ECON 136 Business Strategies Final MC

80. Which of the following is NOT an example of an external threat to a company's future profitability? a. The lack of a distinctive competence. b. New legislation that entails burdensome and costly government regulations. c. Slowdowns in market growth. d. More intense competitive pressures. e. The introduction of restrictive trade policies in countries where the company does business.

a. The lack of a distinctive competence.

143. Which of the following is NOT an accurate statement as concerns competing in the markets of foreign countries? a. A multi-country strategy is generally superior to a global strategy. b. There are country-to-country differences in consumer buying habits and buyer tastes and preferences. c. A company must contend with fluctuating exchange rates and country-to-country variations in host government restrictions and requirements. d. Product designs suitable for one country are often inappropriate in another. e. Market growth rates vary from country to country.

a. A multi-country strategy is generally superior to a global strategy.

177. What is the name of the process for developing new businesses as an outgrowth of a company's established business operations? a. Corporate venturing, corporate entrepreneurship, or intrapreneurship. b. Value chain integration. c. Resource capability process. d. Diversification activity capabilities. e. All of these.

a. Corporate venturing, corporate entrepreneurship, or intrapreneurship.

20. Which of the following are integral parts of the managerial process of crafting and executing strategy? a. Developing a strategic vision, setting objectives, and crafting a strategy. b. Developing a proven business model, deciding on the company's strategic intent, and crafting a strategy c. Setting objectives, crafting a strategy, implementing and executing the chosen strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage. d. Coming up with a statement of the company's mission and purpose, setting objectives, choosing what business approaches to employ, selecting a business model, and monitoring developments. e. Deciding on the company's strategic intent, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ.

a. Developing a strategic vision, setting objectives, and crafting a strategy.

171. What is it called when a company sells its goods in foreign markets at prices that are below the prices at which it normally sells in its home market or well below its full costs per unit? a. Dumping practices. b. Price-clearing system. c. Clearance sale. d. Discounting practices. e. Competitive advantage.

a. Dumping practices.

123. Which of the following rivals make the best targets for an offensive attack? a. Firms with weaknesses in areas where the challenger is strong. b. Companies that are financially strong and possess favorable competitive market positioning. c. Large national firms with vast capabilities and intermittent trivial resource deficiencies. d. Strong and financially secure market leaders. e. Small local and regional firms with unrestrained capabilities.

a. Firms with weaknesses in areas where the challenger is strong.

45. The most powerful and widely used tool for diagnosing the principle competitive pressures in a market is the: a. Five Forces Model. b. SWOT. c. Competition Intensity Model. d. Dynamic Simulation Model. e. Competitor Profiling.

a. Five Forces Model.

94. Which one of the following is an accurate interpretation of the scores that result from doing a competitive strength assessment? a. High scores signal a strong competitive position and possession of a competitive advantage over companies with lower scores. b. High scores indicate that a company is a power-user of best practices, while low scores signal minimal or ineffective adoption of best practices. c. The company with the lowest score has the lowest-cost value chain. d. The company with the lowest score has the strongest net competitive advantage over its rivals. e. High scores indicate which rivals are most vulnerable to competitive attack.

a. High scores signal a strong competitive position and possession of a competitive advantage over companies with lower scores.

29. Which of the following is the best example of a well-stated financial objective? a. Increase earnings per share by 15 percent annually. b. Gradually boost market share from 10 percent to 15 percent over the next several years. c. Achieve lower costs than any other industry competitor. d. Boost revenues by a percentage margin greater than the industry average. e. Maximize total company profits and return on investment.

a. Increase earnings per share by 15 percent annually.

73. Which of the following most accurately reflect a company's resource strengths? a. Its human, physical and/or organization assets; its skills and competitive capabilities; and its achievements or attributes that enhance the company's ability to compete effectively. b. The sizes of its unit sales, revenues, and market share vis-à-vis those of key rivals. c. The sizes of its profit margins and return on investment vis-à-vis those of key rivals. d. Whether it has more primary activities in its value chain than close rivals and a better overall value chain than these rivals. e. Whether it has more core competencies than close rivals.

a. Its human, physical and/or organization assets; its skills and competitive capabilities; and its achievements or attributes that enhance the company's ability to compete effectively.

60. What is the best technique for revealing the different market or competitive position that rival firms occupy in the industry? a. Strategic group mapping. b. Global industry change. c. Dynamic mapping analysis. d. Distribution analysis. e. None of these.

a. Strategic group mapping.

66. Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity? a. The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average. b. 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. c. Whether there are more than five key success factors and more than five barriers to entry. d. Constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group. e. Whether the market leaders enjoy competitive advantages and how hard it is to develop a strongly differentiated product.

a. The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average.

47. Which of the following is NOT one of the five typical sources of competitive pressures? a. The power and influence of industry driving forces. b. The bargaining power of suppliers and seller-supplier collaboration. c. The threat of new entrants into the market. d. The attempts of companies in other industries to win customers over to their own substitute products. e. The market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.

a. The power and influence of industry driving forces.

142. Why do companies decide to enter a market? a. To capture economies of scale in product development, manufacturing, or marketing. b. To raise input costs through greater pooled purchasing power. c. To increase the rate at which they disperse experience and move up the learning curve. d. To concentrate risk within a broader base of countries, especially when sales are down in one area and the company can undermine sales elsewhere. e. To exploit the natural resources found within its home market.

a. To capture economies of scale in product development, manufacturing, or marketing.

26. A company's mission statement typically addresses which of the following questions? a. Who are we and what do we do? b. What objectives and level of performance do we want to achieve? c. Where are we going and what should our strategy be? d. What approach should we take to achieve sustainable competitive advantage? e. What business model should we employ to achieve our objectives and our vision?

a. Who are we and what do we do?

178. A joint venture is an attractive way for a company to enter a new industry when: a. a firm is missing some essential skills, capabilities, or resources and needs a partner to supply the missing expertise and competencies or fill the resource gaps. b. it needs access to economies of scope and good financial fits in order to be cost-competitive. c. it is uneconomical for the firm to achieve economies of scope on its own initiative. d. the firm has no prior experience with diversification. e. it has not built up a hoard of cash with which to finance a diversification effort.

a. a firm is missing some essential skills, capabilities, or resources and needs a partner to supply the missing expertise and competencies or fill the resource gaps.

163. Transferring core competencies and resource strengths from one country market to another is a. a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage. b. best accomplished with a multidomestic strategy as opposed to a global strategy. c. feasible only with a global strategy; it can't be done with a multidomestic strategy. d. unlikely to result in a competitive advantage. e. nearly always the easiest and most sure-fire way to build competitive advantage in trying to compete successfully in foreign markets.

a. a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage.

116. Best-cost provider strategies are: a. a hybrid of low-cost provider and differentiation strategies that aim at providing desired quality/features/performance/service attributes while beating rivals on price. b. rewarded by providing buyers with the best attributes at the best cost. c. those strategy elements related to the low-cost provider in the largest and fastest growing (or best) market segment. d. those that stake out a middle ground between a focused advantage and low-cost advantage and appeal to broad market segments and narrowly defined customer propositions. e. All of these.

a. a hybrid of low-cost provider and differentiation strategies that aim at providing desired quality/features/performance/service attributes while beating rivals on price.

13. Changing circumstances and ongoing managerial efforts to improve the strategy: a. account for why a company's strategy evolves over time. b. explain why a company's strategic vision undergoes almost constant change. c. make it very difficult for a company to have concrete strategic objectives. d. make it very hard to know what a company's strategy really is. e. All of these.

a. account for why a company's strategy evolves over time.

131. A vertical integration strategy can expand the firm's range of activities: a. backward into sources of supply and/or forward toward end users. b. backward into other industry business-lines and/or forward to suppliers of raw materials. c. to enable the supply chain the opportunity for expansion. d. to complement the industry's horizontal value chain line of profitability. e. to establish full integration by participating in a tapered integration (without the outsourced and in-house activities).

a. backward into sources of supply and/or forward toward end users.

108. Broad differentiation strategies generally work best in market circumstances where: a. buyer needs and uses of the product are diverse and they are not fully satisfied by a standardized product. b. most buyers have similar needs and use the product in the same ways. c. the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart. d. buyers are price sensitive and buying switching costs are quite low. e. the five competitive forces are strong.

a. buyer needs and uses of the product are diverse and they are not fully satisfied by a standardized product.

117. The objective of a best-cost provider strategy is to: a. deliver superior value to value-conscious buyers at a comparatively lower price than rivals. b. offer buyers the industry's best-performing product at the best cost and best (lowest) price in the industry. c. attract buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. d. out-compete rivals using low-cost provider strategies. e. translate its best-cost status into achieving the highest profit margins of any firm in the industry.

a. deliver superior value to value-conscious buyers at a comparatively lower price than rivals.

69. A useful way to identify a company's resources is to view them as: a. divided into two main categories, tangible and intangible. b. every productive input or competitive asset except human assets and intellectual capital, which are considered capabilities or competencies. c. physical resources, such as the company's brand, image, and reputation assets. d. an inventory or a collection of the firm's strengths, weaknesses, opportunities, and threats. e. All of these.

a. divided into two main categories, tangible and intangible.

119. The target market of a best-cost provider is: a. value-conscious buyers. b. brand-conscious buyers. c. price-sensitive buyers. d. middle-income buyers. e. young adults (in the 18-35 age group).

a. value-conscious buyers.

33. The task of stitching together a strategy: a. entails addressing a series of how's: how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, and how to achieve strategic and financial objectives. b. is primarily an exercise in deciding which of several freshly emerging market opportunities to pursue. c. is mainly an exercise that should be dictated by what is comfortable to management from a risk perspective and what is acceptable in terms of capital requirements. d. requires trying to copy the strategies of industry leaders as closely as possible. e. is mainly an exercise in good planning.

a. entails addressing a series of how's: how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, and how to achieve strategic and financial objectives.

129. Mergers and acquisitions are often driven by such strategic objectives as: a. expanding a company's geographic coverage or extending its business into new product categories. b. reducing the number of industry key success factors. c. reducing the number of strategic groups in the industry. d. facilitating a company's shift from a low-cost leadership strategy to a focused low-cost strategy. e. lengthening a company's value chain and thereby putting it in a better position to deliver superior value to buyers.

a. expanding a company's geographic coverage or extending its business into new product categories.

130. Vertical integration strategies: a. extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain. b. are one of the best strategic options for helping companies win the race for global market leadership. c. offer good potential to expand a company's lineup of products and services. d. are particularly effective in boosting a company's ability to expand into additional geographic markets, particularly the markets of foreign countries. e. is a good strategy option for helping a company revamp its value chain and bypass low value-added activities.

a. extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain.

133. The strategic impetus for forward vertical integration is to: a. gain better access to end users and better market visibility. b. achieve the same scale economies as wholesale distributors and/or retail dealers. c. control price at the retail level. d. bypass distributors and dealers and sell direct to consumers at the company's website. e. build a core competence in mass merchandising.

a. gain better access to end users and better market visibility.

3. 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 achieve performance objectives. b. compete against rivals and establish a sustainable competitive advantage. c. make its product offering more distinctive and appealing to buyers. d. develop a more appealing business model than rivals. e. identify its strategic vision, its strategic objectives, and its strategic intent.

a. grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve performance objectives.

150. The advantages of using an acquisition strategy to pursue opportunities in foreign markets include: a. having a high level of control and speed as an entry strategy to overcome trade barriers. b. allowing a company to achieve scalable economies. c. eliminating the costs and risks associated with establishing a foreign business location. d. being able to achieve variable product quality and competitive product performance. e. being able to export goods at higher costs than rivals in those locations.

a. having a high level of control and speed as an entry strategy to overcome trade barriers.

53. To determine how strong the threat of substitutes will be entails: a. identifying the relative price/performance relationship of the substitutes, the switching costs and the overall buyer demand for the substitute. b. identifying the attractiveness of other industries. c. measuring Coke as a substitute for Pepsi and applying dynamic simulation modeling techniques. d. adopting a substitute product concentration factor to the buyer volume. e. All of these.

a. identifying the relative price/performance relationship of the substitutes, the switching costs and the overall buyer demand for the substitute.

105. Brands create customer loyalty, which in turn: a. increases the perceived cost of switching to another product. b. strengthens the product's quality. c. validates the motivation for alternate products. d. provides monetary incentive for using the product. e. All of these.

a. increases the perceived cost of switching to another product.

50. Potential entrants are more likely to be deterred from actually entering an industry when: a. incumbent firms are willing and able to be aggressive in defending their market positions against entry. b. incumbent firms are complacent. c. buyers are not particularly price sensitive and the industry already contains a dozen or more rivals. d. the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage. e. buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

a. incumbent firms are willing and able to be aggressive in defending their market positions against entry.

25. Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of: a. inspiring company personnel to unite behind managerial efforts to get the company moving in the intended direction. b. helping company personnel understand why "making a profit" is so important. c. making it easier for top executives to set stretch objectives. d. helping lower-level managers and employees better understand the company's business model. e. All of these.

a. inspiring company personnel to unite behind managerial efforts to get the company moving in the intended direction.

71. Organizational capabilities are virtually always: a. knowledge-based, residing in people and in the company's intellectual capital, or in organizational processes and systems, which embody tacit knowledge. b. more complex than resources and are exercised only through key personnel. c. require constant evaluation to ensure cooperative support from management. d. are easier and less challenging to categorize than resources because there are fewer to be concerned about. e. reflective of the industry's driving forces.

a. knowledge-based, residing in people and in the company's intellectual capital, or in organizational processes and systems, which embody tacit knowledge.

79. The market opportunities most relevant to a particular company are those that: a. offer the best prospects for growth and profitability. b. provide a strong defense against threats to the company's profitability. c. embrace the most potential for product innovation. d. provide avenues for taking market share away from close rivals. e. hold the most potential to reduce costs.

a. offer the best prospects for growth and profitability.

99. The major avenues for achieving a cost advantage over rivals include: a. performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities. b. having a management team that is highly skilled in cutting costs. c. being a first-mover in adopting the latest state-of-the-art technologies, especially those relating to low-cost manufacture. d. outsourcing high-cost activities to cost-efficient vendors. e. paying lower wages and salaries than rivals.

a. performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities.

146. The difference between political risks and economic risks is that: a. political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies. b. political risks stem from stability in foreign business, while economic risks stem from an excess of property right protections. c. political rights stem from hostility to foreign business, while economic risks stem from the instability of the monetary system. d. political risks stem from risks due to exchange rate fluctuations, while economic risks stem from hostility to foreign business. e. political risks stem from the stability of a country's monetary system, while economic risks stem from instability in national business.

a. political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies.

176. While acquisitions offer an enticing means for entering a new business, many fail to deliver on their promise, as they: a. require successful integration of the culture, systems, and structure of the firm into the acquiring firm, which is a costly and time-consuming process. b. require an in-depth understanding of the firm so as to develop potential strategic responses to the target market. c. indicate that the premium paid for the company was far too high for what assets the acquiring firm purchased, and therefore failed the cost-of-entry test. d. require managerial attention at the highest level and this cannot always be provided. e. All of these.

a. require successful integration of the culture, systems, and structure of the firm into the acquiring firm, which is a costly and time-consuming process.

102. A company attempting to be successful with a broad differentiation strategy has to: differentiation strategy has to: a. study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for. b. incorporate more differentiating features into its product/service than rivals. c. concentrate its differentiating efforts on marketing and advertising (where almost all differentiating features are created). d. have a widely known and highly respected brand name image. e. provide a top-of-the-line product and sell it at premium prices.

a. study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for.

132. When firms are involved in a mix of in-house and outsourced activity in any given stage of the vertical chain, it is called: a. tapered integration. b. partial integration. c. full integration. d. forward integration. e. backward integration.

a. tapered integration.

175. An acquisition premium is the amount by which the price offered for an existing business exceeds: a. the pre-acquisition market value of the target company. b. the fair market value of similar companies in the same geographic locale. c. the comparable value of similar companies within the same market. d. the amount paid as a down payment to be held in escrow until closing. e. the difference between the amount that was offered and the amount that is escrowed.

a. the pre-acquisition market value of the target company.

115. The chief difference between a broad differentiation strategy and a focused differentiation is: a. the size of the buyer group that a company is trying to appeal to. b. the degree of bargaining power that buyers have. c. whether the product is strongly differentiated or weakly differentiated from rivals. d. the type of value chain being used to achieve a differentiation-based competitive advantage. e. the number of upscale attributes incorporated into the product offering.

a. the size of the buyer group that a company is trying to appeal to.

14. Strategy is about competing differently than rivals, thus strategy success is about: a. the sources of sustained advantages and superior profitability. b. those emergent, unplanned, reactive, and adaptive strategies that are more appropriate than deliberate or intended ones that drive the realized strategy. c. matching internal resources and capabilities to the industry environment. d. keeping the firm current with the rapid pace of change in the industry. e. All of these.

a. the sources of sustained advantages and superior profitability.

179. The essential requirement for different businesses to be "related" is that: a. their value chains exhibit competitively valuable cross-business relationships. b. the products of the different businesses are bought by many of the same types of buyers. c. the products of the different businesses are sold in the same types of retail stores. d. the businesses have several key suppliers in common. e. the production methods they employ both entail economies of scale.

a. their value chains exhibit competitively valuable cross-business relationships.

12. One of the frequently used successful and dependable strategic approaches is: a. to come up with a distinctive element that builds strong customer loyalty and yields a winning competitive edge. b. to aggressively pursue all of the growth opportunities the company can identify. c. to develop a product/service with more innovative performance features than what rivals are offering and to provide customers with better after-the-sale service. d. to come up with a business model that enables a company to earn bigger profits per unit sold than rivals. e. to charge a lower price than rivals and thereby win sales and market share away from rivals.

a. to come up with a distinctive element that builds strong customer loyalty and yields a winning competitive edge.

48. Rivalry increases: a. when buyer demand is growing fast or increasing. b. as it becomes more costly for buyers to switch brands. c. as the products of rival sellers becomes more strongly differentiated. d. when there is excess supply of unused production capacity, especially if high fixed costs exist. e. All of these.

a. when buyer demand is growing fast or increasing.

151. A Greenfield venture in a foreign market is one: a. where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up. b. where foreign facilities and marketing strategies are shared with local businesses. c. where the company learns through training by the foreign entity on how to compete. d. hat supports exports into a foreign market by marketing indirectly thru local rivals. e. that offers lower risk and a faster path to financial returns.

a. where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up.

95. Calculating competitive strength ratings for a company and comparing them against strength ratings for its key competitors helps indicate: a. which weaknesses and vulnerabilities of competitors the company might be able to attack successfully. b. which competitors are in profitable strategic groups and which competitors are in unprofitable strategic groups. c. which competitors are employing offensive strategies and which competitors are employing defensive strategies. d. which competitors are likely to make money and which are likely to lose money in the years ahead. e. what the industry's key success factors are.

a. which weaknesses and vulnerabilities of competitors the company might be able to attack successfully.

16. A company's business model: a. zeros in on the customer value proposition and its related profit formula. b. is management's storyline for how the strategy will result in achieving the targeted strategic objectives. c. details the ethical and socially responsible nature of the company's strategy. d. explains how it intends to achieve high profit margins. e. sets forth the actions and approaches that it will employ to achieve market leadership.

a. zeros in on the customer value proposition and its related profit formula.

93. In a weighted competitive strength assessment, the sum of the weights should add up to: a. 100% b. 1.0 c. 10. d. 100. e. None of these.

b. 1.0

52. In which of the following instances are industry members NOT subject to stronger competitive pressures from substitute products? a. The costs to buyers of switching over to the substitutes are low. b. Buyers are dubious about using substitutes. c. The quality and performance of the substitutes is well-matched to what buyers need to meet their requirements. d. Buyer brand loyalty is weak. e. Substitutes are readily available at competitive prices.

b. Buyers are dubious about using substitutes.

57. Which of the following is NOT a factor that causes buyer bargaining power to be stronger? a. Some buyers are a threat to integrate backward into the business of sellers and become an important competitor. b. Buyers are small and numerous relative to sellers. c. Buyers have considerable discretion over whether and when they purchase the product. d. Buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs. e. The costs incurred by buyers in switching to competing brands or to substitute products are relatively low.

b. Buyers are small and numerous relative to sellers.

65. Which of the following can aid industries in identifying key success factors? a. Global distribution capabilities. b. Crucial product attributes and service characteristics. c. Low distribution costs. d. Accurate filling of buyer orders. e. Short delivery time capability.

b. Crucial product attributes and service characteristics.

82. In doing SWOT analysis and trying to identify a company's market opportunities, which of the following is NOT an example of a potential market opportunity that a company may have? a. Serving additional customer groups or market segments. b. Growing buyer preferences for substitutes for the industry's product. c. Acquiring rival firms or companies with attractive technological expertise or capabilities. d. Expanding into new geographic markets. e. Openings to win market share away from rivals.

b. Growing buyer preferences for substitutes for the industry's product.

1. Which of the following is NOT one of the managerial considerations in determining how to compete successfully? a. How can a company attract, keep, and please customers? b. How can the company modify its entire product line to emphasize their internal service attributes? c. How should the company respond to changing economic and market conditions? d. How should the company be competitive against rivals? e. How should the company position itself in the marketplace?

b. How can the company modify its entire product line to emphasize their internal service attributes?

5. Which of the following is NOT something a company's strategy is concerned with? a. Management's choices about how to attract and please customers. b. Management's choices about how quickly and closely to copy the strategies being used by successful rival companies. c. Management's choices about how to grow the business. d. Management's choices about how to compete successfully. e. Management's action plan for conducting operations and improving the company's financial and market performance.

b. Management's choices about how quickly and closely to copy the strategies being used by successful rival companies.

162. Which of the following is the most unlikely element of a "think global, act global" approach to crafting a global strategy? a. Minimal responsiveness to buyer tastes, cultural traditions, and market conditions in each country market. b. Scattering plants across many countries, with each plant producing product versions for local area markets. c. Utilizing the same competitive capabilities, distribution channels, and marketing approaches worldwide. d. Requiring local managers in host countries to stick close to the chosen global strategy. e. Selling much the same products under the same brand names worldwide.

b. Scattering plants across many countries, with each plant producing product versions for local area markets.

122. Which one of the following is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies? a. Whether to focus on building competitive advantages. b. Whether to employ the element of surprise as opposed to doing what rivals expect and are prepared for. c. Whether to employ a market share leadership strategy. d. Whether to display a strong bias for swift, decisive, and overwhelming actions to overpower. e. Whether to create and deploy company resources to cause rivals to defend themselves.

b. Whether to employ the element of surprise as opposed to doing what rivals expect and are prepared for.

128. The difference between a merger and an acquisition is that: a. a merger involves one company purchasing the assets of another company with cash, whereas an acquisition involves a company acquiring another company by buying all of the shares of its common stock. b. a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired). c. in a merger, the companies retain their original names, whereas in an acquisition the name of the company being acquired is changed to be the name of the acquiring company. d. a merger is a combination of three or more companies, whereas an acquisition is a pooling of interests of just two companies. e. a merger involves two or more companies deciding to adopt the same strategy, whereas an acquisition involves one company taking over the strategy-making function of another company.

b. a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired).

136. Strategic alliances: a. are the cheapest means of developing new technologies and getting new products to market quickly. b. are collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective. c. are a proven means of reducing the costs of performing value chain activities. d. are best used to insulate a company from the impact of the five competitive forces. e. help insulate a firm from the adverse impacts of industry driving forces.

b. are collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective.

154. Multidomestic competition refers to situations where: a. no domestic companies have very large market shares and each national market has many competitors. b. competition in one national market is independent of competition in other national markets, and as a consequence, there is—strictly speaking—no "international or world market." c. domestic rivals pursue focused or market niche strategies and do not compete internationally. d. domestic companies have a competitive disadvantage in competing with foreign rivals that operate in many different countries. e. most competitors operate in more than 2 country markets but rarely in more than 20.

b. competition in one national market is independent of competition in other national markets, and as a consequence, there is—strictly speaking—no "international or world market."

92. Understanding where the company is competitive requires: a. determining whether a company has a cost-effective value chain. b. developing quantitative strength ratings for the company and key rivals on each industry key success factor and each pivotal resource, capability, and value chain activity. c. identifying a company's core competencies and distinctive competencies (if any). d. analyzing whether a company is well positioned to gain market share and be the industry's profit leader. e. developing quantitative measures of a company's chances for future profitability.

b. developing quantitative strength ratings for the company and key rivals on each industry key success factor and each pivotal resource, capability, and value chain activity.

86. The primary purpose of value chain analysis is to: a. segregate the company's operations into different types of functions. b. facilitate a comparison activity-by-activity of how effectively and efficiently a company delivers value to its customers, relative to its competitors. c. eliminate unproductive and obsolete functionality in the firm's operating strategy. d. compare cost structure efficiency with the operating effectiveness of rivals to determine the strategy content of rival firms. e. All of these.

b. facilitate a comparison activity-by-activity of how effectively and efficiently a company delivers value to its customers, relative to its competitors.

36. The task of top executives when the company faces disruptive changes in its environment is to not only raise questions about the appropriateness of its direction and strategy but also to: a. know when to continue with the present corporate culture and when to shift to a different and better corporate culture. b. ferret out the causes and decide when adjustments are needed and what adjustments are needed for improved performance and operating excellence. c. figure out whether to arrive at decisions quickly or slowly in choosing among the various alternative adjustments. d. decide whether to try to fix the problems of poor strategy execution or simply shift to a strategy that is easier to execute correctly. e. decide how to identify the problems that need fixing.

b. ferret out the causes and decide when adjustments are needed and what adjustments are needed for improved performance and operating excellence.

109. A broad differentiation strategy generally produces the best results in situations where: a. buyer brand loyalty is low. b. few rival firms are following a similar differentiation approach. c. new and improved products are introduced only infrequently. d. most rivals are pursuing a differentiation strategy and are seeking to differentiate their products on most of the same features and attributes. e. price competition is vigorous.

b. few rival firms are following a similar differentiation approach.

120. A company's biggest vulnerability in employing a best-cost provider strategy is: a. relying too heavily on outsourcing. b. getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies. c. getting trapped in a price war with low-cost leaders. d. being timid in cutting its prices far enough below high-end differentiators to win away many of their customers. e. not having a sustainable distinctive competence in cost reduction.

b. getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.

96. Identifying the strategic issues and problems that merit front-burner managerial attention: a. is accomplished solely by analyzing the company's internal working environment. b. helps set management's agenda for taking actions to improve the company's performance and business outlook. c. is done solely by evaluating the company's own internal situation—its resources and competitive position— to help come up with a "worry list" of "how to...," "whether to...," and "what to do about..." d. is done solely as a basis for drawing conclusions about whether to stick with a company's present strategy or to modify it. e. None of these.

b. helps set management's agenda for taking actions to improve the company's performance and business outlook.

135. The big risk of employing an outsourcing strategy is: a. causing the company to become partially integrated instead of being fully integrated. b. hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success. c. hurting a company's R&D capability. d. putting the company in the position of being a late mover instead of an early mover. e. increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain.

b. hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.

144. The diamond framework can be used to reveal the answers to all of the following that are important for competing on an international basis EXCEPT: a. where foreign entrants into an industry are most likely to come from. b. how to formulate an exit strategy to push foreign competitors out of the market on the basis of competing strengths. c. which countries' foreign rivals are likely to be the weakest. d. how managers can decide which foreign markets to enter first. e. where to locate different value chain activities so they are the most beneficial.

b. how to formulate an exit strategy to push foreign competitors out of the market on the basis of competing strengths.

90. The most difficult part of benchmarking is: a. the decision of whether to do it at all. b. how to gain access to information regarding rivals' practices and costs. c. when to initiate the process. d. what information to utilize in the analysis process. e. when to stop the process and move forward with strategy.

b. how to gain access to information regarding rivals' practices and costs.

15. A company's business model: a. concerns the actions and business approaches that will be used to grow the business, conduct operations, please customers, and compete successfully. b. is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit. c. concerns what combination of moves in the marketplace it plans to make to outcompete rivals. d. deals with how it can simultaneously maximize profits and operate in a socially responsible manner that keeps its prices as low as possible. e. concerns how management plans to pursue strategic objectives, given the larger imperative of meeting or beating its financial performance targets.

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

64. Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because: a. it identifies who the industry's current market share leaders are. b. it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals. c. good scouting reports help identify which rival is in which strategic group. d. it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes. e. it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

b. it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals.

54. The lower the price of product substitutes, the higher their quality and performance and the lower the user's switching costs, the a. harder it is for the sellers of attractive substitutes to lure buyers to their offering. b. more intense the competitive pressures posed by substitute products. c. less intense the competitive pressures posed by substitute products. d. greater rival sellers experience strong bargaining power from both suppliers and influential customers. e. less rival sellers experience weak bargaining power from both suppliers and influential customers.

b. more intense the competitive pressures posed by substitute products.

34. Strategy-making is: a. primarily the responsibility of key executives rather than a task for a company's entire management team. b. more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives. c. first and foremost the function and responsibility of a company's strategic planning staff. d. first and foremost the function and responsibility of a company's board of directors. e. first and foremost the function of a company's chief executive officer—who formulates strategic initiatives and submits them to the board of directors for approval.

b. more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives.

32. Company objectives: a. are needed only in those areas directly related to a company's short-term and long-term profitability. b. need to be broken down into performance targets for each of its organizational levels—for separate businesses, product lines, functional departments, and individual work units. c. play the important role of establishing the direction in which it needs to be headed. d. are important because they help guide managers in deciding what the company's strategic intent should be. e. should be set in a manner that does not conflict with the performance targets of lower-level organizational units.

b. need to be broken down into performance targets for each of its organizational levels—for separate businesses, product lines, functional departments, and individual work units.

49. Factors that cause the rivalry among competing sellers to be weaker include: a. low buyer switching costs and rival sellers that are relatively equal in size and capability. b. rapid growth in buyer demand and high buyer switching costs. c. few industry rivals, causing any one company's actions to be easily anticipated and countered by its rivals. d. low barriers to entry and weakly differentiated products among rival sellers. e. slow growth in buyer demand and strongly differentiated products.

b. rapid growth in buyer demand and high buyer switching costs.

24. An engaging and convincing strategic vision: a. ought to be done in writing rather than orally so as to leave no room for company personnel to misinterpret what the strategic vision really is. b. should be done in language that inspires and motivates company personnel to unite behind executive efforts to get the company moving in the intended direction. c. tends to be more effective when top management avoids trying to capture the essence of the strategic vision in a catchy slogan. d. is most efficiently and effectively done by posting the strategic vision prominently on the company's website and encouraging employees to read it. e. should be explained after the company's strategic intent, strategy, and business model has been conveyed to company personnel.

b. should be done in language that inspires and motivates company personnel to unite behind executive efforts to get the company moving in the intended direction.

68. A company's resources and capabilities represent: a. the firm's net working capital and related determinants for measuring operating performance and capabilities. b. the firm's competitive assets, which are considered big determinants of its competitiveness and ability to succeed in the marketplace. c. whether the firm has the industry's most efficient value chain. d. management's source of funding of new strategic initiatives. e. All of these.

b. the firm's competitive assets, which are considered big determinants of its competitiveness and ability to succeed in the marketplace.

156. A global strategy allows for: a. the leading companies to compete for the biggest share of the world market, but only occasionally compete head to head in different countries. b. the markets in various countries to be part of the world market and competitive conditions across country markets to be strongly linked. c. a company's overall market strength to be the sum of its market shares in each country market where it has a presence. d. the industry leaders to be foreign companies, while domestic companies are relegated to runner-up status. e. a firm's overall competitive advantage to be determined by the size of the competitive advantage it has in each of its profit sanctuaries.

b. the markets in various countries to be part of the world market and competitive conditions across country markets to be strongly linked.

84. A company's value chain identifies: a. the steps it goes through to convert its net income into value for shareholders. b. the primary activities and related support activities it performs in creating customer value. c. the series of steps it takes to get a product from the raw materials stage into the hands of end users. d. the activities it performs in transforming its competencies into distinctive competencies. e. the competencies and competitive capabilities that underpin its efforts to create value for customers and shareholders.

b. the primary activities and related support activities it performs in creating customer value.

110. What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is: a. the extra attention paid to top-notch product performance and product quality. b. their concentrated attention on serving the needs of buyers in a narrow piece of the overall market. c. greater opportunity for competitive advantage. d. their suitability for market situations where most industry rivals have weakly differentiated products. e. their objective of delivering more value for the money.

b. their concentrated attention on serving the needs of buyers in a narrow piece of the overall market.

75. A company's strengths are important because: a. they pave the way for establishing a low-cost advantage over rivals. b. they represent the quality of its competitive assets that enhance its competitiveness in the marketplace. c. they provide extra muscle in helping lengthen the company's value chain. d. they give it competitive protection against the industry's driving forces. e. they provide extra organizational muscle in turning a core competence into a key success factor.

b. they represent the quality of its competitive assets that enhance its competitiveness in the marketplace.

121. The marketing emphasis of a company pursuing a broad differentiation strategy usually is to: a. under price rival brands with comparable features. b. tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features. c. out-advertise rivals and make frequent use of discount coupons. d. emphasize selling directly to end-users and promoting personalized customer service. e. communicate the product's ability to serve the customer's every need.

b. tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features.

97. While there are many routes to competitive advantage, the two biggest factors that distinguish one competitive strategy from another involves: a. whether a company can build a brand name and an image that buyers trust. b. whether a company's target market is broad or narrow and whether the company is pursuing a competitive advantage linked to low costs or differentiation. c. whether a company can achieve lower costs than rivals and whether the company is pursuing the industry's sales and market share leader role. d. finding effective and efficient ways to strengthen the company's competitive assets and to reduce its competitive liabilities. e. getting in the best strategic group and establishing a dominating role.

b. whether a company's target market is broad or narrow and whether the company is pursuing a competitive advantage linked to low costs or differentiation.

83. One of the most telling signs of whether a company's market position is strong or precarious is: a. whether its product is strongly or weakly differentiated from rivals. b. whether its prices and costs are competitive with those of key rivals. c. whether it has a lower stock price than key rivals. d. the opinions of buyers regarding which seller has the best product quality and customer service. e. whether it is in a bigger or smaller strategic group than its closest rivals.

b. whether its prices and costs are competitive with those of key rivals.

6. Which of the following is NOT a primary focus of a company's strategy? a. How to attract and please customers. b. How best to respond to changing economic and market conditions. c. How to achieve above-average gains in the company's stock price and thereby meet or beat shareholder expectations. d. How to compete successfully. e. How to grow the business.

c. How to achieve above-average gains in the company's stock price and thereby meet or beat shareholder expectations.

91. Which of the following is NOT a good option for trying to remedy high internal costs vis-à-vis rivals' firms? a. Finding ways to detour around activities or items where costs are high. b. Redesigning the product or some of its components to permit more economical manufacture or assembly. c. Implementing aggressive strategic resource mapping to permit across-the-board cost reduction. d. Outsourcing high-cost activities to vendors or contractors who can perform them more economically. e. Relocating high-cost activities (like manufacturing) to geographic areas (like China or Latin America or Eastern Europe) where they can be performed more cheaply.

c. Implementing aggressive strategic resource mapping to permit across-the-board cost reduction.

100. Which of the following is NOT one of the ways that a company can achieve a cost advantage by revamping its value chain? a. Bypassing the activities and costs of distributors and dealers by selling direct to customers. b. Replacing certain value chain activities with faster and cheaper online systems. c. Increasing production capacity and then striving hard to operate at full capacity. d. Relocating facilities so as to curb the cost for shipping and handling activities. e. Streamlining operations by eliminating low value-added or unnecessary work steps and activities.

c. Increasing production capacity and then striving hard to operate at full capacity.

140. Which of the following is NOT one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits? a. Picking a good partner. b. Recognizing that the alliance must benefit both sides. c. Minimizing the amount of resources that the partners commit to the alliance. d. Ensuring that both parties live up to their commitments. e. Structuring the decision-making process so actions can be taken swiftly when needed.

c. Minimizing the amount of resources that the partners commit to the alliance.

11. Which of the following is NOT a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? a. Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage. b. Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority, or unusually good value for the money. c. Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins. d. Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of satisfying the needs and tastes of buyers comprising the niche. e. Developing an advantage based on offering more value for the money.

c. Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins.

2. A company's strategy concerns: a. the market focus and plans for offering a more appealing product than rivals. b. how it plans to make money in its chosen business. c. management's action plan for outperforming competitors and achieving superior profitability. d. the long-term direction that management believes the company should pursue. e. whether it is employing an aggressive offense to gain market share or a conservative defense to protect its market position.

c. management's action plan for outperforming competitors and achieving superior profitability.

63. Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry? a. The variables chosen as axes for the map should indicate important differences among rival approaches. b. The variables chosen as axes for the map don't have to be either quantitative or continuous. They can be discrete variables. c. The variables chosen as axes for the map should be highly correlated. d. Several maps should be drawn if more than one pair of variables give different exposures to the competitive positioning relationships present in the industry structure. e. The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group.

c. The variables chosen as axes for the map should be highly correlated.

125. What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack? a. To alleviate their fears by committing to reduce the costs of value chain activities. b. To cause the challenger to begin the attack instead of waiting. c. To dissuade challengers from attacking or diverting them into using less threatening options. d. To create collaborative relationships with challengers. e. To insulate other firms from adverse impacts resulting from the challenge.

c. To dissuade challengers from attacking or diverting them into using less threatening options.

138. Which one of the following is NOT a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products? a. To improve access to new markets. b. To expedite the development of promising new technologies or products. c. To enable greater opportunities for employee advancement. d. To improve supply chain efficiency. e. To overcome disadvantages of small production volumes that limit scale economies and low production costs.

c. To enable greater opportunities for employee advancement.

145. When can companies gain competitive advantage over those rivals with plants in countries where costs are high? a. When companies have production facilities that carry input costs (especially labor) much higher than that found in low-cost countries. b. When companies meet government regulations that favor the local business climate and environmental regulations. c. When companies can build production facilities in low-cost countries (or source their products from contract manufacturers in these countries). d. When unique natural resources are easily extracted and carry very high export/tariffs or quotas. e. All of these.

c. When companies can build production facilities in low-cost countries (or source their products from contract manufacturers in these countries).

164. Profit sanctuaries are country markets or geographic regions where: a. a company can rank the competitive advantage opportunities in each industry. b. a company possesses good strategic fit with other businesses and identifies the value chain where this fit occurs. c. a company derives substantial profits because of its protected market position or unassailable competitive advantage. d. a company creates substantial investment strategies because it is losing competitive advantage over competitors. e. a company invests its dividends in expanding its foreign market presence.

c. a company derives substantial profits because of its protected market position or unassailable competitive advantage.

76. The difference between a core competence and a distinctive competence is that: a. a distinctive competence refers to a company's strongest resource or competitive capability, while a core competence refers to a company's lowest-cost and most efficiently executed value-chain activity. b. a core competence usually resides in a company's base of intellectual capital, whereas a distinctive competence stems from the superiority of a company's physical and tangible assets. c. a core competence is a competitively and strategically relevant activity that a firm performs well compared to its other activities, whereas a distinctive competence is a competitively relevant activity a firm performs well compared to other rival firms. d. a core competence represents a resource strength, whereas a distinctive competence is achieved by having more resource strengths than rival companies. e. a core competence usually resides in a company's technology and physical assets, whereas a distinctive competence usually resides in a company's know-how, expertise, and intellectual capital.

c. a core competence is a competitively and strategically relevant activity that a firm performs well compared to its other activities, whereas a distinctive competence is a competitively relevant activity a firm performs well compared to other rival firms.

147. A European-based company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets in many different parts of the world: a. is competitively disadvantaged when the euro declines in value against the Brazilian real. b. is competitively disadvantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. c. becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported. d. is competitively advantaged when the euro appreciates in value against the Brazilian real. e. has no interest in whether the euro grows stronger or weaker versus the Brazilian real unless its chief competitors are other companies located in countries whose currency is also the euro.

c. becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported.

104. Opportunities to differentiate a company's product offering: a. are most reliably found in the R&D portion of the value chain. b. are typically located in the sales and marketing portion of the value chain. c. can exist in activities all along an industry's value chain. d. usually are tied to product quality and customer service. e. are most frequently attached to a company's manufacturing expertise and to its ability to achieve scale economies in production.

c. can exist in activities all along an industry's value chain.

74. A company that has competitive assets that are central to its company strategy and superior to those of rival firms creates a: a. long-term derivative strategy. b. cash flow feasibility analysis. c. competitive advantage over other companies. d. resource deployment strategic plan. e. cost underestimation and benefit overestimation.

c. competitive advantage over other companies.

10. A company's strategy and its quest for competitive advantage are tightly connected because: a. without a competitive advantage a company cannot become the industry leader. b. without a competitive advantage a company cannot have a profitable business model. 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.

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.

87. Activity-based costing is used to evaluate a company's cost-competitiveness and: a. determine whether the value chains of rival companies are similar or different. b. benchmark the costs of primary value chain activities against the costs of the support value chain activities. c. determine the costs of each primary and support activity comprising a company's value chain and thereby reveal the nature and makeup of a company's internal cost structure. d. determine the costs of each strategic action a company initiates. e. None of these.

c. determine the costs of each primary and support activity comprising a company's value chain and thereby reveal the nature and makeup of a company's internal cost structure.

81. In order to gain value from the SWOT analysis, it is important that the company address the two most important parts of a SWOT analysis, which are: a. identifying the resource strengths and resource weaknesses. b. understanding the relationship between the strengths, weaknesses, opportunities, and threats and establishing criteria for remedying the company's shortfalls. c. drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into strategic actions. d. clarifying the firm's current position and ensuring the SWOT listings are complete. e. establishing a game plan to capitalize on the company's strengths and leverage the weaknesses in light of the available opportunities.

c. drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into strategic actions.

139. Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to: a. combat the bargaining power of foreign suppliers and help defend against the competitive threat of substitute products produced by foreign rivals. b. help raise needed financial capital from foreign banks and use the brand names of their partners to make sales to foreign buyers. c. get into critical country markets quickly, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations. d. help wage price wars against foreign competitors. e. exercise better control over efforts to revamp the global industry value chain.

c. get into critical country markets quickly, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations.

153. Cross-border alliances between domestic and foreign firms are more effective in: a. building multiple profit sanctuaries than in forging a mutually supportive global strategy. b. reducing supply chain costs than in reducing distribution costs. c. helping establish a new beachhead of opportunity rather than in achieving and sustaining global market leadership. d. helping the partners pursue a multidomestic strategy as compared to a global strategy. e. helping the partners pursue a global strategy as compared to a multidomestic strategy.

c. helping establish a new beachhead of opportunity rather than in achieving and sustaining global market leadership.

70. Tangible resources do not include: a. physical resources. b. financial resources. c. human assets. d. technological assets. e. organizational assets.

c. human assets.

61. A strategic group: a. consists of those industry members that are growing at about the same rate and have similar product line breadth. b. includes all rival firms having comparable profitability. c. is a cluster of industry members with similar competitive approaches and market positions in the market. d. consists of those firms whose market shares are about the same size. e. is made up of those firms having comparable profit margins.

c. is a cluster of industry members with similar competitive approaches and market positions in the market.

106. Pursuing continuous quality improvement as a uniqueness factor is sound because: a. it can be perceived to add differentiation features for new buyers. b. it can acknowledge the firm's strategic intent to compete aggressively. c. it can often reduce product defects, improve economy of use, and result in more end-user convenience. d. it always provides a competitive advantage. e. it is a sound approach to drive profit enhancement.

c. it can often reduce product defects, improve economy of use, and result in more end-user convenience.

7. A company's strategies stand 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.

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

134. Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense EXCEPT when: a. an activity can be performed better or more cheaply by outside specialists. b. it allows a company to focus its entire energies on its core business, leverage its key resources, and do even better what it already does best. c. it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently. d. it reduces the company's risk exposure to changing technology and/or changing buyer preferences. e. All of these.

c. it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently.

37. In the strategy-making, strategy-executing process, effective corporate governance requires a company's board of directors to: a. play the lead role in forming the company's strategy and then directly supervising the efforts and actions of senior executives in implementing and executing the strategy. b. provide guidance and counsel to the CEO in carrying out his/her duties as chief strategist and chief strategy implementer. c. oversee the company's strategic direction, evaluate the caliber of senior executives' skills, handle executive compensation, and oversee financial reporting practices. d. work closely with the CEO, senior executives, and the strategic planning staff to develop a strategic plan for the company and then oversee how well the CEO and senior executives carry out the board's directives in implementing and executing the strategic plan. e. review and approve the company's business model and also review and approve the proposals and recommendations of the CEO as to how to execute the business model.

c. oversee the company's strategic direction, evaluate the caliber of senior executives' skills, handle executive compensation, and oversee financial reporting practices.

23. Breaking down resistance to a new strategic vision typically requires that management, on an as needed basis: a. institute a balanced scorecard approach to measuring company performance, with the "balance" including a mixture of both old and new performance measures. b. inform company personnel about forthcoming changes in the company's strategy. c. reiterate the company's need for the new direction, while addressing employee concerns head-on, calming fears, lifting spirits, and providing them with updates and progress reports as events unfold. d. explain all updates and merits of the company's business model to align strategy with employee concerns. e. raise wages and salaries to win the support of company personnel for the company's new direction.

c. reiterate the company's need for the new direction, while addressing employee concerns head-on, calming fears, lifting spirits, and providing them with updates and progress reports as events unfold.

67. One important indicator of how well a company's present strategy is working is whether: a. it has more core competencies than close rivals. b. its strategy is built around at least two of the industry's key success factors. c. the company is achieving its financial and strategic objectives and whether it is an above-average industry performer. d. it is customarily a first-mover in introducing new or improved products (a good sign) or a late-mover (a bad sign). e. it is subject to weaker competitive forces and pressures than close rivals (a good sign) or stronger competitive forces and pressures (a bad sign).

c. the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.

72. One important indicator of how well a company's present strategy is working is whether: a. it has more core competencies than close rivals. b. its strategy is built around at least two of the industry's key success factors. c. the company is achieving its financial and strategic objectives and whether it is an above-average industry performer. d. it is customarily a first-mover in introducing new or improved products (a good sign) or a late -mover (a bad sign). e. it is subject to weaker competitive forces and pressures than close rivals (a good sign) or stronger competitive forces and pressures (a bad sign).

c. the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.

58. Competitive pressures stemming from buyer bargaining power tend to be weaker when: a. the number of buyers is small, such that each customer's business tends to be particularly important to a seller. b. buyer demand is growing slowly or maybe even declining. c. the costs incurred by buyers in switching to competing brands or to substitute products are relatively high. d. buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs. e. the buyer group consists of a few large buyers and the seller group consists of numerous small firms.

c. the costs incurred by buyers in switching to competing brands or to substitute products are relatively high.

112. The chief difference between a low-cost provider strategy and a focused low-cost strategy is: a. whether the product is strongly differentiated or weakly differentiated from rivals. b. the degree of bargaining power that buyers have. c. the size of the buyer group that a company is trying to appeal to. d. the type of value chain being used to achieve a low-cost competitive advantage. e. the number of upscale attributes incorporated into the product offering.

c. the size of the buyer group that a company is trying to appeal to. d. the type of value chain being used to achieve a low-cost competitive advantage.

56. When an industry member is a major customer of the supplier, and the relationship (partnership) is unusually effective and mutually advantageous: a. it is rare for such partnerships to have much competitive impact on those industry members not having such partnerships. b. one unfortunate outcome is that it tends to give the supply partners much enhanced bargaining power in their dealings with these industry members. c. there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers. d. there is a high likelihood of such partnerships reducing competitive pressures on ALL industry members, provided technological change in the suppliers' business is rapid and the item being supplied is a commodity. e. the usual result is to reduce competitive pressures on all industry members, provided the costs of the items furnished by supply chain partners amount to 50 percent or more of total cost.

c. there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers.

85. A company's value chain consists of two broad categories of activities: a. the primary activities that it performs in seeking to deliver value to shareholders in the form of higher dividends and a higher stock price. b. the internally performed activities associated with creating and enhancing the company's competitive assets. c. two broad categories of activities: the primary activities that create customer value and the requisite support activities that facilitate and enhance the performance of the primary activities. d. the basic processes the company goes through in performing R&D and developing new products. e. the series of steps a company goes through to develop a new product, get it produced and distributed into the marketplace, and then start collecting revenues and earning a profit.

c. two broad categories of activities: the primary activities that create customer value and the requisite support activities that facilitate and enhance the performance of the primary activities.

114. A focused differentiation strategy aims at securing competitive advantage: a. by providing niche members with a top-of-the-line product at a premium price. b. by catering to buyers looking for an upscale product at an attractively low price. c. with a product offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers. d. by developing product attributes that no other company in the industry has. e. by convincing a narrow, well-defined group of buyers that the company has a truly world-class product

c. with a product offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers.

174. The three tests for judging whether a particular diversification move can create value for shareholders are: a. the attractiveness test, the profitability test, and the shareholder value test. b. the strategic fit test, the competitive advantage test, and the return-on-investment test. c. the resource fit test, the profitability test, and the shareholder value test. d. the attractiveness test, the cost-of-entry test, and the better-off test. e. the shareholder value test, the cost-of-entry test, and the profitability test.

d. the attractiveness test, the cost-of-entry test, and the better-off test.

22. Which one of the following is NOT a characteristic of an effectively worded strategic vision statement? a. Directional (is forward-looking, describes the strategic course that management has charted that will help the company prepare for the future). b. Easy to communicate (is explainable in 5-10 minutes, and can be reduced to a memorable slogan). c. Graphic (paints a picture of the kind of company management is trying to create and the market position(s) the company is striving to stake out). d. Consensus-driven (commits the company to a "mainstream" directional path that almost all stakeholders will enthusiastically support). e. Focused (provides guidance to managers in making decisions and allocating resources).

d. Consensus-driven (commits the company to a "mainstream" directional path that almost all stakeholders will enthusiastically support).

19. Which one of the following is NOT one of the five basic tasks of the strategy-making, strategy-executing process? a. Developing a strategic vision of where the company needs to head and what its future business makeup will be. b. Setting objectives to convert the strategic vision into specific strategic and financial performance outcomes for the company to achieve. c. Crafting a strategy to achieve the objectives and get the company where it wants to go. d. Developing a profitable business model. e. Executing the chosen strategy efficiently and effectively.

d. Developing a profitable business model.

78. Which of the following does NOT represent a potential core competence? a. Skills in manufacturing a high-quality product at a low cost. b. Know-how in creating and operating systems for cost-efficient supply chain management. c. The capability to fill customer orders accurately and swiftly. d. Having a wider product line than rivals. e. The capability to speed new or next-generation products to the marketplace.

d. Having a wider product line than rivals.

18. Which of the following questions tests the merits of the firm's strategy and distinguishes it as a winning strategy? a. Is the company's strategy ethical and socially responsible and does it put enough emphasis on good product quality and good customer service? b. Is the company putting too little emphasis on growth and profitability and too much emphasis on behaving in an ethical and socially responsible manner? c. Is the strategy resulting in the development of additional competitive capabilities? d. Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance? e. Does the strategy strike a good balance between maximizing shareholder wealth and maximizing customer satisfaction?

d. Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?

62. Which one of the following pairs of variables is LEAST likely to be useful in drawing a strategic group map? a. Geographic market scope and degree of vertical integration. b. Brand name reputation and distribution channel emphasis. c. Product quality and product-line breadth. d. Level of profitability and size of market share. e. Price/perceived quality and image range and the extent of buyer appeal.

d. Level of profitability and size of market share.

118. What is the primary target market for a best cost-provider? a. Value hunting buyers. b. Price-conscious buyers. c. Best-price driven buyers. d. Value-conscious buyers. e. Brand-conscious buyer.

d. Value-conscious buyers.

103. A broad differentiation strategy improves profitability when: a. it is focused on product innovation. b. differentiating enhances product performance and quality. c. the differentiating features appeal to sophisticated and prestigious buyers. d. the higher price the product commands exceeds the added costs of achieving the differentiation. e. the differentiator charges a price that is only fractionally higher than the industry's low-cost provider

d. the higher price the product commands exceeds the added costs of achieving the differentiation.

172. Diversification becomes a relevant strategic option in all but which one of the following situations? a. When a company spots opportunities to expand into industries whose technologies and products complement its present business. b. When a company is only earning a low profit margin in its principal business. c. When a company has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses. d. When a company can open up new avenues for reducing costs by diversifying into closely related businesses. e. When a company can leverage existing competencies and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.

d. When a company can open up new avenues for reducing costs by diversifying into closely related businesses.

101. In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation? a. When the offerings of rival firms are essentially identical and readily available from many eager sellers. b. When there are few ways to achieve differentiation that have value to buyers. c. When price competition among rival sellers is especially vigorous. d. When buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high. e. When the majority of industry sales are made to a few, large-volume buyers.

d. When buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high.

127. In which of the following instances is being a first-mover NOT particularly advantageous? a. When moving first with a preemptive strike makes imitation difficult or unlikely. b. When first-time buyers remain strongly loyal to pioneering firms in making repeat purchases. c. When early commitments to new technologies, types of components, or emerging distribution channels produce an absolute cost advantage over rivals. d. When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover. e. When being a pioneer helps build a firm's image and reputation with buyers.

d. When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover.

155. When is a think-local, act-local approach to strategy making appropriate? a. When the need for local responsiveness is minimal and when potential efficiency gains from standardization is unrestricted by cross-country opportunities. b. When the local manager is intellectually savvy. c. When the local market provides strong opportunity for growth and profitability. d. When the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited. e. When the need for centralized decision making is relevant due to various macroeconomic and market conditions.

d. When the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited.

27. The difference between the concept of a company mission statement and the concept of a strategic vision is that: a. a mission concerns what to do to achieve short-term objectives, while a strategic vision concerns what to do to achieve long-term performance targets. b. the mission is to make a profit, whereas a strategic vision concerns what business model to employ in striving to make a profit. c. a mission statement deals with what to accomplish on behalf of shareholders, while a strategic vision concerns what to accomplish on behalf of customers. d. a mission statement typically concerns a company's purpose and its present business scope ("who we are and what we do and why we are here"), whereas the principal concern of a strategic vision portrays a company's aspirations for its future ("where are we going"). e. a mission statement deals with "where we are headed," whereas a strategic vision provides the critical answer to "how will we get there?"

d. a mission statement typically concerns a company's purpose and its present business scope ("who we are and what we do and why we are here"), whereas the principal concern of a strategic vision portrays a company's aspirations for its future ("where are we going").

9. The pattern of actions and business approaches that would NOT define a company's strategy include: a. actions to strengthen market standing and competitiveness by acquiring or merging. with other companies. b. actions to strengthen competitiveness via strategic coalitions and partnerships. c. actions to upgrade competitively important resources and capabilities. d. actions to gain sales and market share with lower prices despite increased costs. e. actions to strengthen the bargaining position of suppliers and distributors with rivals.

d. actions to gain sales and market share with lower prices despite increased costs.

149. The advantages of using a licensing strategy to participate in foreign markets include: a. being especially well-suited to achieve scale economies. b. being able to charge lower prices than rivals. c. enabling a company to achieve first-mover advantages quickly and easily. d. being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign markets. e. being able to achieve higher product quality and better product performance than with an export strategy.

d. being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign markets.

4. The objectives of a well-crafted strategy require management to strive to: a. match rival businesses products and quality dimensions in the marketplace. b. build profits for short-term success. c. realign the market to provoke change in rival companies. d. develop lasting success that can support growth and secure the company's future over the long term. e. re-create their business models regularly.

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

173. To create value for shareholders via diversification, a company must: a. get into new businesses that are profitable. b. diversify into industries that are growing rapidly. c. spread its business risk across various industries by only acquiring firms that are strong competitors in their respective industries. d. diversify into businesses that can perform better under a single corporate umbrella than they could perform operating as independent, stand-alone businesses. e. diversify into businesses that have either key success factors or value chains that are similar to its present businesses.

d. diversify into businesses that can perform better under a single corporate umbrella than they could perform operating as independent, stand-alone businesses.

31. 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. it assists managers in putting roughly equal emphasis on short-term and long-term performance targets. b. it entails putting equal emphasis on good strategy execution and good business model execution. c. a balanced scorecard approach pushes managers to avoid setting objectives that reflect the results of past decisions and organizational activities. d. 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. e. forces managers to put equal emphasis on financial and strategic objectives.

d. 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.

124. A blue-ocean strategy: a. is an offensive strike employed by a market leader that is directed at pilfering customers away from unsuspecting rivals to boost profitability. b. involves an unexpected (out-of- the-blue) preemptive strike to secure an advantageous position in a fast-growing market segment. c. works best when a company is the industry's low-cost leader. d. involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand. e. involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals.

d. involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

77. A core competence: a. detracts from a company's arsenal of competitive capabilities and competitive assets and is not a resource strength considered to be genuine. b. is typically results-based, residing in a company's tangible physical assets on the balance sheet. c. is often grounded in a single department's set of knowledge and expertise. d. is an activity that a firm performs proficiently that is also central to its strategy and competitive success. e. All of these.

d. is an activity that a firm performs proficiently that is also central to its strategy and competitive success.

59. A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers and customers: a. lacks powerful driving forces. b. gives each industry competitor the best potential for building sustainable competitive advantage over rival firms. c. makes it challenging for industry members to compete successfully unless they can strongly differentiate their products. d. is conducive to industry members earning attractive profits. e. requires that industry members have low costs in order to be competitively successful.

d. is conducive to industry members earning attractive profits.

28. Company managers connect values to the chosen strategic vision and mission by: a. integrating the company's values into its vision and mission/business purpose into one single statement. b. using a values-based balanced scorecard to measure the company's progress in achieving the vision. c. making achievement of the values a prominent part of the company's strategic objectives. d. making it clear that company personnel are expected to live up to the values in conducting the company's business and pursuing its strategic vision. e. making adherence to the company's values the centerpiece of the company's strategy.

d. making it clear that company personnel are expected to live up to the values in conducting the company's business and pursuing its strategic vision.

21. A company's strategic vision describes: a. "who we are and what we do." b. why the company does certain things in trying to please its customers. c. management's storyline of how it intends to make a profit with the chosen strategy. d. management's aspirations for the future and delineates the company's strategic course and long-term direction. e. what future actions the enterprise will likely undertake to outmaneuver rivals and achieve a sustainable competitive advantage.

d. management's aspirations for the future and delineates the company's strategic course and long-term direction.

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

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

17. The difference between a company's strategy and a company's business model is that: a. a company's strategy is management's game plan for achieving strategic objectives while its business model is management's game plan for achieving financial objectives. b. the strategy concerns how to compete successfully and the business model concerns how to operate efficiently. c. a company's strategy is management's game plan for realizing the strategic vision, whereas a company's business model is the game plan for accomplishing the business purpose or mission. d. strategy relates broadly to a company's competitive moves and business approaches while its business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint of being able to generate revenues sufficient to cover costs and realize a profit. e. a company's strategy is concerned with how to please customers while its business model is concerned with how to please shareholders.

d. strategy relates broadly to a company's competitive moves and business approaches while its business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint of being able to generate revenues sufficient to cover costs and realize a profit.

180. Businesses are said to be "related" when: a. they have several key suppliers and several key customers in common. b. their value chains have the same number of primary activities. c. their products are both sold through retailers. d. their value chains possess competitively valuable cross-business relationships that present opportunities to transfer resources from one business to another, combine similar activities and reduce costs, share use of a well-known brand name, and/or create mutually useful resource strengths and capabilities.. e. many consumers buy the products/services of both businesses.

d. their value chains possess competitively valuable cross-business relationships that present opportunities to transfer resources from one business to another, combine similar activities and reduce costs, share use of a well-known brand name, and/or create mutually useful resource strengths and capabilities..

55. Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of: a. whether the profits of suppliers are relatively high or low. b. the number of suppliers that each seller/industry member purchases from on average. c. how aggressively rival industry members are trying to differentiate their products. d. whether demand for supplier products is high and they are in short supply. e. whether the prices of the items being furnished by the suppliers are rising or falling.

d. whether demand for supplier products is high and they are in short supply.

98. Which of the following is NOT one of the five generic types of competitive strategy? a. A low-cost provider strategy. b. A broad differentiation strategy. c. A best-cost provider strategy. d. A focused low-cost provider strategy. e. A market share dominator strategy.

e. A market share dominator strategy.

88. The value chains of company distribution channel partners are relevant because: a. their costs and margins are part of the price the ultimate consumer pays. b. the activities they perform affect sales volumes and customer satisfaction. c. they have a competitive interest in promoting higher sales volumes and customer satisfaction. d. they perform primary and support activities that are related to the entire value chain system. e. All of these apply.

e. All of these apply.

137. An alliance becomes "strategic" as opposed to just a convenient business arrangement when it serves strategic purposes such as when designed to help: a. build, sustain, or enhance a core competence or competitive advantage. b. block a competitive threat. c. increase the bargaining power of alliance members over suppliers or buyers. d. open up important new market opportunities. e. All of these.

e. All of these.

141. A company that fails in managing their strategic alliance probably has not: a. incorporated contractual safeguards. b. made opportunities for learning a routine management process. c. created a system to manage alliances in a systematic fashion. d. established strong interpersonal relationships and established trust. e. All of these.

e. All of these.

152. Which of the following is the role played by local managers within experienced multinational companies? a. To contribute needed understanding of local market conditions, local buying habits, and local ways of doing business. b. To run the local operations for the company. c. To understand how "the system" works to detour the hazards of collaborative alliances with local companies. d. To serve as conduits for the flow of information between the corporate office and local operations. e. All of these.

e. All of these.

46. The competitive pressures on companies within an industry comes from those: a. associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry. b. companies in other industries attempting to win buyers over to their substitute products. c. associated with the threat of new entrants into the marketplace. d. associated with the bargaining power of suppliers and customers. e. All of these.

e. All of these.

148. Which of the following is not a generic strategy option for entering into foreign markets? a. Maintaining a national (one-country) production base and exporting goods to foreign markets. b. Establishing a subsidiary via acquisition or opt for a de nova approach. c. Franchising and licensing strategies. d. Alliances or joint ventures strategies. e. An enterprise-wide strategy to take over local competition.

e. An enterprise-wide strategy to take over local competition.

126. Which of the following signals would NOT warn challengers that strong retaliation is likely? a. Publicly announcing management's commitment to maintain market share. b. Publicly committing to a company policy of matching competitors' terms or pricing. c. Maintaining a war chest of cash and marketable securities. d. Making a strong counter-response to the moves of weak competitors. e. Announcing strong quarterly earnings potential to financial analysts.

e. Announcing strong quarterly earnings potential to financial analysts.

89. A much-used and potent managerial tool for determining whether a company performs particular functions or activities in a manner that represents "the best practice" when both cost and effectiveness are taken into account is: a. competitive strength analysis. b. activity-based costing. c. resource cost mapping. d. SWOT analysis. e. Benchmarking.

e. Benchmarking.

51. Which one of the following increases the competitive pressures associated with the threat of entry? a. When incumbent firms are likely to launch competitive initiatives to strongly contest the entry of newcomers. b. When strong brand preference and a high degree of customer loyalty exists for the product offerings of incumbents. c. When buyer demand for the product is growing fairly slowly. d. When few outsiders have the expertise and financial resources and capabilities to hurdle whatever entry barriers exist. e. When new entrants can expect to earn attractive profits.

e. When new entrants can expect to earn attractive profits.

113. A focused low-cost strategy can lead to attractive competitive advantage when: a. buyers are looking for the best value at the best price. b. buyers are looking for a budget-priced product. c. buyers are price sensitive and are attracted to brands with low switching costs. d. demand in the target market niche is growing rapidly and a company can achieve a big enough volume to fully capture all the available scale economies. e. a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

e. a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

181. Cross-business strategic fits can be found: a. in unrelated as well as related businesses and in the markets of foreign countries as well as in domestic markets. b. only in businesses whose products/services satisfy the same general types of buyer needs and preferences. c. mainly in either technology-related activities or sales and marketing activities. d. chiefly in the R&D portions of the value chains of unrelated businesses. e. anywhere along the respective value chains of related businesses.

e. anywhere along the respective value chains of related businesses.

35. The primary role of a functional strategy is to: a. unify the company's various operating-level strategies. b. specify how to build and strengthen the skills, expertise, and competencies needed to execute operating-level strategies successfully. c. support and add power to the corporate-level strategy. d. create compatible degrees of strategic intent among a company's different business functions. e. determine how to support particular activities in ways that support the overall business strategy and competitive approach.

e. determine how to support particular activities in ways that support the overall business strategy and competitive approach.

30. Adopting a set of "stretch" financial and "stretch" strategic objectives: a. pushes the company to strive for lesser but adequate profitability levels, because the stretch objectives are considered unattainable. b. is a widely held method for creating a "scorecard" for moderating company performance. c. helps convert the mission statement into meaningful company values. d. challenges company personnel to execute the strategy with greater enthusiasm, proficiency, and understanding. e. is an effective tool for pushing the company to perform at its full potential and deliver the best possible results.

e. is an effective tool for pushing the company to perform at its full potential and deliver the best possible results.

107. A differentiation-based competitive advantage: a. nearly always is attached to the quality and service aspects of a company's product offering. b. most usually is the result of highly effective marketing and advertising to enhance the brand, raise awareness, and build consistent customer experience. c. requires developing at least one distinctive competence that buyers consider valuable. d. hinges on a company's success in developing top-of-the-line product features that will command the highest price premium in the industry. e. often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match.

e. often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match.

111. A focused low-cost strategy seeks to achieve competitive advantage by: a. outmatching competitors in offering niche members an absolute rock-bottom price. b. delivering more value for the money than other competitors. c. performing the primary value chain activities at a lower cost per unit than can the industry's low-cost leaders. d. dominating more market niches in the industry via a lower cost and a lower price than any other rival. e. serving buyers in a narrow piece of the total market (target market niche) at a lower cost and lower price than rivals.

e. serving buyers in a narrow piece of the total market (target market niche) at a lower cost and lower price than rivals.