chapter 1

In crafting a company's strategy:

managers need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals.

A company's strategy consists of the action plan management is taking to:

A grow the business, stake out a market position, attract and please customers, compete Successfully, conduct operations, and

Every strategy needs:

A. a distinctive element that attracts customers and produces a competitive edge.

The competitive moves and business approaches a company's management is using to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve organizational objectives is referred

A. strategy.

Which of the following is most accurate regarding Apple's ability to maintain a sustainable competitive advantage in the desktop and laptop computer, smartphone, and entertainment technology industry?

Apple can maintain a sustainable competitive advantage to the extent that it can continue offering a differentiated product and customer experience that customers are willing to pay for.

Apple's strategy has proven successful, largely due to

Apple's ability to bring the best user experience to its customers through products and solutions with innovative design, superior ease-of-use and seamless integration across platforms.

A winning strategy must pass which three tests?

B. The Fit Test, the Competitive Advantage Test, and the Performance Test.

A company's strategy concerns:

C. management's action plan for outperforming competitors and achieving superior Profitability.

If you were asked to develop a low-cost provider strategy for a startup ridesharing business, what would you most likely not recommend?

Offer low prices on long-distance rides but hire only experienced drivers with a minimum of five years' service, pay them well above the minimum wage, and maintain peak pricing for rides during rush hour.

Patagonia, a multinational sports apparel company, is planning to launch its extreme weather gear product line in Nepal and the Kingdom of Bhutan; both are considered to be emerging markets. What would you advise Patagonia to omit from consideration in crafting a strategy to enhance future profits in these two emerging markets?

Create a sales plan that aims to enhance initial sales and market penetration with low prices based on high operational costs.

Which of the following statements about a company's strategy is true?

D. A company's strategy is typically a blend of proactive and reactive strategy elements.

The objectives of a well-crafted strategy require management to strive to:

D. develop lasting success that can support growth and secure the company's future over the long

In the course of crafting a strategy, it is common for management to:

E. All of these.

As you saw in the video, one of the measures used to demonstrate Usain Bolt's competitive advantage in running is the number of gold medals he won during the Olympics. Which of the following measures, as described in the video, similarly demonstrates McDonald's competitive advantage in the fast-food industry?

Market share

In the 'Art of War' Sun Tzu emphasized the fluid nature of competitive situations and the need for the strategist to recognize and incorporate that reality into their strategic planning. Which of the following has created the greatest uncertainty in the business environment across industries over the last 20 years?

The Internet

The group of runners that finished behind Usain Bolt was closely bunched and were said to have competitive parity. Burger King and Wendy's have a similar market share in the 5% range. Which of the following likely underlies the comparative parity of these firms?

They have similar strategic resources and strategies

Sustainable competitive advantage means a firm outperforms its peers over a sustained period of time. Such superior performance is noticed by the peer group that attempts to identify the source of the performance and copy it. This concept is called "benchmarking." Which of the following demonstrates a benchmarking process?

When Bolt was younger, he trained against other great runners, comparing his training program and performance to theirs.

Which is not a hallmark of a cleverly crafted and well-executed strategy?

a strategy that provides direction only in terms of what the company should do

A strategy to achieve and maintain sustainable competitive advantage is never associated with

actions taken by companies to gain sales and market share irrespective of product prices and costs.

Which one of the five generic competitive strategies discussed in Chapter 1 most closely approximates the competitive approach Apple Inc. is employing?

broad differentiation

A company achieves a competitive advantage when:

it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost

Unanticipated developments and fresh market conditions require a[n] _______ strategy.

emergent

Why would managers not consider drastically modifying their company's strategy?

employee demands for better working conditions

A company's business model 1

is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit.

The heart and soul of a company's strategy-making effort

is the actions and moves in the marketplace that managers take to gain a competitive advantage over rivals.

A company's strategy is shaped by

management analysis and choice in part, as well as by the necessity of adapting.

Apple's strategy of corporate responsibility is illustrated by

requiring suppliers to comply with established standards for safe working conditions, fair treatment of workers and environmentally safe manufacturing.

A company's business model:

sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable

A company's strategy

tends to be a combination of both proactive and reactive elements, with certain elements being abandoned because they have become obsolete or ineffective.

The video explains the military origins of the term strategy, but then goes on to explain how Michael Porter closed the gap between military and business thinking with his definition of business strategy. Select the option that best defines strategy in the context of business.

Generals win wars by degrading the enemy's ability and willingness to fight. Businesses win market share by degrading a competitor's ability and willingness to compete.

A company's profit formula consists of the following basic elements:

P, the price charged to customers, minus C, the company's costs.