT

Operating strategies concern what a company's various operating departments plan to do to help execute the A) overall strategy.

B)the strategic intent of each operating unit. the relatively narrow strategic initiatives and approaches for managing key oper C) (plants, distribution centers, geographic units) and specific operating activities ( of specific brands, supply chainrelated activities, and website sales and operat the specific actions a company's various operating departments plan to take to u D) achieve a sustainable competitive. what a company will do once its strategic plan is adopted and approved by the c E) of directors.

16 INCORRECT

Which of the following is not among the principal managerial tasks associated with ma strategy execution process?

A)Ensuring that policies and procedures facilitate rather than impede effective exe Installing information and operating systems that enable company personnel to B) essential activities

C)Exerting the internal leadership needed to drive implementation forward

D)Engaging the services of staffing firms to maintain the company's personnel dat

E)Tying rewards and incentives directly to the achievement of performance objec

17 CORRECT

Management is obligated to monitor new external developments, evaluate the company make corrective adjustments in order to decide whether to continue or change the company's strategic vision, objectives A) strategy execution methods.

B)determine whether the company has a Balanced Scorecard for judging its perfo

C)determine what changes should be made to its Strategy Map. determine whether the company's business model is well matched to changing m D) competitive circumstances. E)stay on track in achieving the company's mission and strategic vision.

18 INCORRECT

Leading and managing the strategy process calls upon managers to A)be very personable and an active listener.

B)be a charismatic, decisive decision-maker that subordinates will wish to emulat delegate little to subordinates and exert a strong, highly visible influence on the C) approaches to strategy execution. put constructive pressure on the company's human resources department to dev D) that are likely to boost employee morale. making sure the company has a good strategic plan, staying on top of what is ha E) constructive pressure on the organization to achieve good results, pushing corre leading the development of stronger capabilities, and displaying ethical integrit spearheading social responsibility initiatives.

19 INCORRECT

What separates companies that make a sincere effort to be good corporate citizens from are content to do only what is legally required of them are shareholders who insist that senior executives practice corporate citizenship A) responsibility. B)is a strong board of directors that is committed to avoiding ethical scandals.

is pressure from environmental groups capable of executing a successful boyco C) products or services. is pressure from customers who expect the companies they do business with to D) responsible in their actions. are company leaders who believe that making a profit is not good enough and th E) should also include social and environmental metrics.

20 CORRECT

Which one of the following is not among the chief duties/responsibilities of a company directors insofar as the strategy-making, strategy-executing process is concerned? Directing senior executives as to what the company's long-term direction, objec A) model, and strategy should be and, further, closely supervising senior executive to implement and execute the strategy

B)Overseeing the company's financial accounting and financial reporting practice

C)Evaluating the caliber of senior executives' strategy-making/strategy-executing Being inquiring critics and exercising strong oversight over the company's direc D) and business approaches Instituting a compensation plan for top executives that rewards them for actions E) serve stakeholders' interests, most especially those of shareholders

Results Reporter
Out of 20 questions, you answered 3 correctly with a final grade of 15% 3 correct (15%) 17 incorrect (85%) 0 unanswered (0%)

CHAPTER 3
Your Results:
The correct answer for each question is indicated by a
1 CORRECT

Which of the following is not one of the questions that needs to be answered in thinking strategically about a company's external environment? What kinds of competitive forces are industry members facing, and how strong A) is each force? What are the company's competitively valuable resources and capabilities that B) can be used to form the foundation of its competitive approach? What market positions do industry rivals occupywho is strongly/weakly C) positioned and who is not?

D)What are the key factors of competitive success? What forces are driving changes in the industry, and what impact will these E) changes have on competitive intensity and industry profitability?

2 INCORRECT

In identifying an industry's dominant economic features, there is a need to consider such things as market size and growth rate, the number of buyers, the scope of competitive A) rivalry, the number of rivals, demand-supply conditions, product innovation, the presence of scale economies and/or learning/experience curve effects, and the pace of technological change. the threat of additional entry into the industry and what the industry's key B) success factors are. the strength of competitive pressures from producers of substitute products and C) which competitors are in which strategic groups. the extent and importance of seller-supplier collaborative partnerships, the D) extent and importance of seller-buyer collaborative partnerships, and the bargaining leverage of sellers and buyers. E)All of these.

3 CORRECT

Whether the buyers of an industry's product have strong or weak bargaining leverage over the terms and conditions of sale depends on how often that sellers alter their prices, how sensitive buyers are to price A) differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently. the frequency with which rival firms change strategies and the amount of B) advertising that sellers utilize. whether all buyers have the same degree of negotiating power, whether the item C) carries a high or low price tag, and whether there are many or few collaborative partnerships between sellers and buyers. whether buyers purchase in relatively large or small quantities, whether the D) costs of switching to competing brands or to substitute products are high or low, and how well informed buyers are about sellers' prices, products, and costs. whether buyer demand is seasonal or year-round, whether entry barriers are high E) or low, and whether competitive pressures from substitutes are strong or weak.

4 INCORRECT

Based on both the chapter discussion and the summary in Figure 3.4, competitive pressures stemming from substitute products are weaker when substitutes are higher-priced, buyers don't believe substitute products have equal A) or better features, and buyers' costs of switching to substitutes are relatively high. the industry consists of a relatively large number of rival sellers that are fairly B) equal in size and competitive capability. entry barriers are moderately high but by no means prohibitive and there is a C) fairly small pool of entry candidates. a number of customers buy in large volumes and are in a strong bargaining D) position to win concessions from sellers. E)buyer loyalty to the products they are currently purchasing is relatively low.

5 INCORRECT

Which of the following is not a factor in determining whether the suppliers to an industry are a source of strong, moderate, or weak competitive pressures? A)Whether certain needed inputs are in short supply Whether it is difficult or costly for industry members to switch their purchases B) from one supplier to another or to switch to attractive substitute inputs Whether the item being supplied is a standard commodity that is readily C) available from many suppliers at the going market price Whether the industry supply chain is global or mostly national, whether D) suppliers have a wide or narrow product line, and whether industry members place orders frequently or infrequently with suppliers Whether certain suppliers provide a differentiated input that enhances the E) performance or quality of the industry's product

6 INCORRECT

Which of the following is not a reason that industry rivals are often motivated to enter into strategic partnerships with key suppliers? To enhance the quality of parts and components being supplied and/or to reduce A) defect rates B)To speed the availability of next-generation components C)To reduce the bargaining power they face from buyers of their products D)To squeeze out important cost savings for both themselves and their suppliers E)To reduce inventory and logistics costs

7 INCORRECT

According to both the text discussion and the summary in Figure 3.6, competitive pressures associated with the threat of new entrants grow stronger when A)buyer demand is growing slowly and the pool of entry candidates is small. the number of customers for the industry's product is large and the product B) offerings of rival sellers are strongly differentiated. industry members are looking to expand their market reach by entering product C) segments or geographic areas where they currently do not have a presence, when current industry members are unable or unwilling to strongly contest the entry of newcomers, and when a newcomer can reasonably expect to earn attractive profits. there are not many competitors already in the industry, their products are highly D) differentiated, and buyers are brand loyal. a small percentage of companies in the industry are currently earning aboveE) average profits, entry barriers are high, and buyers are not brand loyal.

8 INCORRECT

Which of the following conditions generally raise the barriers to entering an industry? A) Low levels of brand loyalty on the part of customers and the presence of more than 20 rivals in the industry Rapid market growth, low buyer switching costs, and weak brand preferences B) and customer loyalty

C)Product offerings that are pretty much standardized from rival to rival High capital requirements, difficulties in building a network of distributorsD) retailers and securing adequate space on retailers' shelves, and the likelihood that industry incumbents will strongly contest the efforts of new entrants to gain a market foothold The industry is not characterized by scale economies and/or sizable E) learning/experience curve effects and few firms in the industry hold key patents and/or possess significant proprietary technology not readily available to a newcomer

9 INCORRECT

According to both the text discussion and the summary in Figure 3.7, which of the following is not among the factors that determine whether competitive rivalry among industry members is strong, moderate, or weak? A)Whether buyer demand for the product is growing rapidly or slowly B)Whether customers' costs to switch brands is low or high

How active industry rivals are in initiating fresh competitive moves and in using the various weapons of competition to improve their market standing and business performance Whether there are few or many rival sellers and whether there are big D) differences in their sizes and competitive capabilities Whether industry members are vertically integrated and whether the industry is E) characterized by significant scale economies and rapid technological change C)

10 INCORRECT

The rivalry among competing sellers in an industry intensifies A)when buyer demand for the product is growing rapidly. when customers are brand loyal and their costs to switch to competing brands or B) substitute products are relatively high. when buyer demand is strong and sellers have little or no excess capacity and C) only minimal inventories. as the number of rivals increases and as they become more equal in size and D) competitive capability. when the products of rival sellers are highly differentiated products and the E) industry consists of so many rivals that any one company's actions have little direct impact on rivals' business.

11 INCORRECT

Factors that cause the rivalry among competing sellers to be weak include A)low buyer switching costs. B)slow growth in buyer demand. rapid growth in buyer demand, buyer costs to switch brands are high, and so C) many industry rivals that any one company's actions have little impact on the businesses of its rivals. D)standardized or else weakly differentiated products among rival sellers. the presence of one or more rivals that are dissatisfied with their current position E) and market share.

12 INCORRECT

As a rule, the stronger the collective impact of the five competitive forces, A)the more strategic groups there are in an industry.

B)the lower the number of industry key success factors. the lower the combined profitability of industry participants and the more C) "competitively unattractive" is the industry environment. D)the weaker the industry's driving forces. the higher the barriers to entry and the less likely it is that industry members will E) make fresh strategic moves very frequently.

13 INCORRECT

The task of driving forces analysis is to A) identify all the underlying factors that can cause industry profitability to rise or fall in the years ahead.

B)predict what new forces of competitive and market change will emerge next. determine which of the five competitive forces is the biggest driver of industry C) change. identify which companies are being driven to move from one strategic group to D) another strategic group. identify what the driving forces are, assess whether the drivers of change are, on E) the whole, acting to make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces.

14 INCORRECT

Which of the following is not among the most common types of driving forces? Product innovation, marketing innovation, and increasing globalization of the industry Changes in the long-term industry growth rate, changes in who buys the product B) and how they use it, and growing buyer preferences for differentiated products Ups and downs in interest rates, changes in the number of seller-supplier C) collaborative alliances, and changes in overall industry profitability Emerging new Internet applications and capabilities, technological change, and D) the diffusion of technical know-how across more companies and more countries Changes in cost and efficiency, the entry or exit of major firms, and changing E) societal concerns, attitudes, and lifestyles A)

15 CORRECT

The procedure for constructing a strategic group map involves

A)

identifying the competitive characteristics that differentiate firms' market positions and competitive approaches.

B)selecting variables for the map's axes that are highly correlated. using only variables for the map's axes that are quantitative in nature (qualitative C) measures of market positions and competitive approaches are too subjective and unreliable). plotting the firms on a two-variable or two-dimensional map, drawing circles D) around those firms occupying about the same strategy space, and making the size of the circles for each strategic group proportional to the size of its members' share of total industry sales revenues. E)Both A and D

16 INCORRECT

A strategic group map is a helpful analytical tool for assessing why competitive pressures and driving forces usually impact the biggest strategic groups more so than the smaller groups. determining which companies have how big a competitive advantage and how B) good their prospects are for increasing their market shares. determining which company is the most profitable in the industry and why it is C) doing so well. determining who competes most closely with whom; evaluating whether D) industry driving forces and competitive pressures favor some strategic groups and hurt others; and ascertaining whether the profit potential of different strategic groups varies due to the strengths and weaknesses in each group's respective market positions. pinpointing which of the five competitive forces is the strongest and which is E) the weakest. A)

17 INCORRECT

Trying to determine what strategic moves rivals are likely to make next is interesting but usually has little bearing on a company's own best strategic moves. usually requires evaluating the industry's key success factors as well as B) determining how many driving forces are present. is best done by monitoring each rival's market share, earnings per share, and C) stock priceadverse changes in these measures signal the coming of a fresh move but as long as a company's performance on these measures is satisfactory the chance of fresh moves is slim. A) D)cannot be done effectively without first drawing a strategic group map. entails each rival's situation, understanding the thinking of their managers, and E)

evaluating the relative merits of their strategic options.

18 INCORRECT

An industry's key success factors can best be determined by studying the strategies of those companies in the industry's best strategic group and those in the worst strategic group. concern the particular product attributes, competencies, competitive capabilities, B) and intangible assets with the greatest impact on future success in the industry. are mainly a function of an industry's macro-environment and dominant C) economic features. can best be determined by identifying the similarities in the strategies of rival D) companiesthose strategy elements that are most commonly found in the strategies of rivals can be considered key success factors. usually relate to technology and manufacturing-related capabilities and rarely to E) distribution or marketing capabilities. A)

19 INCORRECT

Which of the following is not a good example of a marketing-related key success factor? A)A well-known and well-respected brand name B)Breadth of product line and product selection C)Product innovation capabilities D)Clever advertising E)Courteous, personalized customer service

20 INCORRECT

Which of the following is not an important factor for company managers to consider in drawing conclusions about whether the industry presents an attractive opportunity? Whether powerful competitive forces are squeezing industry profitability to A) subpar levels and whether competition appears destined to grow stronger or weaker B)The industry's growth potential Whether industry profitability will be affected favorably or unfavorably by the C) prevailing driving forces How many of the industry's key success factors do companies in the industry D)

typically incorporate into their strategies E)The company's competitive position in the industry relative to rivals

Results Reporter Chapter 04

1 INCORRECT

Evaluating a company's resources and capabilities, relative cost position, and competitive stre rivals does not include developing answers to which one of the following questions? A) How good is the company's value chain? B) Is the company competitively stronger or weaker than key rivals? C) What are the company's competitively important resources and capabilities? D) Are the company's prices and costs competitive? E) What strategic issues and problems merit front-burner managerial attention?

2 INCORRECT

Which one of the following is not a good indicator of how well a company's present strategy A) Whether it is achieving its stated financial and strategic objectives B) Whether it is an above-average industry performer

C) Whether the firm's sales and earnings are increasing or decreasing Whether the company's resource strengths and competitive capabilities outnumber it D) weaknesses and competitive vulnerabilities The rate at which new customers are acquired and whether the company's overall fin E) improving or on the decline

3 CORRECT

Which one of the following groups of characteristics is least likely to represent valuable com competitive capabilities? Physical assets such as state-of-the-art plants, attractive real estate locations, and wo A) facilities More employees than rivals, being in business more years than rivals, and smaller ca B) expenditures than rivals C) Intangible assets such as a well-known brand name

D) Strong collaborative partnerships with key suppliers and an experienced and capable

E) Organizational assets such as proven quality control skills or proprietary technology

4 INCORRECT

Which of the following is not a measure of the competitive power of a company's resource st A) How hard it is for competitors to copy the resource strength B) Whether the company has more resources/capabilities than any other key rival C) Whether a company's resource is really competitively valuable E) Whether the resource or capability is rare and something rivals lack

D) How easily the resource or capability can be trumped by the substitute resources/cap

5 INCORRECT

A company that lacks a single resource strength capable of contributing to competitive advan develop a distinctive competence through A) devising clever approaches to turning resource weaknesses into resource strengths. B) bundled resource strengths that can be leveraged to develop a core competence. C) changing its industry positioning and approach to building competitive advantage. D) the development of a new business model. improved employee training programs, new marketing promotions, or technological E) production processes.

6 INCORRECT

A company that is a disadvantage in the marketplace because it lacks competitively valuable by rivals B) should abandon strategy elements that have caused its weakness in the marketplace. C) undertake efforts to develop a distinctive competence.

A) should adopt a new competitive strategy that might better match the circumstances o

D) is virtually blockaded from using offensive strategies and must rely on defensive stra may be able to develop substitute resources that accomplish the same objective as th E) possessed by rivals.

7 INCORRECT

A core competence

A) is a more durable company resource than a "distinctive competence." usually resides in a company's technology and physical assets (state-of-the-art plants B) attractive real estate locations, modern distribution facilities, and so on) whereas a co usually resides in a company's human assets. is typically knowledge-based, residing in people and in a company's intellectual capi C) assets on the balance sheet; moreover, a core competence tends to be grounded in cr combinations of knowledge and expertise rather than being the product of a single d group. is usually tied closely to the caliber of a company's manufacturing capability and/or D) technology and know-how. is better suited to helping a company defend against external threats than in pursuing E) opportunities.

8 INCORRECT

A distinctive competence

A) is a more important competitive asset than a core competence. represents uniquely strong capability relative to rival companiesit qualifies as a co B) resource strength with competitive advantage potential. D) can underpin and add real punch to a company's strategy. E) All of the above.

C) is a competitively important value chain activity that a company performs better than

9 CORRECT

SWOT analysis A)

provides an appraisal of a company's resource strengths and competitive deficiencies opportunities, and external threats to its future well-being.

B) is a tool for benchmarking whether a firm's strategy is closely matched to industry ke C) reveals whether a company is competitively stronger than its closest rivals. D) examines the company's cost position activity by activity. E) is a competitive intelligence tool that discloses rivals' key weaknesses.

10 CORRECT

The industry or market opportunities that are most relevant to a company and those which its at capturing include B) opportunities which the company has the financial resources to pursue. C) opportunities that offer important avenues for growth. E) All of the above.

A) opportunities that are well-matched to the company's competitive capabilities and re

D) opportunities where the company has the greatest potential for competitive advantag

11 INCORRECT

Which of the following is not an example of an external threat to a company's future business Table 4.1)?

A) Mounting intensity of competition among industry rivals and costly new regulatory r

B) Having a weaker brand image than rivals and a smaller network of retailer dealers th

C) Shifts in buyer needs and preferences away from using the industry's product Vulnerability to unfavorable industry driving forces and adverse demographic chang D) curtail demand for the industry's product E) Growing bargaining power on the part of customers and/or suppliers

12 INCORRECT

Which of the following analytical tools are particularly useful for determining whether a com costs are competitive? B) SWOT analysis, competitive strength assessment, best practices analysis, and value

A) SWOT analysis, strategy assessment, activity-based costing analysis, and key succes

C) Value chain analysis and benchmarking. Competitive position assessment, competitive strength assessment, strategic group m D) analysis, and value chain analysis. SWOT analysis, best practices analysis, activity-based costing analysis, and competi E) assessment.

13 CORRECT

A company's value chain consists of

A) the activities a company performs in converting its resource weaknesses into resourc the collection of activities it performs in the course of designing, producing, marketi B) supporting its product or service. C) those activities a company performs that represent "best practices."

D) the activities that a company performs in developing a distinctive competence. the activities that represent a company's competencies, core competencies, distinctiv E) competitive capabilities.

14 CORRECT

Benchmarking A)

is inherently unethical if it involves companies that are direct competitors because it competitively sensitive information about the operations and costs of rivals. is not a valid tool for measuring the cost-effectiveness of an activity unless it is restr B) the same industry. entails comparing how different companies perform various value chain activities an C) company comparisons of the costs of these activities.

D) loses much of its managerial usefulness if it is done with the aid of third-party organ entails calculating the costs of performing each of the primary and related support ac E) company's value chain.

15 INCORRECT

A company's cost competitiveness is largely a function of A)

whether it does a good enough job of benchmarking its value chain activities against competitors so that it knows exactly how low to drive its costs to be cost-competitive how efficiently it manages its internally performed value chain activities and the cos B) of its suppliers and forward channel allies.

C) whether it does a better job of building its resource strengths more cost effectively th

D) whether it possesses more core competencies and competitive capabilities than rivals how closely its internally-performed activities are linked to the activities performed E) the activities performed by forward channel allies.

16 CORRECT

Strategic actions to eliminate a cost disadvantage A) B) C) D) E)

can aim at lowering costs (1) in the suppliers' part of the industry value chain, (2) in internally-performed activities, and/or (3) in the forward channel portion of the value work best when they aim at lowering the costs of performing those tasks and activiti company has core competencies and distinctive competencies. work best when aimed at increasing the amount of the company's low-cost competiti decreasing the amount of its high-cost competitive assets. are likely to be most effective when they are aimed at lowering the costs of the value a company performs internally. are most likely to be successful when they involve efforts to concentrate more comp talents on those value chain activities where the company already has the lowest cos

17 INCORRECT

Strategic actions to eliminate an internal cost disadvantage include A) implementing the use of best practices.

B) trying to eliminate some cost-producing activities altogether by revamping the value D) investing in productivity enhancing, cost-saving technology. E) All of these.

C) outsourcing high-cost activities to vendors capable of performing the activity at mor

18 INCORRECT

The options for attacking the high costs of items purchased from suppliers does not include w following?

A) Pressuring suppliers for more favorable prices Integrating backward into the business of high-cost suppliers and making the item in B) control the cost C) Switching to lower priced substitute inputs D) Raising prices to customers (so as to cover the high costs) E) Collaborating closely with suppliers to identify mutual cost-saving opportunities

19 INCORRECT

Which one of the following is not something that can be learned from doing a competitive str A)

Identifying the competitive factors where a company is strongest and weakest vis-kinds of offensive/defensive actions the company can use to exploit its competitive s its competitive vulnerabilities

B) Whether a company utilizes more best practices than rivals in performing its value c

C) Which of the rated companies is competitively strongest and what size competitive a Whether a company has a net competitive advantage or is a net competitive disadvan D) rivals (with the size of the advantage/disadvantage being indicated by the differences companies' competitive strength scores) Which rival company is competitively weakest and the areas where it is most vulner E) attackwhen a company has important competitive strengths in areas where one or weak, it makes sense to consider offensive moves to exploit rivals' competitive weak

20 CORRECT

Identifying the strategic issues that company managers need to address A) involves using the results of both industry and competitive analysis and evaluations internal situation.

B) pinpoints the precise things management needs to worry about. sets the agenda for deciding what actions to take next to improve the company's perf C) business outlook. entails locking in on what challenges the company has to overcome in order to be fin D) competitively successful in the years ahead. E) All of the above.

Results Reporter Chapter 05

1 INCORRECT

A company's competitive strategy deals with

A)the specific actions management plans to take to develop a better value chain than riv how it plans to unify its functional and operating strategies into a cohesive effort aime B) successfully taking customers away from rivals. deals exclusively with the specifics of management's game plan for securing a compe C) advantage vis--vis rivals.

D)its plans for under-pricing rivals and achieving product superiority. the specific actions management intends to take to strongly differentiate its product o E) from the offerings of rival companies in the industry.

2 INCORRECT

Competitive strategies that provide distinctive industry positioning and competitive advantage involve A)a customer value proposition, profit formula, and a collection of valuable resources.

B)striving for a high degree of customer loyalty to the company's brand. assembling a wide portfolio of company resources, competitive capabilities, and core C) competencies.

D)developing a better credit rating than rivals. choosing between (1) a market target that is either broad or narrow, and (2) whether t E) company should pursue a competitive advantage linked to low costs or product differentiation.

3 INCORRECT

The five generic types of competitive strategies include

A)offensive strategies, defensive strategies, differentiation strategies, and low-cost strate low-cost provider, broad differentiation, focused low-cost, focused differentiation, an B) cost provider. offensive strategies, defensive strategies, technological leadership strategies, and prod C) innovation strategies. low-price strategies, premium price strategies, middle-of-the-road strategies, and mar D) share leadership strategies. attacking competitor strengths, attacking competitor weaknesses, market leadership E) strategies, and product superiority strategies.

4 INCORRECT

A low-cost provider's basis for competitive advantage is A)using an everyday low pricing strategy to gain the biggest market share. B)bigger profit margins than rival firms. C)high buyer switching costs because of the company's differentiated product offering. D)meaningfully lower overall costs than competitors. E)a reputation for charging the lowest prices in the industry.

5 INCORRECT

Striving to be the industry's low-cost provider and achieving lower costs than rivals entails

A)eliminating or curbing nonessential activities. having a smaller labor force than rivals, paying lower wages than rivals, locating all f B) in countries where labor costs are low, and outsourcing many value chain activities to suppliers with world-class technological capabilities.

C)doing a better job than rivals in performing essential activities. aggressive use of activity-based costing, utilizing more best practices than rivals, and D) a narrower product line than rivals. E)Both A and C.

6 INCORRECT

Which of the following is not a distinguishing feature of a low-cost provider strategy?

A)The product line consists of a few basic models having minimal frills and acceptable The production emphasis is on continuously searching for ways to reduce costs witho B) sacrificing acceptable quality and essential features

C)The marketing emphasis is on making virtues out of product features that lead to low The strategic target is value-conscious buyers and sustaining the strategy depends on D) frequent advances in technology and occasional product innovations Sustaining the strategy revolves around managing costs down year-after-year and del E) good value at economical prices

7 CORRECT

A competitive strategy of striving to be the low-cost provider is particularly attractive when

A)buyers are large and incur low costs in switching their purchases from one seller to an B)most rivals are trying to differentiate their product offering from those of rivals. C)there are many ways to achieve higher product quality that have value to buyers. D)buyers are not swayed by advertising and are not very brand-loyal. E)most rivals are pursuing best-cost or broad differentiation strategies.

8 INCORRECT

Successful differentiation allows a firm to gain buyer loyalty to its brand (because some buyers are strongly attracted to the A) differentiating features and bond with the company and its products).

B)earn the highest profit margins of any company in the industry. attract many more buyers by charging a lower price than rivals and thereby take sales C) market share away from rivals. command a premium price for its product and/or increase unit sales (because addition D) buyers are won over by the differentiating features). E)Both A and D.

9 INCORRECT

Easy-to-copy differentiating features A)lead to excessive price competition. B)are less expensive to integrate into a product or service offering. C)tend to satisfy the needs of most buyers. D)should be patented before other companies imitate the features. E)do not offer the promise of sustainable competitive advantage.

10 INCORRECT

A broad differentiation strategy

is an attractive competitive approach whenever buyers' needs and preferences are too A) to be satisfied by a product that is essentially identical from seller to seller. can produce sustainable competitive advantage if the differentiating features possess B) buyer appeal and can't be copied or easily matched by rivals. works best when the basis for differentiation is superior performance features and buy C) switching costs are low. offers a better chance for gaining market share than low-cost or best-cost provider str D) and typically allows a firm to charge the highest price in the industry. E)Both A and B.

11 INCORRECT

The most appealing approaches to broad differentiation

A)are those that hinge upon first-rate R&D and frequent product innovation. involve features or attributes that have considerable buyer appeal and are hard or exp B) for rivals to duplicate. D)generally relate to product superiority or clever merchandising. E)are typically based on either superior product quality or superior customer service.

C)are those that either lower buyer switching costs or enhance the differentiator's brand

12 INCORRECT

In which one of the following market circumstances is a broad differentiation strategy genera well-suited? When buyer needs and preferences are too diverse to be fully satisfied by a standardiz A) product

B)When few rivals are pursuing a similar differentiation approach. When most competitors are using eye-catching ads to set their product offerings apart C) build a brand image that is differentiated When there are many ways to differentiate the product or service and many buyers pe D) these differences as having value When technological change is fast-paced and competition revolves around rapidly ev E) product features

13 INCORRECT

Which of the following is not one of the hazards of pursuing a differentiation strategy?

A)Trying to charge too high a price premium for the differentiating features Over-differentiating so that the features and attributes incorporated exceed buyer need B) requirements Trying to create strong brand loyalty rather than being content with weak brand loyal C) (which usually means lower costs and higher profitability) D)Differentiating on features or attributes that rivals can easily copy E)Overspending on efforts to differentiate the company's product offering

14 INCORRECT

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is

A)the extra attention paid to establishing a distinctive competence. their concentrated attention on serving the needs of buyers in a narrow piece of the ov B) market. C)greater opportunity for brand loyalty. their suitability for market situations where technological change is fast-paced and D) continuous product innovation is a key success factor. E)their bold strategic intent of global market leadership via heavy advertising.

15 CORRECT

A focused low-cost strategy involves a serving buyers in the target market niche at a lower cost and a lower price A) rival competitors.

B)is the hardest of the four generic types of competitive strategies to employ successful

C)involves the use of deep price discounting to capture customers. entails trying to wrest market share away from rivals via extra advertising, above-ave D) expenditures for promotional programs, and heavy use of point-of-sale merchandising techniques. cannot be sustained over time unless the focuser is aggressive in entering other segme E) where it also can achieve a low-cost advantage.

16 INCORRECT

A focused differentiation strategy aims at securing competitive advantage by providing buyers in the target market niche with the best performance features at the A) price.

B)catering to buyers looking for a medium-quality product at an average price. offering carefully designed products or services to appeal to the unique preferences an C) needs of a narrow, well-defined group of buyers. D)developing unique product attributes. E)convincing buyers that the company is a true leader in product innovation.

17 CORRECT

A firm pursuing a best-cost provider strategy

seeks to offer more value-adding features than the industry's low-cost providers and l A) prices than those pursuing differentiation. tries to have the best cost (as compared to rivals) for each activity in the industry's va B) chain. achieves competitive advantage because its operating activities are "best-in-industry" C) "best-in-world."

D)is a hybrid strategy based upon superior resources and a narrow market niche. a "middle of the road" strategic approach that attempts to satisfy the product or servic E) of consumers with average household incomes.

18 INCORRECT

Which of the following are distinguishing features of a best-cost provider strategy?

A)The strategic target is price-conscious buyers A marketing emphasis on charging a slightly higher price than rival brands having B) comparable features and attributes A product line that stresses wide selection, many product variations, and emphasis on C) differentiating features D)A competitive advantage based on more value for the money Using constant product innovation, excellent R&D skills, and periodic technological E) breakthroughs to sustain the strategy

19 INCORRECT

For a best-cost provider strategy to be successful, a company must have A)excellent supply chain capabilities and product design expertise.

B)economies of scope or greater scale economies than rivals. a superior value chain configuration and unmatched efficiency in managing value cha C) activities. D)superior product innovation skills and manufacturing capabilities. E)a short, low-cost value chain.

20 INCORRECT

A company's biggest vulnerability in employing a best-cost provider strategy is

A)relying too heavily on price discounting.

B)adding features not needed by the majority of buyers. not having the needed efficiencies in managing value chain activities to add differenti C) features without significantly increasing costs. being timid in cutting its prices far enough below high-end differentiators to win awa D) of their customers. E)relying excessively on outsourcing in an attempt to boost gross profit margins.

Results Reporter Chapter 06

1 INCORRECT

Which one of the following is not a strategic choice that a company must make to complement supplement its choice of one of the five generic competitive strategies? A)Which value chain activities, if any, should be outsourced B)Whether to bolster the company's market position and competitiveness via acquisition

C)Whether to employ a low-end strategy or a middle-of-the-road strategy or a high-end s E)Whether to enter into strategic alliances or collaborative partnerships

D)Whether to integrate forward or backward into more stages of the industry value chain

2 INCORRECT

Strategic alliances A)

are the cheapest means of developing new technologies and getting new products to m quickly.

B)are a proven means of reducing the costs of performing value chain activities. C)are best used to insulate a company from the impact of the five competitive forces.

D)help insulate a firm from the adverse impacts of industry driving forces. are collaborative arrangements where two or more companies join forces to achieve m E) beneficial strategic outcomes.

3 INCORRECT

Companies are motivated to enter into strategic alliances or cooperative arrangements

A)to expedite the development of promising new technologies or products. to bring together the personnel and expertise needed to create desirable new skill sets a B) capabilities to improve supply chain efficiency, and/or gain economies of scale in prod and/or marketing. C)to acquire or improve market access through joint marketing agreements. D)to overcome deficits in their own technical and manufacturing expertise. E)All of these.

4 INCORRECT

The most long-lasting strategic alliances A)

aim at teaming up with world-class suppliers or else companies with world-class know product innovation.

B)are those whose purpose is helping a company master a new technology.

C)are those formed to enable the partners to be consistent first movers or fast followers. (1) involve collaboration with suppliers or distributors, or (2) occur when both parties D) that continued collaboration is in their mutual interest. aim at insulating the partners against the impacts of the five competitive forces and ind E) driving forces.

5 CORRECT

Experience indicates that strategic alliances A)have a high "divorce rate."

B)are generally successful. work well in cooperatively developing new technologies and new products but seldom C) well in promoting greater supply chain efficiency. work best when they are aimed at achieving a mutually beneficial competitive advanta D) allies. are rarely useful in helping a company win the race for global industry leadership than E) establishing positions in industries of the future.

6 INCORRECT

Which of the following is not a typical reason that many alliances prove unstable or break apar A)Inability to work well together

B)Mounting competition between one or more allies in the marketplace Changing conditions that render the purpose of the alliance obsolete and the emergenc C) attractive technological paths Disagreement over how to divide the added market share and profits gained from joint D) collaboration E)Diverging objectives and strategic priorities

7 INCORRECT

Mergers and acquisitions are a much used strategy because they are an effective means of A)revamping a company's value chain.

B)facilitating the employment of both offensive and defensive strategies. creating a more cost-efficient operation, expanding a company's geographic coverage, C) extending a company's business into new product categories. gaining quick access to new technologies or other resources and competitive capabiliti D) trying to invent a new industry and lead the convergence of industries whose boundari being blurred by changing technologies and new market opportunities. E)Both C and D.

8 INCORRECT

Which one of the following statements about merger and acquisition strategies is true? A)

Merger and acquisition strategies are nearly always a superior strategic alternative to f alliances or partnerships with these same companies. Merger and acquisition strategies tend to be far more successful that forming strategic B) and cooperative partnerships with other companies. Merger and acquisition strategies often do not produce the hoped-for outcomesexam C) mergers/acquisitions where the results have been disappointing include the merger of S Nextel, the merger of Daimler Benz and Chrysler, FedEx's acquisition of Kinkos, Ford acquisitions of Jaguar and Land Rover, and eBay's acquisition of Skype. Mergers and acquisition strategies are a very high-risk strategy because of the financia D) using the company's cash resources to accomplish the merger or acquisition. Merger and acquisition strategies are one of the best ways for helping a company stren E) brand image.

9 INCORRECT

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

A)

Adding to a company's differentiation capabilities and perhaps achieving a differentiat competitive advantage

B)Reduced risk of disruptions in the supply and delivery of crucial materials and compon Reduced costs for items purchased from suppliers (if internal manufacture is more eco C) than buying from powerful suppliers who have big profit margins and provided entry b into a supplier's business are low or can be hurdled) Enhanced R&D capability, better opportunity to establish a core competence in supply D) management, more flexibility in incorporating state-of-the-art parts and components, a overall product quality Reduced vulnerability to powerful suppliers (who may be inclined to raise prices at ev E) opportunity)

10 INCORRECT

Which of the following is typically the strategic impetus for forward vertical integration?

A)To charge lower retail prices and thereby attract a bigger, more loyal clientele of custo B)To make it easier to expand the company's product line C)To gain better access to end users and better market visibility D)To achieve greater control over advertising and in-store retail merchandising E)To gain better access to greater economies of scale

11 CORRECT

Which of the following is not a strategic disadvantage of vertical integration? A)

It greatly reduces the opportunity for capturing maximum scale economies and achievi lowest possible operating costs.

B)Vertical integration poses all kinds of capacity-matching problems. It boosts a firm's capital investment in the industry and thus increases business risk if t C) industry becomes unattractive later. Integrating forward or backward can entail taking on the performance of value chain a D) that require radically different skills and business capabilities than the firm possesses. Vertical integration backward into parts and components manufacture can impair a com E) operating flexibility when it comes to changing out the use of certain parts and compon easier to change out parts and components made by outside suppliers than those made

12 CORRECT

Which of the following is not an advantage of outsourcing the performance of certain value ch activities to outsiders? Being able to reduce distribution costs by eliminating the use of wholesale distributors A) dealers and, instead, selling direct to end-users at the company's Web site. Allowing a company to concentrate on its core business, leverage its key resources, an B) better what it already does best Improving the company's ability to innovate by allying with "world-class" suppliers w C) cutting edge intellectual capital and are first-to-market with next-generation parts and components Being able to speedily and efficiently assemble diverse kinds of competitively valuabl D) expertise E)Obtaining higher quality and/or cheaper components or services

13 INCORRECT

Which of the following is not one of the principal offensive strategy options? A)Leapfrogging competitors by being the first adopter of next-generation technologies B)Offering an equally good or better product at a lower price C)Blocking the avenues open to challengers D)Attacking the competitive weakness of rivals E)Attacking market segments where key rivals earn big profits

14 INCORRECT

A blue ocean type of offensive strategy A)

is a pre-emptive strike type of price-cutting offensive used by a market leader to steal c away from higher-priced rivals.

B)involves deliberately attacking those market segments where a key rival makes big pro involves abandoning efforts to beat out competitors in existing markets and, instead, in C) new industry or new market segment that renders existing competitors largely irreleva allows a company to create and capture altogether new demand. involves using innovative advertising and deep price discounts to grab sales and marke D) from complacent or distracted rivals. employs highly creative, never-used-before strategic moves to attack the competitive E) weaknesses of rivals.

15 INCORRECT

A hit-and-run or guerilla warfare type of offensive strategy involves A)

random offensive attacks used by a market leader to steal customers away from unsusp smaller rivals. undertaking surprise moves to secure an advantageous position in a fast-growing and p B) market segment; usually the guerilla signals rivals that it will use deep price cuts to de newly-won position.

C)work best if the guerilla is the industry's low-cost leader. pitting a small company's own competitive strengths head-on against the strengths of m D) larger rivals. random raids by a small competitor to grab sales and market share from complacent or E) distracted rivals.

16 INCORRECT

Which one of the following is not a good type of rival for an offensive-minded company to tar A)Market leaders that are vulnerable B)Runner-up firms with weaknesses in areas where the challenger is strong C)Small local and regional companies with limited capabilities E)Struggling enterprises that are on the verge of going under

D)Other offensive-minded companies with a sizable war chest of cash and marketable se

17 INCORRECT

The purposes of defensive strategies are to

A)aggressively retaliate against rivals pursuing offensive strategies and prevent against p lower the risk of being attacked by rivals, weaken the impact of any attack that occurs, B) influence challengers to aim their offensive efforts at other rivals. guard against adverse changes in the company's macro-environment and insulate the c C) from the impact of industry driving forces.

D)strengthen a company's competitive advantage and reduce its exposure to business risk eliminate a company's resource weaknesses and competitive deficiencies, thereby mak E) invulnerable to competitive attack from would-be challengers.

18 CORRECT

Being first to initiate a particular move can have a high payoff when A)pioneering helps build up a firm's image and reputation with buyers. C)moving first can result in a cost advantage over rivals. E)All of these.

B)first-time buyers remain strongly loyal to pioneering firms in making repeat purchases

D)moving first can constitute a preemptive strike, making imitation extra hard or unlikely

19 CORRECT

In which of the following situations is being first to initiate a particular move not likely to resu positive payoff? A)When late movers can copy a successful pioneer's moves quickly and at lower cost B)When pioneering helps build up a firm's image and reputation with buyers

C)When first-time buyers remain strongly loyal to a pioneering firm in making repeat pu E)When moving first can result in a cost advantage over rivals

D)When moving first can constitute a preemptive strike, making imitation extra hard or u

20 INCORRECT

In which of the following cases are first-mover disadvantages not likely to arise? A)

When the costs of pioneering are much higher than being a follower and only negligib loyalty or cost savings accrue to the pioneer

B)When new infrastructure is needed before market demand can surge When the pioneer's skills, know-how, and products are easily copied or even bested by C) movers

D)When customer loyalty to the pioneer is low When technological change is rapid and following rivals find it easy to leapfrog the pio E) next-generation products of their own

Results Reporter Chapter 07

1 INCORRECT

Companies opt to expand into foreign markets for such reasons as to A) B) C) D) E)

boost returns on investment, broaden their product lines, avoid restrictions, and escape having to deal with strong labor unions gain access to new customers, achieve lower costs and enhance competitiveness, capitalize on core competencies, and spread b across a wider market base. grow sales faster than the industry average, reduce the competi rivals, and open up more opportunities to enter into strategic all avoid having to employ an export strategy, avoid the threat of c subsidization from rivals, and enable the use of a global strateg multicountry strategy. raise the entry barriers for industry newcomers, neutralize the b of important suppliers, grow sales faster, and increase the numb customers.

2 CORRECT

One of the biggest strategic challenges to competing in the international arena incl A)

whether to offer a mostly standardized product worldwide or w customize the company's offerings in each different country ma tastes and preferences of local buyers.

B) whether to charge the same price in all country markets. whether the company should engage in exporting, licensing, or C) enter new country markets.

D) how to take advantage of the low wage rates prevailing in some

E) whether to pursue a global strategy or an international strategy.

3 INCORRECT

Which one of the following is not a factor that a company must contend with in co markets of foreign countries? Variations in market growth rates from country to country and A) country-to-country differences in consumer buying habits and b preferences Country-to-country variations in host government policies and B) requirements The fact that product designs suitable for one country are some C) inappropriate in another D) Vulnerability to adverse shifts in currency exchange rates

E) A need to convince shippers to keep cross-country transportatio

4 INCORRECT

Which one of the following statements concerning the effects of fluctuating excha companies competing in foreign markets is true? Domestic companies trying to combat competition from foreign A) even more when their government's currency grows weaker in currencies of the countries where the imported goods are being Fluctuating foreign exchange rates greatly reduce the risks of c B) foreign marketsthe big problem occurs when exchange rates unreasonably low levels. Domestic companies under pressure from lower-cost imports ar C) their government's currency grows weaker in relation to the cur countries where the imported goods are being made. Manufacturers that are exporting much of what they produce ar D) their country's currency grows stronger relative to the currencie that the goods are being exported to. If the exchange rate of U.S. dollars for euros changes from $1.1 E) $1.25 per euro, then it is correct to say that the U.S. dollar has g

5 CORRECT

Which of the following is/are not "valid" strategy options for entering and/or comp markets? An import strategy, a strategic alliance strategy, a profit sanctua A) a cross-market subsidization strategy A global strategy where a company uses essentially the same co B) strategy approach in all country markets where it has a presenc

C) A localized multicountry strategy An export strategy and using strategic alliances or joint venture D) companies as the primary vehicle for entering foreign markets A franchising strategy and a strategy of licensing foreign firms E) company's technology or to produce and distribute the company

6 INCORRECT

The advantages of manufacturing goods in a particular country and exporting them markets are seriously compromised by the potential for local governmen A) raise tariffs on the imports of foreign-made goods into their cou are greatest when local consumers prefer products manufacture B) country's borders.

are weakened when that country's currency grows stronger rela currencies of the countries where the output is being sold. can be wiped out when that country's currency grows weaker re D) currencies of the countries where the output is being sold. C) E) are largely unaffected by tariffs or quotas.

7 INCORRECT

Using domestic plants as a production base for exporting goods to selected foreign

A) is usually a superior approach to competing in international ma can be a competitively successful strategy when a company is f B) vacant market niches in each foreign country.

C) can be an excellent initial strategy to pursue international sales.

D) is usually a weak strategy when competitors are pursuing licens can be a powerful strategy because the company is not vulnerab E) quotas.

8 INCORRECT

The advantages of using a licensing strategy to participate in foreign markets inclu A) being especially well suited to the exploit a profit sanctuary. B) being able to charge lower prices than rivals. C) enabling a company to achieve competitive advantage quickly

D) being able to achieve lower costs than with a localized multicou being able to leverage the company's technical know-how or pa E) committing significant additional resources to markets that are politically volatile, economically uncertain, or otherwise risky.

9 INCORRECT

The advantages of using a franchising strategy to pursue opportunities in foreign m A)

being particularly well suited to the international expansion eff with global strategies. having franchisees bear most of the costs and risks of establishi B) locations and requiring the franchiser to expend only the resour train, and support foreign franchisees.

C) helping build brand awareness in international markets

D) being well suited to companies who employ cross-market subsi gaining support from local governments in the form of subsidie E) local content requirements.

10 CORRECT

A "think local, act local" multicountry type of strategy A)

becomes more appealing the bigger the country-to-country diff tastes, cultural traditions, and market conditions. always makes a company vulnerable to rivals employing "think B) global" strategies.

C) protects a multinational firm against fluctuating exchange rates is generally an inferior strategy when one or more foreign comp D) pursuing a global low-cost strategy. employs essentially the same basic competitive strategy theme E) markets.

11 INCORRECT

A localized or multicountry strategy A)

is generally preferable to a global strategy in situations where b sensitive because a "think local, act local" type of multicountry suited to achieving low unit costs than a global strategy. is one where a company varies its product offering and compet B) from country to country in an effort to be responsive to differin preferences and market conditions. has two big drawbacks: (1) the bigger the country-to-country va C) strategy, the harder it is difficult to transfer a company's compe resources across country boundaries and (2) it does not promote single, unified competitive advantage. is generally inferior to a global strategy when it comes to pursu D) differentiation. E) Both B and C.

12 INCORRECT

A "think global, act global" approach to strategy-making is preferable to a "think l approach when

A) customer preferences vary significantly from country to country it is necessary to delegate strategy making to local managers w B) knowledge of local conditions.

C) plants need to be scattered across many countries to avoid high country-to-country differences are small enough to be accomm D) framework of a mostly uniform global strategy. host governments enact regulations requiring that products sold E) strict manufacturing specifications or performance standards.

13 INCORRECT

As indicated in Figure 7.1, the chief difference between a "think global, act global global, act local" approach to crafting a global strategy is that a "think global, act local" approach involves charging much dif A) the various country markets where the company competes. a "think global, act local" approach involves much less adheren B) same basic competitive strategy theme (low-cost, differentiatio focused) in all country markets. a "think global, act local" approach involves considerably less a C) utilizing the same capabilities, distribution channels, and marke worldwide. local managers are given more latitude in adapting the global st D) as may be needed to accommodate local buyer preferences and local market and competitive conditions. a "think global, act global" approach involves selling under a si E) worldwide whereas a "think global, act local" approach involve multiple brands (often a local brand for each local market).

14 INCORRECT

Which of the following is not a potential motivation for entering into strategic allia cooperative arrangements with foreign companies? A) To gain wider access to attractive country markets

B) To gain better access to scale economies in production and/or m To fill competitively important gaps in their technical expertise C) knowledge of local markets To better enable the use of a "think global, act global" strategy D) cross-market subsidization To share distribution facilities and dealer networks, thus mutua E) the allies' access to buyers

15 INCORRECT

Which of the following is not one of the ways in which a company can pursue com advantage by expanding outside its domestic market and competing multinationall Locating value chain activities among various countries in a ma A) costs

B) Pursuing blue ocean opportunities in the company's home coun Locating value chain activities among various countries in a ma C) achieve greater product differentiation Cross-border coordination of its activities in ways that contribu D) competitive edge

E) Employing a profit sanctuary strategy to wage a strategic offen

16 INCORRECT

Multinational competitors tend to concentrate activities in a limited number of loca A)

prices and competitive conditions are strongly linked across co form a world market. there are significant scale economies and/or steep learning curv B) associated with performing certain activities in a single location performing the activity are lower in particular geographic locat locations have superior resources, allow better coordination of or offer other valuable advantages.

C) the risk of fluctuating exchange rates is very high. host country governments can be persuaded to erect high tariff D) protect the company's operations from foreign competitors and imperative to be responsive to buyer needs and competitive con country. competitive conditions make it infeasible to employ a profit san E) or an export strategy.

17 INCORRECT

Dispersing the performance of value chain activities to many different countries ra concentrating them in a few country locations tends to be advantageous when high transportation costs make it expensive to operate fro A) locations. whenever buyer-related activities are best performed in location B) buyers.

C) if economies of scale are essential to achieving acceptable prod

D) Both A and B. E) None of the above.

18 INCORRECT

A country (or geographic region) becomes a company's profit sanctuary when

A) a majority of the company's customers are in that country. that country (or region) is where a company's prices are the hig B) country where it sells its product/service. a company pursues a "think local, act local" type of multicount C) country. the company earns substantial profits from sales in that nation d D) strong or protected competitive position. E) the company is the market share leader in that country market.

19 INCORRECT

Profit sanctuaries are valuable competitive assets because A) B) C) D) E)

they enable a company pursuing a "think global, act local" type more successful. a domestic competitor with multiple profit sanctuaries can wag win a competitive offensive against a global competitor whose scattered across many different countries. they provide the financial strength to support strategic offensiv country markets and can help fuel a company's race for global m leadership. without having at least two profit sanctuaries a company is virt from competing globally. they enable a company pursuing a global strategy to compete o footing with companies employing a multicountry strategy.

20 CORRECT

Which of the following is not a typical option that companies have to consider to t strategy to fit the circumstances of emerging country markets? Develop new sets of core competencies that allow a company t A) consumers of emerging markets in ways unmatched by rivals B) Prepare to compete on the basis of low price

Be prepared to modify aspects of the company's business mode accommodate local circumstances (but not so much that the com advantage of global scale and global branding) Try to change the local market to better match the way the com D) business elsewhere Stay away from those emerging markets where it is impractical E) to modify the company's business model to accommodate local C)

Results Reporter Chapter 08

Out of 20 questions, you answered 2 correctly with a final grade of 10%

2 correct (10%) 18 incorrect (90%) 0 unanswered (0%)

Your Results:
The correct answer for each question is indicated by a
1 INCORRECT

Which one of the following is not one of the elements of crafting corporate strategy for a diversified company?

A)Picking the new industries to enter and deciding on the means of entry Initiating actions to boost the combined performance of the businesses the firm has B) entered Standardizing the resource fits across the group of businesses the company has diver C) into Establishing investment priorities and steering corporate resources into the most attra D) business units Pursuing opportunities to leverage cross-business value chain relationships and strate E) fits into competitive advantage

2 INCORRECT

Important reasons for a company to consider diversification include A)a desire to avoid putting all of its "eggs" in one industry basket.

B)diminishing market opportunities and stagnating sales in its principal business. opportunities to leverage existing competencies and capabilities by expanding into C) businesses where these same resource strengths are key success factors and valuable competitive assets attractive. an opportunity to lower costs by entering closely-related businesses and/or opportun D) transfer a powerful and well-respected brand name to the products of other businesse thereby increase the sales and profits of these newly-entered businesses. E)All of these.

3 INCORRECT

To judge whether a particular diversification move has good potential for building added shareholder value, the move should pass the following tests: A)the attractiveness test, the barrier-to-entry test, and the growth test. B)the strategic fit test, the resource fit test, and the profitability test. C)the barrier-to-entry test, the growth test, and the shareholder value test.

D)the attractiveness test, the cost-of-entry test, and the better-off test. the resource fit test, the strategic fit test, the profitability test, and the shareholder val E) test.

4 INCORRECT

The better-off test for evaluating whether a particular diversification move is likely to gener added value for shareholders involves evaluating whether the diversification move will produce a 1 + 1 = 3 outcome such t A) the company's different businesses perform better together than apart and the whole up being greater than the sum of the parts. assessing whether the diversification move will make the company better off by B) increasing its resource strengths and competitive capabilities. evaluating whether the diversification move will make the company better off by ma C) it less subject to the bargaining power of customers and/or suppliers. assessing whether the diversification move will make the company better off by D) increasing its profit margins and returns on investment. E)All of these.

5 INCORRECT

Which of the following is not accurate as concerns entering a new business via acquisition,

internal start-up, or a joint venture? The big dilemma of entering an industry via acquisition of an existing company is A) whether to pay a premium price for a successful company or to buy a struggling com at a bargain price. Acquisition is generally the most profitable way to enter a new industry, tends to be B) suitable for an unrelated diversification strategy than a related diversification strategy usually requires less capital than entering an industry via internal start-up. Acquisition is the most popular means of diversifying into another industry, has the C) advantage of being quicker than trying to launch a brand-new operation, and offers a effective way to hurdle entry barriers. Joint ventures are an attractive way to enter new businesses when the opportunity is D) complex, uneconomical, or risky for one company to pursue alone, when the opportu in a new industry require a broader range of competencies and know-how than a com can marshal on its own, and/or when it aids entry into a foreign market. The big drawbacks to entering a new industry via internal start-up include the costs o E) overcoming entry barriers, building an organization from the ground up, and the extr time it takes to build a strong and profitable competitive position.

6 INCORRECT

The defining characteristic of related diversification (as opposed to unrelated diversification that each business the company has diversified into are utilizing similar competitive A) strategies.

B)the presence of cross-business value chain relationships and strategic fits. that each business the company has diversified into has very similar core competenc C) and competitive capabilities. that the company has about the same number of cash cow businesses as it does cash D) businesses. the existence of cross-industry resource fits and similar key success factors from ind E) to industry.

7 CORRECT

The strategic appeal of related diversification is that

it allows a firm to reap the competitive advantage benefits of skills transfer, lower co A) (due to economies of scope), cross-business use of a powerful brand name, and/or cr business collaboration in creating stronger competitive capabilities. it is less capital intensive than unrelated diversification because related diversificatio B) emphasizes getting into cash cow businesses (as opposed to cash hog businesses).

C)it involves diversifying into industries having the same kinds of key success factors. it is less risky than unrelated diversification because it avoids the acquisition of cash D) businesses.

it facilitates the achievement of greater economies of scale since the company only e E) those businesses that serve the same types of buyer groups and/or buyer needs.

8 INCORRECT

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

A manufacturer of golf shoes diversifying into the production of fishing rods and fish A) lures B)A homebuilder acquiring a building materials retailer

C)A steel producer acquiring a manufacturer of farm equipment A producer of snow skis and ski boots acquiring a maker of ski apparel and accessor D) (outerwear, goggles, gloves and mittens, helmets and toboggans) E)A publisher of college textbooks acquiring a publisher of magazines

9 INCORRECT

Economies of scope

stem from the cost-saving efficiencies of scattering a company's manufacturing/assem A) plants over a wider geographic area. have to do with the cost-saving efficiencies of operating across a bigger portion of an B) industry's total value chain.

C)stem from cost-saving strategic fits along the value chains of related businesses. refer to the cost-savings that flow from being able to combine the value chains of dif D) businesses into a single value chain. are like economies of scale and arise from being able to lower costs via a larger volu E) operation.

10 INCORRECT

Cross-business strategic fits can exist A)in the R&D and technology portion of the value chains of related businesses. B)in the supply-chain portion of the value chains of related businesses.

C)in the manufacturing or production portions of the value chains of related businesses

D)in the sales and marketing portion of the value chains of related businesses. All of the abovesince cross-business strategic fits can exist anywhere along the va E) chains of related businesses.

11 INCORRECT

The defining characteristic of unrelated diversification (as opposed to related diversification

the presence of cross-business resource fit (whereas the defining characteristic of rel A) diversification is the presence of cross-business strategic fit). that the value chains of different businesses are so dissimilar that no competitively B) valuable cross-business relationships are present (in other words, the value chains of company's businesses offer no opportunities to benefit from skills or technology tran across businesses, economies of scope, cross-business use of a powerful brand name and/or cross-business collaboration in creating stronger competitive capabilities). the presence of cross-business strategic fit (whereas the defining characteristic of rel C) diversification is the presence of cross-business resource fit). D)that the company's businesses are in different industries. E)the presence of cross-business financial fit.

12 CORRECT

Which one of the following is not part of the task of critiquing a diversified company's strat assessing its business makeup, and deciding how to improve overall company performance? Checking whether each business a company has diversified into can pass the profitab A) test, the capital gains test, the growth rate test, and the resource strength test

B)Checking for strategic fits and resource fits Ranking the performance prospects of the businesses from best to worst and determi C) what the corporate parent's priority should be in allocating resources to its various businesses Assessing the attractiveness of the industries the company has diversified into, both D) individually and as a group Assessing the competitive strength of the company's business units and determining E) many are strong contenders in their respective industries

13 INCORRECT

Calculating quantitative attractiveness ratings for the industries a company has diversified in involves determining the strength of the five competitive forces in each industry, calculating t A) ability of the company to overcome or contend successfully with each force, and obtaining overall measures of the firm's ability to compete successfully in each of its industries. determining each industry's average profit margins, calculating how far the firm's pro B)

margins are above/below the industry averages, and then using these values to draw conclusions about industry attractiveness. rating the attractiveness of each industry's strategic and resource fits, summing the C) attractiveness scores, and determining whether the overall scores for the industries as group are appealing or not. selecting a set of industry attractiveness measures, weighting the importance of each D) measure (with the sum of the weights adding to 1.0), rating each industry on each attractiveness measure, multiplying the industry ratings by the assigned weight to ob weighted rating, adding the weighted ratings for each industry to obtain an overall industry attractiveness score, and using the overall industry attractiveness scores to evaluate the attractiveness of all the industries, both individually and as a group. identifying each industry's average price, rating the difficulty of charging an aboveE) average price in each industry, and deciding whether the company's prospects for bei able to charge above-average prices make the industry attractive or unattractive.

14 INCORRECT

The basic purpose of calculating competitive strength scores for each of a diversified compa business units is to determine which business unit has the greatest number of resource strengths, A) competencies, and competitive capabilities and which one has the least. assess how strongly positioned each business unit is in its industry and the extent to w B) it already is or can become a strong market contender. C)rank the each business unit's strategic fits from highest to lowest. D)rank the each business unit's resource fits from highest to lowest. E)rank each business unit's strategy from best to worst.

15 INCORRECT

The 9-cell industry attractiveness-competitive strength matrix

is a valuable tool for ranking a company's different businesses from best to worst bas A) strategic fit.

B)shows which of a diversified company's businesses have good/poor resource fit. indicates which businesses have the highest/lowest economies of scale and which ha C) the highest/lowest economies of scope. uses quantitative measures of industry attractiveness and competitive strength to plot D) business's location on the matrixthe thesis underlying the matrix is that there are g reasons to concentrate the company's resources on those businesses having relatively strong competitive positions in industries with relatively high attractiveness and to in minimally or even divest those businesses with relatively weak competitive positions industries with relatively low attractiveness.

pinpoints which of a diversified company's businesses are resource-rich cash cows an E) which are resource-poor cash hogs.

16 INCORRECT

Checking a diversified company's business line-up for the competitive advantage potential o cross-business strategic fits involves searching for and evaluating how much benefit a diver company can gain from value chain match-ups that present opportunities to combine the performance of certain activities, thereby reducing cost A) capturing economies of scope. opportunities to transfer skills, technology, or intellectual capital from one business t B) another, thereby leveraging use of existing resources.

C)opportunities to share use of a well-respected brand name. opportunities for sister businesses to collaborate in creating valuable new competitiv D) capabilities (such as enhanced supply chain management capabilities, quicker first-to market capabilities, or greater product innovation capabilities). E)All of the above.

17 INCORRECT

Checking a diversified company's business lineup for resource fit does not involve which on the following "tests?" Determining whether a company has or can develop the specific resource strengths a A) competitive capabilities needed to be successful in each of its businesses. Determining whether recently acquired businesses are acting to strengthen the comp B) resource base and competitive capabilities or whether they are causing its competitiv managerial resources to be stretched too thinly. Determining whether each business adequately contributes to achieving companywid C) performance targets. Determining whether the company has enough cash hog businesses to supply capital D) cash cow businesses. Determining whether the company has adequate financial strength to fund the needs E) various businesses and maintain a healthy credit rating.

18 INCORRECT

Ranking a diversified company's businesses in terms of priority for resource allocation and capital investment should be done chiefly on the basis of appealing industry attractiveness and resource A) and secondarily on the basis of competitive strength and strategic fit with other businesses.

entails arraying the various businesses from the biggest cash hog down to the bigges B) cow; big cash hogs get the highest priority for resource allocation and big cash cows the lowest priority. should be done principally on the basis of which businesses offer the best prospects C) (given their industry attractiveness and competitive strength) and, also, have solid an appealing strategic fits and resource fits. should be based chiefly on relative market share, recent profitability, and potential fo D) achieving cash cow status. should be based primarily on cross-business resource fit considerations, each busines E) unit's relative market share, and each business's projected ability to cover its debt payments and generate positive cash flows.

19 INCORRECT

Once a firm has diversified and established itself in several different businesses, then its ma strategic alternatives include all but which one of the following? A)Broadening the firm's business scope by diversifying into additional businesses

B)Shifting from a multi-country to a global strategy Restructuring the company's business lineup with a combination of divestitures and n C) acquisitions to put a whole new face on the company's business makeup Sticking closely with the existing business lineup and pursuing the opportunities thes D) businesses present

E)Divesting some businesses and retrenching to a narrower base of business operations

20 INCORRECT

Corporate restructuring strategies

focus on broadening the scope of diversification to include a larger number of busine A) and boost the company's growth and profitability.

B)involves rightsizing the company's labor force to reduce the costs of salaries and ben

C)is directed at achieving a 1 + 1 = 3 effect from the company's diversification strategy focus on crafting initiatives to restore a diversified company's money-losing business D) profitability. involve making radical changes in diversified company's business lineup, divesting s E) businesses and acquiring new ones so as to put a new face on the company's business lineup.

Results Reporter

Chapter 09
Out of 20 questions, you answered 5 correctly with a final grade of 25% 5 correct (25%) 15 incorrect (75%) 0 unanswered (0%)

Your Results:
The correct answer for each question is indicated by a
1 CORRECT

Business ethics concerns

A)the application of ethical principles and standards to business activities, be a business commitment to safe products, high worker compensation, and p B) environment. C)conducting oneself appropriately in a business setting.

D)developing a special set of ethical standards for businesses to observe in co picking and choosing among various ethical standards of society to arrive E) standards that apply directly to operating a business.

2 INCORRECT

Ethical principles in business A)

concern the behavioral guidelines a company's top management and board company personnel regarding "what is right" and "what is wrong" in condu business. deal chiefly with the actions and behaviors required to operate companies B) manner. are arrived at by picking and choosing among the consensus ethical standa C) with a set of ethical standards that apply directly to operating a business. are not materially different from ethical principles in general and have to b D) society's standards of right and wrong, not by a special set of rules that bus apply to their own conduct. involve behavioral guidelines for balancing the interests of non-owner stak E) employees, suppliers, and the communities in which the company has oper interests of company shareholders.

3 INCORRECT

Unethical managerial behavior tends to be driven by such factors as A)

overzealous or obsessive pursuit of personal gain, wealth, and other self in culture that puts the profitability and good business performance ahead of heavy pressures on company managers to meet or beat performance target

B)the lack of a company code of ethics.

C)a lack of training in what is ethical and what is not. confusing differences between what is ethical behavior in one's personal li D) permissible in business. E)All of the above factors.

4 INCORRECT

A company's strategy needs to be ethical because A)

Potential for embarrassment to top management if the company's unethica exposed.

B)unethical strategies are inconsistent with or else weaken the corporate cult

C)ethics watchdogs are sure to blow the whistle on the company's unethical b

D)of the risks of prosecution by governmental authorities if an unethical strat a strategy that is unethical not only damages the company's reputation but E) consequences.

5 CORRECT

Which of the following are consequences of pursuing a strategy that has unethical A)Government fines and penalties B)Legal and investigative costs incurred by the company C)Customer defections D)Adverse effects on employee productivity E)All of these.

6 CORRECT

Notions of right and wrong, fair and unfair, moral and immoral, ethical and uneth

A)ultimately depend on a person's own values and beliefs. ultimately depend on the circumstancesnothing is really black or white w B) standards. D)are present in all societies, organizations, and individuals. E)vary enormously from country to country across the world.

C)are governed mainly by religious views held in different geographic region

7 INCORRECT

According to the school of ethical universalism, A)

what behaviors are "ethically right" and "ethically wrong" vary across relig of what is ethical or not are universal within religions. concepts of right and wrong universally apply to all business situations wi B) can vary across countries or cultures. ethical guidelines exist only when there is universal agreement as to what C) right" and "ethically wrong"; anything not universally viewed as unethical of what is ethically permissible. all societies and countries have some definition of what is ethically permis D) are universal); however, the definitions of what is ethically permissible va prevailing religious doctrines in each country. many of the same standards of what's ethical and what's unethical resonate E) societies regardless of local traditions and cultural normshence, to the ex moral agreement about right and wrong actions, common ethical standards conduct of personnel at companies operating in a variety of country marke circumstances.

8 INCORRECT

The thesis that since different societies and cultures have divergent values and sta "ethically right" and "ethically wrong" it is appropriate to judge behavior as ethica local customs and social mores A)is the basis for the theory of ethical variation. B)defines what is meant by "integrated social contracts theory." C)is a view that characterizes the school of ethical relativism.

D)accounts for why there is no such thing as ethical standards for business en

E)is the reason why codes of ethical and social morality have been establishe

9 CORRECT

If one adopts the thinking of the school of ethical relativism, then A)

there are multiple sets of ethical standards because what is ethical or uneth customs and social mores and can vary from one culture or nation to anoth

B)there is a "one-size-fits-all" set of authentic ethical standards. the preferred set of ethical standards is the one which society at large has p C) laws and regulations.

D)the prevailing ethical standards are the product of a system of "integrated s no ethical standards are ever truly "authentic"they exist only to the exten E) temporary shared conviction among company managers and company pers behavior is either ethically permissible or ethically impermissible.

10 INCORRECT

Companies that adopt the principle of ethical relativism in providing ethical guida personnel

A)are able to comply with the varying ethical standards of the world's differe

B)have no fair way to judge the ethical correctness of the conduct of compan D)have a uniform code of ethical standards that is applied globally. E)end up allowing each company employee to determine what set of ethical

C)quickly find themselves on a slippery slope with no ethical standards or pr

11 INCORRECT

According to integrated social contracts theory, A)

the views and principles of the school of ethical universalism are definitely is that ethics is a matter of personal responsibility not a matter of managem the ethical standards a company should try to uphold are governed both by B) universal ethical principles that are widely recognized as putting legitimate actions and behavior in all situations and (2) the circumstances of local cu shared values that further prescribe what constitutes ethically permissible b nothowever, universal ethical norms take precedence over local ethical

the standards of what is ethically permissible and what is not should be ba and moral conduct which each society/country/culture adopts and then ena the standards of what is ethically permissible should be determined by the D) contract" which each company employee signs as a condition of employm the only valid ethical standards are those which are universaland then on E) not absolute and provide some wiggle room according to the circumstance C)

12 INCORRECT

Integrated social contracts theory maintains that A)

all ethical standards are determined by societal norms and individuals have contract to live up to these standards. "first order" universal ethical norms always take precedence over "second B) norms.

C)there should be no absolute limits put on what is ethically or morally right

D)few nations or cultures have common moral agreement on what is ethically each country/culture/society has commonly held views about what constitu E) actions/behaviors that all individuals in that country/culture/society are ob

13 INCORRECT

According to the information presented in Table 9.1, the perceived degree of corru business people, academics, and risk analysts is highest in such places as Germany, France, Hong Kong, Chile, and Finlan A) countries as India, Paraguay, Indonesia, and South Africa. is highest in Finland, Denmark, New Zealand, and Sweden and lowest in I B) Paraguay, and Bangladesh. C)about the same in all countries that were surveyed. D)is lowest in the U.S., Japan, and Spain. E)is lowest in Denmark, New Zealand, Sweden, Singapore, and Finland.

14 INCORRECT

The theory of corporate social responsibility concerns A)a company's duty to maximize shareholder value.

B)the blending of shareholder interests and employee interests. a company's duty to establish socially acceptable core values and to have a C)

ethical conduct. the responsibility that top management has for ensuring that the company's D) are in the best interest of society at large. the balance between a company's (1) economic responsibility to reward sh E) (2) its legal responsibility to comply with the laws of countries where it op responsibility to abide by society's norms of what is moral and just and (4) philanthropic responsibility to contribute to the non-economic needs of soc

15 INCORRECT

Which of the following is not generally on a company's menu of actions to consid of social responsibility?

A)Actions to ensure that the company operates in an honorable and ethical m Actions to provide suppliers, distributors, and other value chain partners w B) margins Actions to build a workforce that is diverse with respect to gender, race, na C) perhaps other personal characteristics Actions to protect or enhance the environment (apart from what is required D) authorities)

E)Actions to create a work environment that enhances the quality of life for e

16 INCORRECT

Corporate citizenship goes beyond meeting society's expectations for ethical strate behavior by A)promoting company personnel for political offices. C)addressing unmet non-economic needs of society. E)ensuring that products meet high standards of performance and reliability.

B)enforcing ethical norms among the citizens of the communities in which it

D)make sizeable contributions to political action committees representing the

17 INCORRECT

Corporate sustainability involves

A)a corporate commitment to address the unmet non-economic needs of soci strategic efforts to meet the needs of today's customers, suppliers, sharehol B) other stakeholders in a manner that protects the environment and provides

resources needed by future generations. striking a balance between (1) the economic responsibility to reward share C) the legal responsibility to company with laws in countries where it operate responsibility to abide by society's moral norms, and (4) the discretionary responsibility to contribute to the non-economic needs of society. E)All of these.

D)developing the resource strengths necessary to develop a sustainable comp

18 INCORRECT

Companies committed to corporate sustainability

A)make major contributions to local civic and charitable organizations. consider the commitment to the environment as a "first order" priority, com B) as a "second order" priority, and commitment to shareholders as a "third o believe it is essential to strike a balance between shareholder interests and C) stakeholders such as suppliers, customers, employees, and the communitie

D)develop and market only products that are "environmentally friendly." undertake initiatives directed at improving the company's triple bottle line E) on economic, environment, and social metrics.

19 INCORRECT

Which one of the following is not a part of the business case for why companies s responsible manner?

A)Acting in a socially responsible manner reduces the risk of reputation-dam The aggressive pursuit of market share, revenues, and profits always puts t B) of violating society's social responsibility expectations.

C)Acting in a socially responsible manner is in the overall best interest of sha To the extent that a company's socially responsible behavior wins applause D) fortifies its reputation, a company may win additional patronage. Acting in a socially responsible manner can generate internal benefits (as c E) recruiting, workforce retention, training, and improved worker productivit

20 CORRECT

The business case for why companies should act in a socially responsible manner

A)helping avoid or preempt legal and regulatory actions that could prove cos

B)avoiding criticism from consumer, environmental, and human rights activi C)contributing to lower employee turnover and better worker productivity. D)the potential for increased buyer patronage. E)All of these.

Results Reporter Chapter 10

Out of 20 questions, you answered 2 correctly with a final grade of 10% 2 correct (10%) 18 incorrect (90%) 0 unanswered (0%)

Your Results:
The correct answer for each question is indicated by a . 1 Which of the following is not one of the principal managerial components associated INCORRECT with implementing and executing strategy? Adopting an organizational structure that supports strategies intended to create A) customer value. Ensuring that policies and procedures facilitate rather than impede strategy B) execution Reducing the layers of management to a bare minimum and making sure C) employees are empowered D) E)
2 CORRECT

Staffing the organization with people having the right skills and expertise Instilling a corporate culture that promotes good strategy execution

The overriding aim in building a management team should be to assemble a critical mass of talented managers who can function as agents of A) change and further the cause of first-rate strategy execution. B) C) select people who are charismatic and good communicators. choose managers who have substantial experience in the industry.

assemble a team of people who believe in the same leadership approaches and D) use the same approaches to people management. E)
3 INCORRECT

choose managers who have the same core values and ethical standards.

Recruiting and retaining capable employees is usually much more important to good strategy execution than is assembling a A) capable top management team. is easily the most critical aspect in building competitively valuable core B) competencies and capabilities. is more easily done by large multinational corporations because of their deep C) financial resources and stimulating job assignments. is largely a function of the skills and capabilities of the company's human D) resources staff. is important because the quality of an organization's people is always an essential E) ingredient of successful strategy executionknowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence.

4 INCORRECT

Which of the following is generally not among the practices that companies use to staff jobs with the best people they can find, particularly if intellectual capital greatly aids good strategy execution? Providing promising employees with challenging, interesting, and skill-stretching A) assignments Striving to retain talented, high-performing employees via promotions, salary B) increases, performance bonuses, stock options and equity ownership, fringe benefit packages, and other perks Fostering a stimulating and engaging work environment such that employees will C) consider the company a great place to work Coaching average performers to improve their skills and capabilities, while D) weeding out underperformers. Hiring only people below the age of 35 who have college degrees and a grade E) point average of B or better

5 INCORRECT

The rationale for making strategy-critical value chain activities the primary building blocks in a company's organizational scheme is based on the contribution it makes to improving labor productivity and reducing labor A) costs. B) the benefits of keeping the layers of management to a minimum.

the thesis that if activities crucial to strategic success are to have the resources, C) decision-making influence, and organizational impact they need, they have to be centerpieces in the organizational scheme. the benefit of keeping the organization structure simple and easy for employees D) to understand. E)
6 INCORRECT

making it easier to capture the benefits of centralized decision-making.

Which one of the following falsely describes a centralized approach to decisionmaking? Little discretionary authority is granted to frontline supervisors and rank-and-file A) employees. Hierarchical command-and-control structures speed an organization's responses B) to changing conditions because top-level managers are in a position to quickly review the situation and make a final decision. Tight control by a few senior managers makes it easy to fix accountability when C) things do not go well. There is an assumption that frontline personnel have neither the time nor the D) inclination to direct and properly control the work they are performing, and that they lack the knowledge and judgment to make wise decisions about how best to do their work. E) Top executives retina authority for most strategic and operating decisions.

7 INCORRECT

A change in strategy nearly always entails budget reallocations because A) new strategic initiatives can be costly or capital intensive.

units important in the prior strategy but having a lesser role in the new strategy B) may need downsizing while units and activities that now have a bigger and more critical strategic role may need more people, new equipment, additional facilities, and above-average increases in their operating budgets. the accompanying policy revisions and compensation incentives tend to require C) different levels of funding than before. of corresponding changes in the company's organizational structure and D) budgetary requirements. adopting best practices and pushing for continuous improvement tends to reduce E) costs and reduce overall resource requirements.
8 INCORRECT

Prescribing policies and operating procedures aid the task of implementing strategy by helping empower product champions and work teams.

A) paving the way for instituting TQM or Six Sigma programs and adopting best B) practices. providing top-down guidance regarding how things need to be none, enforcing C) consistency in how activities are performed, and promoting the creation of a work climate that facilitates good strategy execution. D) helping prevent the corporate culture from being unhealthy and weak.

pushing employees to accept the need for state-of-the-art operating and support E) systems.
9 INCORRECT

Business process reengineering is a tool for A) remodeling and refreshing a strategy-critical core competence.

pulling the pieces of strategy-critical activities out of different departments and B) unifying their performance in a single department or cross-functional work. C) reducing the size of a company's managerial bureaucracy.

boosting the quality of a company's product and the caliber of its customer D) service. E)
10 INCORRECT

expediting the development of an important new competitive capability.

Total quality management (TQM) A) B) C) D) is a philosophy of managing that involves convincing employees that superior product quality is the most reliable key to competitive success in the marketplace. is a tool for providing customers with the highest quality product of any company in the industry. involves managing company operations in a manner calculated to quickly and efficiently make quantum gains in the quality and effectiveness with which production activities are performed. is a philosophy of managing a set of business practices that emphasizes continuous improvement in all phases of operations, 100% accuracy in performing tasks, involvement and empowerment of employees at all levels, team-based work design, benchmarking, and total customer satisfaction. involves managing company operations in a manner calculated to result in mistake-free management of a company's entire business.

E)
11 INCORRECT

Six Sigma quality control

is a tool that is superior to TQM in achieving top-notch quality in manufacturing A) a product. consists of a disciplined, statistics-based system aimed at producing not more B) than 2.5 defects per million iterations. is based on three principles: (1) all work is a process; (2) all processes variability; C) and (3) all processes create data that explains variability. D) is the best practice for managing manufacturing and assembly activities.

is a disciplined, statistics-based approach to manufacturing or assembling a E) product and results in 5 defects per million iterations when implemented properly.
12 INCORRECT

Company strategies and value creating processes can't be effectively executed without internal operating systems that include: A) B) PCs, servers, web applications, and eBusiness solutions. TQM, reengineering, and Six Sigma programs.

customer data, employee data, supplier/partner data, operations data, and C) financial performance data. D) E)
13 INCORRECT

benchmarking and best practices. All of these.

Management's most powerful tool for mobilizing employee commitment to competent strategy execution and operating excellence is A) B) C) total quality management. business process reengineering. a properly designed reward structure.

making the company a great place to work in terms of pay scales, fringe benefits, D) and employee perks. effective screening of job applicants such that only the most motivated and E) energetic people are hired.
14 INCORRECT

Which of the following is not characteristic of a compensation and reward system designed to help drive successful strategy execution?

Making the performance payoff a major, not minor, piece of the total A) compensation package Keeping performance incentives and bonuses to less than 15% of total B) compensation C) Not skirting the system to find ways to reward effort rather than results

Having incentives that extend to all managers and all workers and generously D) rewarding people who turn in outstanding performances Making sure the time between achieving the target performance outcome and the E) payment of the reward as short as possible
15 INCORRECT

Which of the following is not an important non-monetary approach to enhancing motivation and helping drive successful strategy execution? Adopting promotion from within policies and acting on suggestions from A) employees B) Providing attractive perks and fringe benefits

Creating a work atmosphere in which there is genuine sincerity, caring, and C) mutual respect among employees and management Providing rank-and-file employees with representation on the company's board D) of directors Using frequent words of praise to recognize employees for commendable E) performance
16 INCORRECT

Which one of the following is not something that shapes and helps define a company's culture? The core values, beliefs, business principles, and traditions that permeate the A) workplace The work practices and behaviors that define "how we do things around here" B) The company's standards of what is ethically acceptable and what is not, along with the legends and stories that people repeat to illustrate and reinforce the company's core values, traditions, and business practices C) D) E) A company's approach to people management and its style of operating The strategy and business model that the company has adopted The "chemistry" that permeates its work environment

17 CORRECT

Which of the following is not one of the four types of unhealthy company cultures?

A) B) C) D) E)
18 INCORRECT

Bureaucratic cultures Change-resistant cultures Unethical and greed-driven cultures Politicized cultures Insular, inwardly-focused cultures

The hallmarks of a high performance corporate culture include A) a shared willingness to adapt core values and ethical standards to fit the changing requirements of an evolving strategy, use of a balanced scorecard approach to tracking company performance, and a gung-ho approach to discovering best practices. considerable political infighting that typically consumes a great deal of organizational energy, often with the result that what's best for the company takes a backseat to political maneuvering. a "can-do" spirit, pride in doing things right, no-excuses accountability, and a pervasive results-oriented work climate where people go the extra mile to meet or beat stretch objectives. charismatic managerial leadership, a lean management bureaucracy, and a mustbe-invented-here mindset. strong inclinations to adopt a wait-and-see posture, carefully analyze several alternative responses, learn from the missteps of early movers, and then move forward cautiously and conservatively with initiatives that are deemed safe.

B) C) D) E)

19 INCORRECT

When trying to change a problem culture, management should undertake such steps as A) selecting a team of rank-and-file employees to lead the culture change effort.

hosting company outings to help build camaraderie among employees and B) support for the culture change. drawing up an action plan to change the present culture and then persuading C) company personnel why this plan of action is good and will be successful. conducting an employee survey to determine the organization's cultural norms D) and what company personnel like and dislike about the current culture. identifying which aspects of the present culture are supportive of good strategy E) execution and which ones are not.

20 INCORRECT

Which one of the following is a substantive culture-changing action that a company's managers can undertake to alter a problem culture? A) Identifying aspects of the present culture that pose problems

Hold ceremonial events to recognize individuals whose actions and performance B) exemplifies what is called for in the new culture. Promoting individuals who have stepped forward to advocate the shift to a C) different culture and mandating that all company personnel attend culturetraining programs. Visible actions on the part of top management to demonstrate their personal D) commitment to the culture change. Shifting from decentralized to centralized decision-making so as to give senior E) executives more authority and control in driving cultural change