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| 1 | |
Evaluating a company's resource capabilities, relative cost position, and competitive strength relative to 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 resource strengths and weaknesses and its external opportunities and threats? |
| | D) | Are the company's prices and costs competitive? |
| | E) | What strategic issues and problems merit front-burner managerial attention? |
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| 2 | |
Which one of the following is not a good indicator of how well a company's present strategy is working? |
| | 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 |
| | D) | Whether the company's resource strengths and competitive capabilities outnumber its resource weaknesses and competitive vulnerabilities |
| | E) | The rate at which new customers are acquired and whether the company's overall financial strength is improving or on the decline |
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| 3 | |
SWOT analysis |
| | A) | provides a good overview of whether a company's situation is fundamentally healthy or unhealthy. |
| | B) | is a tool for benchmarking whether a firm's strategy is closely matched to industry key success factors. |
| | 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. |
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| 4 | |
Which one of the following groups of characteristics is least likely to represent company resource strengths, competitive capabilities, or competencies? |
| | A) | Physical assets such as state-of-the-art plants, attractive real estate locations, and worldwide distribution facilities |
| | B) | More plants than rivals, more employees than rivals, being in business more years than rivals, and smaller capital investment expenditures than rivals |
| | C) | Valuable intangible assets such as a well-known brand name |
| | D) | Strong collaborative partnerships with key suppliers and an experienced and capable workforce |
| | E) | Valuable organizational assets such as proven quality control skills or proprietary technology |
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| 5 | |
A company resource weakness or competitive deficiency |
| | A) | is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace. |
| | B) | is usually a leading indicator or poor financial performance. |
| | C) | prevents a company from having a distinctive competence. |
| | D) | usually stems from inefficiencies in the company's value chain. |
| | E) | can usually be rectified by developing a strategic alliance or collaborative partnership. |
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| 6 | |
The industry or market opportunities that are most relevant to a company and those which its strategy should aim at capturing include |
| | A) | opportunities that are well-matched to the company's competitive capabilities and resource strengths. |
| | B) | opportunities which the company has the financial resources to pursue. |
| | C) | opportunities that offer important avenues for growth. |
| | D) | opportunities where the company has the greatest potential for competitive advantage. |
| | E) | All of the above. |
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| 7 | |
Which of the following is not an example of an external threat to a company's future business prospects? |
| | A) | Costly new regulatory requirements |
| | B) | Having a weaker brand image than rivals and a smaller network of retailer dealers than rivals |
| | C) | Unfavorable foreign exchange rates or a rise in interest rates |
| | D) | Vulnerability to adverse demographic changes that are likely to curtail demand for the industry's product |
| | E) | The emergence of cheaper and better technology |
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| 8 | |
Which of the following analytical tools are particularly useful for determining whether a company's prices and costs are competitive? |
| | A) | SWOT analysis, strategy assessment, activity-based costing analysis, and key success factor analysis. |
| | B) | SWOT analysis, competitive strength assessment, best practices analysis, and value chain analysis. |
| | C) | Value chain analysis and benchmarking. |
| | D) | Competitive position assessment, competitive strength assessment, strategic group mapping, SWOT analysis, and value chain analysis. |
| | E) | SWOT analysis, best practices analysis, activity-based costing analysis, and competitive strength assessment. |
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| 9 | |
A company's value chain consists of |
| | A) | the activities a company performs in converting its resource weaknesses into resource strengths. |
| | B) | the collection of activities it performs in the course of designing, producing, marketing, delivering, and 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. |
| | E) | the activities that represent a company's competencies, core competencies, distinctive competencies, and competitive capabilities. |
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| 10 | |
Activity-based cost accounting is used to |
| | A) | determine whether the value chains of rival companies are similar or different. |
| | B) | determine the costs of each primary and support activity comprising a company's value chain and thereby reveal the nature and make-up of a company's internal cost structure. |
| | C) | compare the costs of essential activities to those performed by rivals. |
| | D) | evaluate the accuracy of a company's financial statements. |
| | E) | None of the above accurately describes what activity-based costing is about. |
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| 11 | |
Benchmarking |
| | A) | is inherently unethical if it involves companies that are direct competitors because it involves gathering competitively sensitive information about the operations and costs of rivals. |
| | B) | is not a valid tool for measuring the cost-effectiveness of an activity unless it is restricted to companies in the same industry. |
| | C) | entails comparing how different companies perform various value chain activities and then making cross-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 organizations. |
| | E) | entails calculating the costs of performing each of the primary and related support activities in a company's value chain. |
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| 12 | |
Vertical integration strategies |
| | A) | are the basis of a sustainable competitive advantage. |
| | B) | are usually supported by one or more strategic alliances with key supply chain partners. |
| | C) | offer good potential to expand a company's lineup of products and services. |
| | D) | are particularly effective in boosting a company's ability to expand into additional geographic markets, particularly the markets of foreign countries. |
| | E) | extend a company's competitive scope within the same industry by expanding its operations across more parts of the industry value chain. |
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| 13 | |
The big risk of employing an outsourcing strategy is |
| | A) | driving forces may favor fully integrated firms. |
| | B) | slowing response times to changing market conditions. |
| | C) | hurting a company's R&D capability. |
| | D) | hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success. |
| | E) | outside vendors may increase prices and thereby put the company at a competitive disadvantage vis-à-vis its rivals. |
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| 14 | |
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 chain. |
| | C) | outsourcing high-cost activities to vendors capable of performing the activity at more cheaply. |
| | D) | investing in productivity enhancing, cost-saving technology. |
| | E) | All of these. |
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| 15 | |
The options for attacking the high costs of items purchased from suppliers does not include which one of the following? |
| | A) | Pressuring suppliers for more favorable prices |
| | B) | Integrating backward into the business of high-cost suppliers and making the item in-house so as to better 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 |
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| 16 | |
A firm pursuing a best-cost provider strategy |
| | A) | seeks to offer more value-adding features than the industry's low-cost providers and lower prices than those pursuing differentiation. |
| | B) | tries to have the best cost (as compared to rivals) for each activity in the industry's value chain. |
| | C) | achieves competitive advantage because its operating activities are "best-in-industry" or "best-in-world." |
| | D) | is a hybrid strategy based upon superior resources and a narrow market niche. |
| | E) | a "middle of the road" strategic approach that attempts to satisfy the product or service needs of consumers with average household incomes. |
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| 17 | |
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. |
| | C) | a superior value chain configuration and unmatched efficiency in managing value chain activities. |
| | D) | superior product innovation skills and manufacturing capabilities. |
| | E) | a short, low-cost value chain. |
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| 18 | |
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. |
| | C) | not having the needed efficiencies in managing value chain activities to add differentiating features without significantly increasing costs. |
| | D) | being timid in cutting its prices far enough below high-end differentiators to win away many of their customers. |
| | E) | relying excessively on outsourcing in an attempt to boost gross profit margins. |
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| 19 | |
The value of doing competitive strength assessment is to |
| | A) | determine the competitive power of its business strategy. |
| | B) | learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage vis-à-vis key rivals. |
| | C) | learn whether a company has a distinctive competence. |
| | D) | learn how its costs and margins compare to those of its rivals. |
| | E) | prepare a competitive balance sheet of the company's resource strengths and competitive liabilities. |
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| 20 | |
Identifying the strategic issues that company managers need to address |
| | A) | involves using the results of both industry and competitive analysis and evaluations of the company's internal situation. |
| | B) | pinpoints the precise things management needs to worry about. |
| | C) | sets the agenda for deciding what actions to take next to improve the company's performance and business outlook. |
| | D) | entails locking in on what challenges the company has to overcome in order to be financially and competitively successful in the years ahead. |
| | E) | All of the above. |
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