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| 1 | |
The competitive moves and business approaches a company's management are using grow the business, attract and please customers, compete successfully, conduct operations, and achieve the targeted levels of 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. |
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| 2 | |
Which one of the following is not related to actions and approaches that comprise a company's strategy? |
| | 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, sales and marketing, distribution, finance, and human resources) will be operated |
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| 3 | |
In answering the question, "How are we going to get there?" management must have deliberate plans for addressing such issues as |
| | A) | developing a sound business model and customer base. |
| | B) | changing market conditions, development of internal capabilities and competencies, and allocation of financial resources. |
| | C) | emergent strategy elements, deliberate strategy elements, and abandoned strategy elements. |
| | D) | "Where are we now?" and "Where do we want to go?." |
| | E) | how well the strategy fit the situation, has the strategy yielded competitive advantage, and has the strategy produced good financial performance. |
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| 4 | |
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 partnerships |
| | C) | Management actions to revise the company's financial and strategic performance targets |
| | D) | Actions to capture emerging market opportunities and defend against external threats to the company's business prospects |
| | E) | Actions to enter new geographic or product markets |
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| 5 | |
Which of the following is not one of the most frequently used strategic approaches to building competitive advantage? |
| | A) | Striving for a competitive edge based on bigger profit margins |
| | B) | Developing unmatched resource strengths and competitive capabilities |
| | C) | Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage over rivals |
| | D) | Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche |
| | E) | Outcompeting rivals based on differentiating features |
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| 6 | |
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. |
| | D) | deals with how management plans to maximize profits while, at the same time, operating in a socially responsible manner. |
| | E) | is the day-to-day demands of delivering a service or producing goods to be sold. |
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| 7 | |
Strategies that yield sustainable competitive advantage is important because |
| | A) | increases in shareholder value are contingent on a sustainable competitive advantage. |
| | B) | a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance. |
| | 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. |
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| 8 | |
A company achieves sustainable competitive advantage when |
| | A) | it has a low-cost business model. |
| | B) | it is able to increase shareholder value. |
| | C) | sufficient numbers of buyers believe the company has demonstrated a commitment to environmental sustainability. |
| | D) | it is consistently able to achieve both its strategic and financial objectives. |
| | E) | an attractive number of buyers have a lasting preference for its products or services as compared to the offerings of competitors. |
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| 9 | |
A strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage |
| | 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. |
| | E) | is the best indicator that the company's strategy and business model are well-matched and properly synchronized. |
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| 10 | |
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. |
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| 11 | |
Company strategies evolve because |
| | A) | it is a bad idea to do too much strategizing until a company has been in business long enough to know what strategies will work best. |
| | B) | most managers like to develop the strategy in bits and pieces rather than all at once. |
| | C) | of the ongoing need to respond to changing market conditions, the fresh moves of competitors, shifting buyer needs and preferences, emerging market opportunities, new ideas for improving the strategy, and any evidence that indicates the strategy is not working well. |
| | D) | many managers are conservative, preferring to carefully contemplate the best responses to new developments and avoiding the risks associated with developing a complete strategy too quickly. |
| | E) | a strategy does not really transition to a well-crafted stage until a company has been trying to execute it for a number of years and has learned what works and what doesn't. |
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| 12 | |
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 approaches since making on-the-spot changes is too risky. |
| | B) | a combination of defensive moves to protect the company's market share and offensive initiatives to set the company's product offering apart from rivals. |
| | C) | pretty much like the strategies of other industry members since all companies are confronting much the same market conditions and competitive pressures. |
| | D) | a blend of deliberate actions to improve the company's competitiveness and financial performance 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. |
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| 13 | |
Which of the following statements about a company's realized strategy is true? |
| | A) | A company's realized strategy is usually kept secret. |
| | B) | A company's realized strategy is typically planned well in advance and usually deviates little from the planned set of actions. |
| | C) | A company's realized strategy generally changes very little over time unless a newly-appointed CEO decides to take the company in a new direction with a new strategy. |
| | D) | A company's realized strategy is developed mostly on a day-to-day basis because of the constant efforts of managers to keep rival companies at a disadvantage. |
| | E) | A company's realized strategy is typically a blend of deliberate/planned initiatives and emergent/unplanned reactive strategy elements. |
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| 14 | |
A company's business model |
| | A) | determines whether its strategy will be ethical or not. |
| | B) | is management's storyline for how the strategy will result in achieving sustainable competitive advantage. |
| | C) | outlines the key components of its business approach and indicates how revenues sufficient to cover operating expenses will be generated. |
| | D) | identifies how the company plans to outmaneuver and outcompete key rivals and become a market leader. |
| | E) | sets forth the actions and approaches that it will rely on to earn the best profit margins in the industry. |
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| 15 | |
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. |
| | C) | should explain how the company will achieve high profit margins while at the same time charging relatively low prices to customers. |
| | D) | must be closely linked to the company's business strategy. |
| | E) | must generate revenues sufficient to cover costs and deliver good profitability. |
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| 16 | |
The difference between a company's strategy and a company's business model is that |
| | A) | strategy relates broadly to a company's action plan for running the business and building competitive advantage, while its business model relates to whether the revenues and costs flowing from the strategy will allow the business to earn satisfactory profits and returns on investment. |
| | B) | the strategy concerns how to achieve the company's vision and the business model concerns how to operate efficiently. |
| | C) | a company's strategy is management's game plan for building shareholder value whereas a company's business model is the game plan for accomplishing the business purpose or mission. |
| | D) | a company's strategy is developed by the board of directors and chief executive officer while its business model is developed by line managers. |
| | E) | a company's strategy concerns how to please customers while its business model concerns how to please shareholders. |
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| 17 | |
Which of the following statements concerning Microsoft's business model and Red Hat's business model (as discussed in Illustration Capsule 1.2) is false? |
| | A) | Microsoft has a proven business model while Red Hat's business model is unproven. |
| | B) | Microsoft's business model involves employing a cadre of highly skilled programmers to develop proprietary code; keeping the source code hidden from customers/users, and locking them in to using Microsoft's proprietary software. |
| | C) | Most of Microsoft's costs arise on the front end in developing the software and are thus "fixed"; the variable costs of producing and packaging the CDs provided to users are only a couple of dollars per copy-once the breakeven volume is reached, Microsoft's revenues from additional sales are almost pure profit. |
| | D) | Red Hat relies on the collaborative efforts of volunteer programmers from all over the world who contribute bits and pieces of code to improve and polish the Linux system. |
| | E) | Red Hat's business model is predicated on closely guarding its source code while Microsoft is a strong advocate of open or free source code. |
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| 18 | |
A winning strategy is one that |
| | A) | makes the company a market leader, is ethically and socially responsible, and maximizes profits. |
| | B) | is highly profitable and boosts the company's market share. |
| | C) | passes the profitability test, the ethics and social responsibility test, the customer satisfaction test, and the shareholder wealth test. |
| | D) | fits the company's internal and external situation, builds sustainable competitive advantage, and boosts company performance. |
| | E) | passes the ethical standards test, the competitive advantage test, and the profitability test. |
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| 19 | |
Which one of the following questions can be used to distinguish a winning strategy from a so-so or losing strategy? |
| | A) | What portion of the strategy was ultimately abandoned as market conditions changed as the strategy played out? |
| | B) | How well does the strategy fit the company's business model? |
| | C) | Does the company have a large number of differentiating features in comparison to rivals? |
| | D) | Has the strategy produced good financial performance? |
| | E) | Does the company have viable business model? |
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| 20 | |
Which of the following questions ought to be used to distinguish a winning strategy from a mediocre or losing strategy? |
| | A) | Did the strategy develop from an inclusive cooperative relationship between top-level management, line managers, and hourly personnel? |
| | B) | Has management responded to changing market conditions with emergent strategy elements? |
| | C) | Is the strategy built upon a viable business model? |
| | D) | Does the strategy strike a balance between shareholder interests and social responsibility? |
| | E) | Is the strategy well-matched to the company's situation, helping the company achieve a sustainable competitive advantage, and resulting in better company performance? |
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