BUS 400 Chapter 1

The most telling and trustworthy signs of good management are

good strategy and good strategy execution

The two crucial elements of a company's business model are

its customer value proposition and its profit formula

When a company possesses elements of a strategy that give buyers lasting reasons to prefer a company's products or services over those of competitors, it is said to have a

sustainable competitive advantage

Which of the three tests of a winning strategy assess how well a company's strategy matches the company's situation?

The fit test

A winning strategy must pass which three test?

The fit test, the competitive advantage test, and the cost test

Which of the following are the three tests that can be applied to determine whether a strategy is a winning strategy?

The fit test, the competitive advantage test, and the performance test.

A company achieves a competitive advantage whenever it has some type of edge over rivals in attracting buyers and coping with competitive forces.

True

A company's strategy is the set of actions that is managers take to outperform the company's competitors and achieve superior profitability

True

A company's strategy provides direction and guidance, in terms not only what the company should do, but also what it should not do.

True

A strategy stands a better chance of succeeding when it is predicated on actions, business approaches, and competitive moves aimed at (1) appealing to buyers in ways that set a company apart form its rivals and (2) staking out a market position that is not crowded with strong competitors

True

Strategy is about competing differently from rivals--doing what competitors don't do or, even better, doing what they can't do

True

The nitty-gritty issue surrounding a company's business model is whether it can execute its customer value proposition profitably.

True

The profit formula reveals how efficiently a company can meet customer wants and needs and deliver on the value proposition

True

A company's customer value proposition is defined as

V-P, where V is the value provided and P is the price.

Winning a sustainable competitive advantage over rivals generally hinges on both

building and competitively valuable expertise and capabilities that rivals cannot readily match and having a distinctive product offering.

Management's blueprint for delivering a valuable product or service to customers in a manner that will generate revenues sufficient to cover costs and yield an attractive profit is known as a company's

business model

A company's ________ sets forth the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to cover costs and realize a profit.

Business model

___________ involves either giving buyers what they perceive as superior value compared to the offerings of rival sellers or giving buyers the same value as others at a lower cost to the firm.

Competitive advantage

The _____ lays out the company's approach to satisfying buyer wants and needs at a price customers will consider a good value.

Customer value

The biggest portion of most company's current strategies are

Deliberate

Reactive strategy adjustments developed on the fly as changing conditions warrant typically make up which portion of the firm's strategy?

Emergent

A company's mission is the set of actions that its managers take to outperform the company's competitors and achieve superior profitability.

False

A company's strategy can be determined to be a winning strategy if it passes two of the three tests of a winning strategy, but fails the third test.

False

The nitty-gritty issue surrounding a company's business model is whether it can be specific its profit formula accurately

False

Which fo the following are not among the four most frequently used and dependable strategic approaches to setting a company apart from rivals, building strong customer loyalty, and winning a competitive advantage?

Flexible adaptive

___________ is a common defining characteristic that requires companies to repeatedly adapt their strategies.

High-veolcity industry change

A company's strategy includes choices about:

How to attract customers. How to compete against rivals. How to position the company in the marketplace.

A company's strategy does not include choices about which of the following?

How to maximize shareholder wealth

Which of the following is not a common reason why a company must be willing and ready to modify a strategy?

Managerial angst

A company's profit formula, on a per-unit basis, can be expressed as

P-C, where P is the price and C is the cost.

The evolving nature of a company's strategy means that the typical company strategy is a blend of ____________ initiatives and ___________ activities.

Proactive; reactive

The ___________ describes the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition.

Profit formula

A company's strategy in toto is commonly called its ______ strategy.

Realized

Which of the following are not elements to look for when trying to identify a company's strategy?

Actions to ensure that executive compensation levels match, or exceed, those of relevant competitors.