Business Strategy Exam Prep

The consumer goods companies listed below all pursue the same business model with the exception of

Dell laptops

A superior example of a company vision that is short, specific, memorable, clearly articulated, and forward-looking is Nike's vision "to create products, services and experiences for today's athlete while solving problems for the next generation. "Hilton Hotel's vision "to fill the earth with light and the warmth of hospitality. "Google's vision "to organize the world's information and make it universally accessible and useful."Correct Keurig's vision "to become the world's leading personal beverage systems company. "Whole Foods' vision "to be a dynamic leader in the quality food business. We are a mission-driven company that aims to set the standards of excellence for food retailers. We are building a business in which high standards permeate all aspects of our company. Quality is a state of mind at Whole Foods Market."

Google's vision "to organize the world's information and make it universally accessible and useful."

Ben Weprin is founder and CEO of Graduate Hotel, a growing chain of boutique hotels situated near college campuses and designed to cater to the nostalgia and local boosterism that are part of the culture of university towns. (Room keys are imprinted with the names of famous alumni, and public spaces are decorated with historical photos of campus life, vintage art, and other collegiate artifacts.) Mr. Weprin and his company are trying to create a brand that will find year-round business by catering to more than just alumni coming back for once-a-year football weekends or 10-year anniversaries of their graduating classes. What is the major question that Mr. Weprin and his team need to ask about his company's strategy? MWhat do customers do, and how to profile customers who buy a company's product and tailor sales strategy around them? What must managers do, and do well, to make a company a winner in the marketplace? What do suppliers do, and how to get supplies at the lowest cost to build a profitable business? What can shareholders do, and do well, to ensure a profitable company? What can employees do, and do well, to ensure customer satisfaction?

What must managers do, and do well, to make a company a winner in the marketplace?

Managerial jobs with strategy-making responsibility a. extend throughout the managerial ranks and exist in every part of a company—business units, operating divisions, functional departments, manufacturing plants, and sales districts. b. are primarily located in the strategic planning departments of large corporations. c. are found only at the vice-president level and above in most companies. d. are relatively rare because most strategy-making is done by the members of a company's board of directors. e. seldom exist within a functional department (e.g., marketing and sales) or in an operating unit (a plant or a district office) because these levels of the organization structure are well below the level where strategic decisions are typically made.

a. extend throughout the managerial ranks and exist in every part of a company—business units, operating divisions, functional departments, manufacturing plants, and sales districts.

A search engine giant specializes in all types of search items; provides a free translation feature for 80 different languages; stores all passwords for commonly visited sites in encrypted form; allows users to view ads on previously made related searches; provides suggestive search items to assist the user; allows users to view a collection of related web pages users might want to visit; and provides a faster load time and more accurate hits than its rivals. This search engine company uses a profit formula that primarily consists of providing a free translation feature for 80 different languages. allowing users to view ads on previously made related searches. allowing users to view a collation of related web pages users might want to visit. providing suggestive search items based on history of sites visited. providing a faster load time and more accurate hits than its rivals.

allowing users to view ads on previously made related searches.

Management's strategic vision for an organization spells out the organization's strategic intent and the actions and moves that will be undertaken to achieve it. spells out how the company will become a big moneymaker and boost shareholder value. charts a strategic course for the organization ("where we are going") and provides a rationale for why this directional path makes good sense. addresses the critical issue of "why our business model needs to change and how we plan to change it." describes in fairly specific terms the organization's strategic objectives and strategy.

charts a strategic course for the organization ("where we are going") and provides a rationale for why this directional path makes good sense.

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

crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance.

FaberRoad, a respected courier brand, is rapidly losing its market share to competitors who do overnight deliveries of packages or offer lower prices. The company's research department has found that many customers care more about knowing exactly when a package will arrive than getting it the next day. Which strategy would best address the current state of FaberRoad and help it regain its market? acquiring small transportation companies with cheaper trucks and tempos, rebranding, and using them for deliveries diversifying the different types of packages that can be transported and enabling booking through calls developing radio tags that could be attached to packages to allow for real-time tracking by customers' PCs and mobile phones employing night delivery drivers at a high cost and maintenance charges engaging in expensive advertising with new tag lines and famous celebrities to enhance its brand image in the market

developing radio tags that could be attached to packages to allow for real-time tracking by customers' PCs and mobile phones

The best example of a well-stated, specific financial objective is to achieve lower costs than any other industry competitor. maximize total company profits and return on investment increase earnings per share by 15 percent annually. boost revenues by a percentage margin greater than the industry average. gradually boost market share from 10 percent to 15 percent over the next several years.

increase earnings per share by 15 percent annually.

For John Sidanta, CEO and founder of Primaplast, a manufacturer of biodegradable plastic drinking straws made from recycled material, crafting and executing a strategy is a top-priority managerial task because: helps Primaplast management create tight fits between a company's strategic vision and its business model. allows Primaplast company personnel, and especially senior executives, to know the answer to "who are we, what do we do, and where are we headed?" is Primaplast management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance, especially in light of impending community and some food service outlets' bans on conventional plastic drinking straws. provides Primaplast with clear guidance as to what the company's business model and strategic intent are, and helps keep managerial decision-making from being rudderless. establishes how well Primaplast executives perform these tasks and are the key determinants of executive compensation.

is Primaplast management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance, especially in light of impending community and some food service outlets' bans on conventional plastic drinking straws.

You have been asked to evaluate Kampus Kombucha's mission statement, "To heal and refresh everyone we touch." You would most likely observe that Kampus Kombucha's mission statement portrays this company's aspirations for the future. specifically informs customers and employees "who we are, what we do, and why we are here." describes more of an objective and a result of what this company does instead of its purpose. specifies the buyer needs that it seeks to satisfy and the customer groups or markets it serves. is vague, fairly uninformative, and blurs the essence of this company's business activities.

is vague, fairly uninformative, and blurs the essence of this company's business activities.

Company Objectives

need to be broken down into performance targets for separate businesses, product lines, functional departments, and individual work units.

A company's strategy is a "work in progress" and evolves over time because of the

ongoing need of company managers to react and respond to changing market and competitive conditions.

Strategic approaches to set a company apart from rivals and achieve a sustainable competitive advantage are not likely to include striving to be the industry's high-price provider. focusing on a narrow market niche and serving buyers' special needs and tastes. outcompeting rivals on the basis of differentiating features that will appeal to a broad spectrum of buyers. developing a best-cost provider strategy that gives customers more value for the money. striving to be the industry's low-cost provider.

striving to be the industry's high-price provider.

A company's realized strategy evolves from one version to the next due to ongoing turnover in the managerial and executive ranks (new managers often decide to shift to a different strategy). pressures from shareholders to boost profit margins and pay higher dividends. changing management direction because of understanding several appealing strategy alternatives. the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms the importance of keeping the company's business model fresh and up-to-date.

the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms