Business Strategy Exam 1 Study

A "balanced scorecard" that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because A. managers need to put roughly equal emphasis on short-term and long-term performance targets. B. financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities, whereas strategic performance measures are leading indicators of a company's future financial performance and business prospects. C. managers need to avoid strategic management processes that reflect the results of past decisions and organizational activities. D. equal emphasis on good strategy execution and good business model execution is an attribute of the most highly successful companies. E. managers typically forget to put equal emphasis on financial and strategic objectives.

B. financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities, whereas strategic performance measures are leading indicators of a company's future financial performance and business prospects.

The Balanced Scorecard A. primarily tracks a company's financial performance to deliver better financial results from its operations. B. provides a company's employees with clear guidelines about how their jobs are linked to the overall objectives of the organization. C. strikes a balance between past results and future performances. D. provides a company's management with detailed information on how each employee contributes to the company's overall success. E. links financial performance objectives to executive bonus programs.

B. provides a company's employees with clear guidelines about how their jobs are linked to the overall objectives of the organization.

Tailoring a company's business model to accommodate the unique local circumstances of developing countries is best exemplified by Tata Motors' number-one ranking in J. D. Power Asia Pacific's annual new-vehicle overall quality category. Home Depot's reliance on its value propositions only in some developing countries. Unilever's development of a low-cost detergent, named Wheel, for the Indian market. Apple's reputation for competitive strength in consumer electronics. Dell's entry into China by deviating from its traditional Internet-based orders to accommodate orders over phone and fax.

Dell's entry into China by deviating from its traditional Internet-based orders to accommodate orders over phone and fax.

Leyla and Sofia have been assigned a capstone strategy project to identify approaches to defend against the entry of multinational companies into Vietnam, considered an emerging market. What are two strategic approaches? Deploy (1) acquisition and (2) rapid-growth strategies to better defend against expansion-minded internationals. Attempt to (1) change the local market to better match the way the company does business elsewhere and (2) reassign managers and staff from other nations to "glocalize" the business. Be prepared to (1) modify aspects of the company's business model and (2) use global branding to overcome local rivals. Take concrete steps to (1) concentrate each activity your company performs in each emerging market, and (2) locate specific activities in only those emerging markets that are low-wage countries. Pursue (1) new actions to contend on a domestic level and (2) rely solely on joint ventures with domestic businesses.

Deploy (1) acquisition and (2) rapid-growth strategies to better defend against expansion-minded internationals.

Top management's views and conclusions about the company's long-term direction and which product-customer-market-technology mix seems optimal for the road ahead together constitute a company's A. corporate culture. B. public relations identity. C. competitive advantage. D. mission statement. E. strategic vision.

E. strategic vision.

What makes a politicized internal environment so unhealthy? Managers tend to exude such negative traits as arrogance, greed, and an "ends-justify-the-means" mentality in pursuing stretch revenue and profitability targets. It consumes a great deal of organizational energy, often with the result that what is best for the company takes a back seat. It gives rise to nepotism and a failure to recruit the right people. Skepticism about the importance of new developments and a fear of change are the norm. It is composed of incompatible subcultures that embrace conflicting business philosophies.

It consumes a great deal of organizational energy, often with the result that what is best for the company takes a back seat.

Which characterization of the following companies' corporate cultures is true? Goldman Sachs' greed-driven culture is based on the slogan "Do good. Have fun. Make money." Eastman Kodak's high-performance culture fosters openness and sharing of company-developed technology. W. L. Gore's change-resistant culture is based on delivering sustainable rewards to its shareholders. Nordstrom's symbolic culture encourages the zealous pursuit of low costs and frugal operating practices. PUMA's high-performance culture identifies and promotes high potential and high-performance individuals.

PUMA's high-performance culture identifies and promotes high potential and high-performance individuals.

You have been assigned to research the export strategies of several global companies. Which of the following would you consider to be a good example of a dominant export strategy? Tiffany's, which solely offers franchises to store operators outside of the United States. Lyft, which allows ride-sharing operators to use its trademarks, services, and product tie-ins for a fee. The United States, which is home to the world's three largest producers and suppliers of artificial heart valves. Levi Strauss Corp.'s' common stock, which is owned by the family, but is not available for public purchase. Tinder, which generates 44 percent of its dating app revenue outside the United States.

The United States, which is home to the world's three largest producers and suppliers of artificial heart valves.

Which of the following receives a boost from corporate social agendas that address only social issues? a company's reputation for corporate citizenship a company's competitive strength in the marketplace higher customer satisfaction with products greater resource management greater employee retention at all levels

a company's reputation for corporate citizenship

Company cultures that spawn an ethically corrupt or amoral work climate encourage a disregard for "first-order" ethical norms and a preference for "second-order" ethical norms. a tendency in employees to ignore "what's right" and engage in any behavior they think they can get away with. a disregard for "second-order" ethical norms and a preference for "first-order" ethical norms. self-dealing much more often than short-termism. managerial actions to boost short-term revenues and earnings at the expense of long-term financial gains.

a tendency in employees to ignore "what's right" and engage in any behavior they think they can get away with.

Suppliers with strong bargaining power can erode industry profitability by adopting all of the following, except charging industry members exceedingly higher prices. accounting for a large fraction of the total costs of the industry's products. limiting industry members' opportunities to find a better deal. influencing the terms and conditions of supply in their favor. passing costs to industry members.

accounting for a large fraction of the total costs of the industry's products.

A major drawback of ethical relativism is that adoption of ethical relativism can be dangerous and might lead to the conclusion that if a country's culture is accepting of bribery, environmental degradation, and exposing workers to dangerous conditions, then so much the worse for honest people, environmental protection, and safe working conditions. adoption of ethical relativism creates unnecessary rigidity that comes from having universal ethical standards for company personnel. it is not possible to measure the compliance of company personnel to ethical relativism due to the different standards worldwide. a one-size-fits-all set of ethical standards hinders personnel to do their work properly and effectively. a company will end up allowing each employee to determine what set of their ethical standards to observe.

adoption of ethical relativism can be dangerous and might lead to the conclusion that if a country's culture is accepting of bribery, environmental degradation, and exposing workers to dangerous conditions, then so much the worse for honest people, environmental protection, and safe working conditions.

TOMS Shoes' company values are focused on the wealth maximization of shareholders. strictly limited in number (not more than two per company). barely distinguishable among those of other rivals in the footwear industry. directly linked to this company's strategic vision, whereas its mission has other underlying assets. an integral part of this company's DNA; its executives seek to ingrain designated core values into corporate culture.

an integral part of this company's DNA; its executives seek to ingrain designated core values into corporate culture.

The key success factors in an industry are the major underlying causes of change in industry and competitive conditions affecting the company directly. are those competitive factors that most affect industry members' ability to prosper in the marketplace. hinge on how many different strategic groups the industry has. are determined by the industry's driving forces. depend on how many rivals are trying to move from one strategic group to another.

are those competitive factors that most affect industry members' ability to prosper in the marketplace.

The multidomestic strategy of "think local, act local" is most appropriate when the need for local responsiveness is low. facilitates the transfer of a company's capabilities, knowledge, and other resources across country borders. becomes more appealing when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly. avoids host country ownership requirements and import quotas. is conducive to building a single worldwide competitive advantage.

becomes more appealing when country-to-country differences in buyer tastes, cultural traditions, and market conditions vary significantly.

Whose duty is it to exercise strong oversight and ensure that the five tasks of strategic management are conducted in a manner that is in the best interests of shareholders and other stakeholders? lower-level managers senior managers government regulators boards of directors activist investors

boards of directors

You are the owner of the Voracious Vegetarian, a single-business healthy fast-food restaurant. Your strategy-making hierarchy would most likely consist of business strategy, divisional strategies, and departmental strategies. business strategy, functional strategies, and operating strategies. business strategy, divisional strategy, and operating strategy. managerial strategy, business strategy, and divisional strategies. corporate strategy, divisional strategies, and departmental strategies.

business strategy, functional strategies, and operating strategies.

Rivalry among competing sellers increases when the firms in the industry have low storage costs. the rivals face low exit barriers. the firms in the industry have low fixed costs. buyer costs to switch brands are high. buyer demand is growing slowly or declining.

buyer demand is growing slowly or declining.

Bargaining power of buyers is weaker when buyer costs of switching to competing products are low. buyer demand is weak in relation to industry supply. buyers are not very price-sensitive. buyers are large and few relative to the number of industry sellers. buyers have the ability to postpone purchases.

buyers are not very price-sensitive.

You have been asked to analyze the Value Net of the craft brewing and distilling industries in your state, and you have observed close relationships between those artisanal industries and local hospitality businesses (such as restaurants and lodging facilities) in the region under study. Those local hospitality businesses can be said to be cohabitors. competitors. cooperators. complementors. customers.

complementors.

A company's environmental sustainability strategy entails business practices that meet the needs of the future by rationing what is provided to present-day customers. consists of a company's actions to protect the environment, provide for the longevity of natural resources, and maintain ecological support systems for future generations. is incompatible with the triple-bottom-line approach because it does not take into account people and profits. has a strong historical correlation with increases in the well-being of the environment and economic growth. always takes a back seat to strategies designed to improve a company's standing in the marketplace.

consists of a company's actions to protect the environment, provide for the longevity of natural resources, and maintain ecological support systems for future generations.

The distinctive characteristic of an unhealthy corporate culture is said to be centralized decision making. decentralized human resource policies and procedures. an aversion to offsite employee training programs. a reluctance to engage in business process reengineering, TQM, and Six Sigma. counterproductive cultural traits that adversely impact the work climate and company performance.

counterproductive cultural traits that adversely impact the work climate and company performance.

A greenfield venture strategy involves creating a subsidiary business by setting up all aspects of the operation from the ground up. using a domestic plant as its production base. avoiding the risk of committing resources to enter foreign markets. exporting into a foreign market by marketing indirectly thru local forward channel allies. building a presence in a foreign market by allocating limited resources, thus hedging the economic risk.

creating a subsidiary business by setting up all aspects of the operation from the ground up.

An effectively worded mission statement should describe the company's activities in the vaguest terms possible. express that making a profit is the company's true business purpose. specify the buyer needs that the company seeks to satisfy and the customer groups or markets it serves. describe the company's current business and purpose: "who we are, what we do, and why we are here." specifically mention the enterprise's future business and purpose.

describe the company's current business and purpose: "who we are, what we do, and why we are here."

Crafting and executing a company's strategy primarily consists of developing a strategic vision and mission, setting objectives, monitoring developments, evaluating performance, and initiating corrective adjustments in the company's vision, mission, objectives, and strategy. choosing employees who can support the strategy execution and strive for change. hiring outside consultants to execute any chosen strategy effectively. developing a set of values to safeguard the company from criticism of its practices. achieving financial performance outcomes on a regular, sustainable basis.

developing a strategic vision and mission, setting objectives, monitoring developments, evaluating performance, and initiating corrective adjustments in the company's vision, mission, objectives, and strategy.

CSR strategies that are directed at improving a company's "triple bottom line" focus on what types of performance metrics? economic, environmental, and social metrics revenues, profits, and customer satisfaction the three most critical measures included in the company's balanced scorecard environmental, social, and worker rights workforce diversity, environment protection, and philanthropy

economic, environmental, and social metrics

When a strong competitor concludes an industry is becoming less attractive, it may see its best option as finding a buyer, perhaps a rival, to acquire its business. invest aggressively to capture the opportunities it sees. look into acquiring weaker rivals. improve its long-term competitive position in the business. elect to simply protect its present position, investing cautiously if at all and looking for opportunities in other industries.

elect to simply protect its present position, investing cautiously if at all and looking for opportunities in other industries.

Change-resistant cultures encourage all the following undesirable and unhealthy behaviors except viewing circumstances myopically, avoiding risks, and having little appetite for being first movers or fast followers. pursuing bold actions to capture emerging opportunities and responding more slowly than is warranted to market change. preferring to follow rather than lead market change and prompting managers to lean toward safe options intended to maintain the status quo and protect their power base. taking a lax approach to both product innovation and continuous improvement in performing value chain activities. executives exuding an "ends-justify-the-means" mentality in pursuing overambitious revenue and profitability targets.

executives exuding an "ends-justify-the-means" mentality in pursuing overambitious revenue and profitability targets.

The primary reason that Facebook Inc. decided to expand outside its United States home market was to identify new and stronger resources and capabilities in its home market increase its business risk by competing with local social media providers such as WeChat. match its core competencies and capabilities with rival social media companies such as Snapchat and Instagram. achieve differentiation through economies of scale, experience, and increased purchasing power. gain access to new customers for the company's products/services.

gain access to new customers for the company's products/services.

Companies like Netflix, Amazon Prime Video, and Disney+ have increased bargaining power because they are well-informed about competing sellers' products, prices, and costs to stream videos. have the option to delay their purchases of streaming content. are large and few in number relative to the number of sellers in the video-streaming industry. have integrated backward into the business of producing film and video content for their streaming portals. are producing standardized content for their video-streaming services.

have integrated backward into the business of producing film and video content for their streaming portals.

Good competitive intelligence entails drawing the conclusion that companies seem destined to struggle because of their position. helps in determining whether a rival is gaining or losing market share. points to those things that every firm in the industry needs to attend to in order to retain customers and weather the competition. helps managers construct up-to-date strategic profiles of rivals. enables more accurate predictions about how long it will take a rival to copy most of what the strategy leader is doing.

helps managers construct up-to-date strategic profiles of rivals.

Google's vision, "to organize the world's information and make it universally accessible and useful", can be said to be a good example of how companies may communicate management's aspirations to stakeholders (customers, employees, stockholders, suppliers, etc.) and help steer the energies of company personnel in a common direction by using an easily remembered slogan. an overly generic strategic vision. how a strategic vision may be insufficiently specific to provide any guidance to the company's stakeholders. how high-sounding words can provide a company with sufficient latitude to pursue any opportunity because it is fashionable for companies to have an official vision statement. how to communicate effectively an objective that encapsulates a company's business model and aspirational strategies.

how companies may communicate management's aspirations to stakeholders (customers, employees, stockholders, suppliers, etc.) and help steer the energies of company personnel in a common direction by using an easily remembered slogan.

Eastman Kodak's and Sears' long-term industry success gave rise to high-performance cultures. insular and change-resistant cultures. bureaucratic cultures. unethical and greed-driven cultures. clashing subcultures.

insular and change-resistant cultures.

To help change a problem culture a company's strategic approach needs to be revamped to better fit the company's desired cultural traits. a bottom-up approach is needed to change the culture; having top management out in front leading the effort tends to be counterproductive. executives must know the weaknesses of their subordinates to begin the change process. it requires writing a new statement of core values, having a series of meetings with employees to explain the new cultural expectations, and having shareholders vote to ratify and adopt the new culture. it takes concerted management action over a period of time to root out unconstructive behaviors and replace them with new ways of doing things.

it takes concerted management action over a period of time to root out unconstructive behaviors and replace them with new ways of doing things.

The main disadvantage of using a franchising strategy to pursue opportunities in foreign markets is maintaining quality control. diverting company resources from the daily business. paying taxes and tariffs in order to be able to enter. bearing costs and risks of foreign establishments. giving up autonomy and profit.

maintaining quality control.

Short-termism involves managers taking advantage of their position to further their own private interest rather than those of the firm. managers developing short-term corporate social responsibility strategies and failing to develop long-term sustainability strategies. managers overly focusing on long-term performance and disregarding both the day-to-day business and short-term goals. managers focusing excessively on short-term performance objectives at the expense of long-term strategic objectives. managers assessing only the short-term costs of complying with government regulations.

managers focusing excessively on short-term performance objectives at the expense of long-term strategic objectives.

A company's corporate social responsibility strategy commonly does NOT include actions to ensure the company operates honorably and ethically. protect and sustain the environment. promote workforce diversity. enhance employee well-being and make the company a great workplace. maximize returns for shareholders.

maximize returns for shareholders.

Sustainable business practices are those that enable avoidance of tangible and intangible costs for ethical lapses. require that shareholders be prepared to accept lower returns to support environmental protection. consist of deliberate actions to lobby regulators to change laws protecting the environment. serve to meet the needs of the present without compromising the world's ability to meet future needs. have a close association with a sustainable competitive advantage.

serve to meet the needs of the present without compromising the world's ability to meet future needs.

The most widely encountered barriers entry candidates must overcome include all of the following, except restrictive government policies. the difficulties of building a network of distributors. strong buyer loyalty to existing brands. sizable economies of scale in production. small market size and special customer requirements.

small market size and special customer requirements.

Self-dealing occurs when managers refuse to accept oversight by the company's corporate board. focus excessive attention on short-term performance objectives at the expense of longer-term strategic objectives. try to overcome ethical issues by implementing a code of conduct and control the adherence. take advantage of their position to further their own private interests rather than those of the firm. entrust their employees to behave ethically and implement self-regulating processes.

take advantage of their position to further their own private interests rather than those of the firm.

You have been hired as the chief marketing officer for DoorDash. To help DoorDash execute its strategy in a truly proficient fashion and approach operating excellence, you would be charismatic, be a decisive decision-maker, and make inspiring speeches at company events. be a very personable, effective communicator, skilled in the empowerment of company personnel. be creative in establishing policies and procedures that will instill high standards of operating excellence. take the lead in the implementation/execution process and personally drive the pace of progress. gather information firsthand and demand progress from your midlevel managers.

take the lead in the implementation/execution process and personally drive the pace of progress.

Business ethics can be defined as special standards that are only applicable in business situations. principles that are popular in conducting business, but not when crafting and executing a strategy. the application of general ethical principles and standards to the various stakeholders of businesses. rules that each company makes about "what is right" and "what is wrong" for top management and the board of directors. the application of ethical principles and standards to the actions and decisions of business organizations and the conduct of their personnel.

the application of ethical principles and standards to the actions and decisions of business organizations and the conduct of their personnel.

You are considering employment opportunities after graduation. What would you look for in identifying a prospective employer's company's culture? the company's atmosphere, spirit, and character that constitute the work climate and the values, business principles, and ethical standards that company management preaches and practices the company's track record in meeting or beating its financial and strategic performance targets the intensity and makeup of the company's value chain the strategic intent and competitive strategy inherent within the company's efforts for successful strategy execution the resource strengths, core competencies, and competitive capabilities that permeate the organization

the company's atmosphere, spirit, and character that constitute the work climate and the values, business principles, and ethical standards that company management preaches and practices

You are considering starting a business to provide high-quality bookkeeping services targeted to restaurants and other food service providers in your region. Which factors would you evaluate to determine whether the food service industry offers good prospects for attractive profits? the industry's growth potential, whether competition appears destined to become stronger or weaker, how the industry's driving forces might affect overall industry profitability, the company's competitive position relative to rivals, and the company's proficiency in performing industry key success factors an assessment of which firms in the industry have the best and worst competitive strategies, whether the number of strategic groups in the industry is increasing or decreasing, and whether economies of scale and experience curve effects are a key success factor whether there are more than five key success factors, more than five barriers to entry, and more than five industry drivers whether the market leaders enjoy competitive advantages and how difficult it is to promote innovation to develop a strongly differentiated product or service for which a price premium may be charged constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group

the industry's growth potential, whether competition appears destined to become stronger or weaker, how the industry's driving forces might affect overall industry profitability, the company's competitive position relative to rivals, and the company's proficiency in performing industry key success factors

In high-performance cultures the work climate focuses on not tolerating any mistakes. there is a strong sense of involvement on the part of company personnel and an emphasis on individual initiative and effort. company personnel share a feeling of impending doom if they don't deal with whatever threats are posed by competitors. there is a clear and unyielding expectation that all company personnel will strictly follow company policies and procedures. there is willingness on the part of organization members to accept discipline and subordination.

there is a strong sense of involvement on the part of company personnel and an emphasis on individual initiative and effort.

For an enterprise to execute its strategy in truly proficient fashion and approach operating excellence midlevel executives must be charismatic, be decisive decision makers, and make inspiring speeches at company events. all employees must be very personable, effective communicators and be skilled in the empowerment of company personnel. the management must be creative in establishing policies and procedures that will instill high standards of operating excellence. top executives must take the lead in the implementation/execution process and personally drive the pace of progress. the CEO must gather information firsthand and demand progress from midlevel managers.

top executives must take the lead in the implementation/execution process and personally drive the pace of progress.