Chapter 1 Quiz Questions

________ is the set of actions that its managers take to outperform the company's competitors and achieve superior profitability. A. A strategy B. A mission statement C. Strategic intent D. A cost-price framework E. A market vision

Answer: A. A strategy

Every strategy needs A. a distinctive element that attracts customers and produces a competitive edge. B. to include similar characteristics to rival company strategies. C. to pursue conservative growth built on historical strengths. D. to employ diverse and sundry operating practices for producing greater control over sales growth targets. E. to mimic the plans of the industry's most successful companies.

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

Managers of every company should be willing and ready to modify their strategies because A. market conditions and circumstances are changing over time or the current strategy is clearly failing. B. the task of crafting strategy is a one-time event. C. the strategic vision necessitates periodic updating. D. frequent changes in strategy make it very difficult for rivals to imitate. E. all strategies are reactive.

Answer: A. market conditions and circumstances are changing over time or the current strategy is clearly failing.

A company's strategy consists of the action plan management takes to A. stake out a unique market position and achieve superior profitability. B. compete against rivals and establish a transitory competitive advantage. C. concentrate on improving the existing product offering irrespective of the changing and turbulent markets. D. develop a more appealing business model than rivals. E. identify its strategic vision, its strategic objectives, and its strategic intent.

Answer: A. stake out a unique market position and achieve superior profitability.

A creative, distinctive strategy that delivers a sustainable competitive advantage is important because A. without a competitive advantage a company cannot become the industry leader. B. without a competitive advantage a company is likely to fall into bankruptcy. C. 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. D. a competitive advantage is what enables a company to achieve its strategic objectives. E. 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.

Answer: C. 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.

A creative and distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage A. is a reliable indicator that the company has a socially responsible business model. B. is achievable in emerging but not mature industries. C. is a company's most reliable ticket to above-average profitability. D. signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives. E. is the best indicator that the company's strategy and business model are well-matched and properly synchronized.

Answer: C. is a company's most reliable ticket to above-average profitability.

A company's strategy stands a better chance of succeeding when A. it is developed through a collaborative process involving all managers and staff from all levels of the organization. B. managers employ conservative strategic moves based on past experience and form an underlying basis of control. C. it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals. D. managers copy the strategic moves of successful companies in its industry. E. managers focus on meeting or beating shareholder expectations.

Answer: C. it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.

It is normal for a company's strategy to end up being A. a blend of offensive actions on the part of managers to improve the company's profitability and defensive moves to counteract changing market conditions. B. a combination of conservative moves to protect the company's market share and somewhat more risky initiatives to set the company's product offering apart from rivals. C. a close imitation of the strategy employed by the recognized industry leader. D. a blend of proactive actions to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions. E. more a product of clever entrepreneurship than of efforts to clearly set a company's product/service offering apart from the offerings of rivals.

Answer: D. a blend of proactive actions to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions.

Strategy, at its essence, is about A. matching rival businesses' products and quality dimensions in the marketplace. B. building profits for short-term success. C. realigning the market to provoke change in rival companies. D. developing lasting success that can support growth and secure the company's future over the long term. E. re-creating a business model with regularity.

Answer: D. developing lasting success that can support growth and secure the company's future over the long term.

In crafting a company's strategy, managers A. face the biggest challenge of how closely to replicate strategies of successful companies in the industry. B. have comparatively little freedom in choosing the "hows" of strategy. C. are wise not to decide on concrete courses of action in order to preserve maximum strategic flexibility. D. need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals. E. are well-advised to be risk-averse and develop a "conservative" strategy—"dare-to-be-different" strategies are rarely successful.

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

A company's strategy is a "work in progress" and evolves over time because of the A. A company's strategy is a "work in progress" and evolves over time because of the B. ongoing need to imitate the new strategic moves of the industry leaders. C. need to make regular adjustments in the company's strategic vision. D. ongoing need of company managers to react and respond to changing market and competitive conditions. E. frequent need to modify key elements of the company's business model.

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

What separates a powerful strategy from a run-of-the-mill or ineffective one? A. the ability of the strategy to keep the company profitable B. the proven ability of the strategy to generate maximum profits C. the speed with which it helps the company achieve its strategic vision D. management's ability to forge a series of actions, both in the marketplace and internally, that sets the company apart from rivals and produces sustainable competitive advantage E. whether it allows the company to maximize shareholder value in the shortest possible time.

Answer: D. management's ability to forge a series of actions, both in the marketplace and internally, that sets the company apart from rivals and produces sustainable competitive advantage

Winning a sustainable competitive edge over competitors does not hinge on which of the following? A. having a distinctive competitive product offering B. building competitively valuable expertise and capabilities not readily matched, and offering distinctive products C. building experience, know-how, and specialized capabilities that have been perfected over a long period of time D. having hard-to-beat capabilities and impressive product innovation E. building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost

Answer: E. building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost