Exam #3

Which one of the following statements about backward vertical integration is false? A. What makes backward vertical integration such an attractive strategic option is the opportunity to capture the profit margins of suppliers and thereby increase the company's own profitability. B. Backward vertical integration can produce a differentiation-based competitive advantage when a company, by performing activities internally rather than utilizing outside suppliers, ends up with a better-quality product/service offering, improves the caliber of its customer service, or in other ways enhances the performance of its final product. C. For backward integration to be a viable and profitable strategy, a company must be able to (1) achieve the same scale economies as outside suppliers and (2) match or beat suppliers' production efficiency with no drop in quality. D. The best potential for being able to reduce costs via a backward integration strategy exists in situations where suppliers have outsized profit margins, where the item being supplied is a major cost component, and where the requisite technological skills are easily mastered or can be gained by acquiring a supplier with the desired technological know-how. E. Potential advantages of backward integration include sparing a company the uncertainty of being dependent on suppliers for crucial components or support services and lessening a company's vulnerability to powerful suppliers inclined to raise prices at every opportunity.

A. What makes backward vertical integration such an attractive strategic option is the opportunity to capture the profit margins of suppliers and thereby increase the company's own profitability.

A joint venture is an attractive way for a company to enter a new industry when A. a firm is missing some essential skills or 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 or capabilities or resources and needs a partner to supply the missing expertise and competencies or fill the resource gaps.

Economies of scope A. are cost reductions that flow from cost-saving strategic fits along the value chains of related businesses in the business lineup of a multibusiness corporation. B. arise only from strategic fit relationships in the production portions of the value chains of sister businesses. C. are more associated with unrelated diversification than related diversification. D. are present whenever diversification satisfies the attractiveness test and the cost-of-entry test. E. arise mainly from strategic fit relationships in the distribution portions of the value chains of unrelated businesses.

A. are cost reductions that flow from cost-saving strategic fits along the value chains of related businesses in the business lineup of a multibusiness corporation.

Using domestic plants as a production base for exporting goods to selected foreign country markets A. can be an excellent initial strategy to pursue international sales. B. can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country. C. works well when a firm does not have the financial resources to employ cross-market subsidization. D. is usually a weak strategy when competitors are pursuing multicountry strategies. E. can be a powerful strategy because the company is not vulnerable to fluctuating exchange rates.

A. can be an excellent initial strategy to pursue international sales.

One strategic fit-based approach to related diversification would be to A. diversify into new industries that present opportunities to combine value chain activities of two or more businesses to lower costs. B. diversify into those industries where the same kinds of driving forces and competitive forces prevail, thus allowing use of much the same competitive strategy in all of the businesses a company is in. C. acquire rival firms that have broader product lines so as to give the company access to a wider range of buyer groups. D. acquire companies in forward distribution channels (wholesalers and/or retailers). E. expand into foreign markets where the firm currently does no business.

A. diversify into new industries that present opportunities to combine value chain activities of two or more businesses to lower costs.

The strategic impetus for forward vertical integration is to A. gain better access to end users, improve market awareness, and/or include the end user's purchasing experience as a differentiating feature. B. the opportunity to capture the profits being earned by forward distribution allies (and thereby increase the company's own profits). C. reduce or eliminate disruptions in the delivery of the company's products to end users. D. avoid channel conflict. E. expand a company's geographic coverage.

A. gain better access to end users, improve market awareness, and/or include the end user's purchasing experience as a differentiating feature.

Market conditions and factors that tend not to favor first movers include A. growth in demand that depends on the development of complementary products or services that are not currently available and new industry infrastructure that is needed before buyer demand can surge. B. quick market penetration and strong loyalty among first-time customers. C. buyer behavior that is readily attracted to new technology or product features. D. conditions that make imitation difficult and absolute cost advantages that accrue to those who make early commitments to new technologies, components, or distribution channels. E. All of the above.

A. growth in demand that depends on the development of complementary products or services that are not currently available and new industry infrastructure that is needed before buyer demand can surge.

The strength of a "think local, act local" multidomestic strategy is that A. it matches a company's competitive approach to prevailing market and competitive conditions in each country market. B. each of a company's country strategies is almost totally different from and unrelated to its strategies in other countries. C. the plants located in different countries can be operated independent of one another, thus promoting greater achievement of scale economies. D. it avoids host-country ownership requirements and import quotas. E. it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

A. it matches a company's competitive approach to prevailing market and competitive conditions in each country market.

The market size and market growth rates in the foreign market can be influenced negatively by A. population sizes, income levels and cultural influences, the current state of the infrastructure and distribution and retail networks available. B. the ability of management to tailor a strategy to take into consideration all the country difference. C. the large size of emerging markets such as China and India. D. competitive rivalry that is only moderate in some countries. E. All of these.

A. population sizes, income levels and cultural influences, the current state of the infrastructure and distribution and retail networks available.

The option of sticking with the current business lineup makes sense when A. the company's present businesses offer attractive growth opportunities and can be counted on to create economic value for shareholders. B. companies are seeking multinational diversification. C. corporate executives are excited about market opportunities. D. corporate executives are satisfied with current performance of each of their businesses and can use redirect capabilities and resources for expansion opportunities E. corporate executives want to divest some businesses and retrench to a narrower diversification base

A. the company's present businesses offer attractive growth opportunities and can be counted on to create economic value for shareholders.

The essential requirement for different businesses to be "related" is that A. their value chains possess competitively valuable cross-business relationships. B. the products of the different businesses are bought by much 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 productions methods that they employ both entail economies of scale.

A. their value chains possess competitively valuable cross-business relationships.

In which of the following instances is retrenching to a narrower diversification base not likely to be an attractive or advisable strategy for a diversified company? A. When a diversified company has businesses that are weakly positioned in their respective industries and are struggling to earn a decent return on investment B. When a diversified company has too many cash cows C. When one or more businesses are cash hogs with questionable long-term potential D. When businesses in once-attractive industries have badly deteriorated E. When a diversified company has businesses that have little or no strategic or resource fits with the "core" businesses that management wishes to concentrate on

B. When a diversified company has too many cash cows

In which of the following instances are first-mover disadvantages not likely to arise? A. When the costs of pioneering are much higher than being a follower and only negligible buyer loyalty or cost savings accrue to the pioneer B. When rivals are employing offensive strategies rather than defensive strategies C. When the products of an innovator are somewhat primitive and do not live up to buyer expectations D. When buyers are skeptical about the benefits of a new technology or product being pioneered by a first mover E. When rapid market evolution (due to fast-paced changes in technology or buyer preferences) gives fast followers and maybe even cautious late movers the opening to leapfrog a first mover's products with more attractive next-version products

B. When rivals are employing offensive strategies rather than defensive strategies

A diversified company's business units exhibit good resource fit when A. each business is a cash cow. B. a company has the resources to adequately support the requirements of its businesses as a group without spreading itself too thin and when individual businesses add to a company's overall resource strengths. C. each business is sufficiently profitable to generate an attractive return on invested capital. D. each business unit produces large internal cash flows over and above what is needed to build and maintain the business. E. the resource requirements of each business exactly match the resources the company has available.

B. a company has the resources to adequately support the requirements of its businesses as a group without spreading itself too thin and when individual businesses add to a company's overall resource strengths.

A good example of vertical integration is A. a producer of organic vegetables deciding to expand into the production of organic fruits. B. a supermarket chain acquiring a distributor of fresh fruits and vegetables. C. a crude oil refiner purchasing a railroad company. D. a hospital opening a nursing home for the aged. E. a maker of prescription drugs acquiring a chain of hospitals

B. a supermarket chain acquiring a distributor of fresh fruits and vegetables.

The Achilles' heel (or biggest danger/pitfall) of relying heavily on alliances and cooperative strategies is A. that partners will not divide profits from the alliance in an equitable manner. B. becoming dependent on other companies for essential expertise and capabilities. C. incurring excessive administrative expenses associated with engaging in collaborative efforts. D. having to compromise the company's own priorities and strategies in reaching agreements with partners. E. that strategic allies frequently become rivals in the marketplace.

B. becoming dependent on other companies for essential expertise and capabilities.

The businesses in a diversified company's lineup exhibit good resource fit when A. the resource requirements of each business exactly match the resources the company has available. B. individual businesses add to a company's resource strengths and when a company has the resources to adequately support the requirements of its businesses as a group without spreading itself too thin. C. each business generates just enough cash flow annually to fund its own capital requirements and thus does not require cash infusions from the corporate parent. D. each business unit produces sufficient cash flows over and above what is needed to build and maintain the business, thereby providing the parent company with enough cash to pay shareholders a generous and steadily increasing dividend. E. there are enough cash cow businesses to support the capital requirements of the cash hog businesses.

B. individual businesses add to a company's resource strengths and when a company has the resources to adequately support the requirements of its businesses as a group without spreading itself too thin.

The purposes of defensive strategies include A. discouraging deep price discounting on the part of ambitious rivals seeking to capture additional sales and market share. B. lowering the risk of being attacked by rivals, weakening the impact of any attack that occurs, and influencing challengers to aim their offensive efforts at other rivals. C. insulating a company from the impact of competitive pressures and industry driving forces. D. weakening competitors in ways that make them largely irrelevant. E. widening a company's competitive advantage over rivals.

B. lowering the risk of being attacked by rivals, weakening the impact of any attack that occurs, and influencing challengers to aim their offensive efforts at other rivals.

Merger and acquisition strategies A. are nearly always a superior strategic alternative to forming alliances or partnerships with these same companies. B. may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry and lead the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities. C. are a particularly effective way of pursuing a blue ocean strategy and outsourcing strategies. D. seldom are a superior strategic alternative to forming alliances or partnerships with these same companies because of the financial drain of using the company's cash resources to accomplish the merger or acquisition. E. are one of the best ways for helping a company strongly differentiate its product offering and use a differentiation strategy to strengthen its market position

B. may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry and lead the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities.

The advantages of using an export strategy to build a customer base in foreign markets include A. being able to minimize shipping costs, avoid tariffs, and curb the effects of fluctuating exchange rates. B. minimizing capital requirements and involvement in foreign markets. C. being cheaper and more cost effective than licensing and franchising. D. being cheaper and more cost effective than a multicountry strategy. E. facilitating the establishment of profit sanctuaries in foreign countries and being more suited to accommodating local buyer tastes than a global strategy.

B. minimizing capital requirements and involvement in foreign markets.

The basic purpose of calculating competitive strength scores for each of a diversified company's business units is to A. rank the business unit from best to worst in terms of potential for cost reduction and profit margin improvement. B. provide a quantitative measure of the overall market strength and competitive standing for each business unit. C. determine which business unit has the greatest number of resource strengths, competencies, and competitive capabilities and which one has the least. D. determine which one has the biggest market share and is growing the fastest. E. rank each business unit's strategy from best to worst.

B. provide a quantitative measure of the overall market strength and competitive standing for each business unit.

One of the suggested advantages of an unrelated diversification strategy is that it A. expands a firm's competitive advantage opportunities to include a wider array of businesses. B. spreads the stockholders' risks across a group of truly diverse businesses. C. increases strategic fit opportunities and the potential for a 1 + 1 = 3 outcome on the bottom line. D. results in having more cash cow businesses than cash hog businesses. E. facilitates capturing the financial fits among sister businesses (as compared to a strategy of related diversification).

B. spreads the stockholders' risks across a group of truly diverse businesses.

The difference between a merger and an acquisition is A. that a merger involves one company purchasing the assets of another company with cash, whereas an acquisition involves one company becoming the owner of another company by buying all of the shares of its common stock. B. that a merger is the combining of two or more companies into a single corporate entity (with the newly created company often taking on a new name) whereas an acquisition is a combination in which one company, the acquirer, purchases and absorbs the operations of another, the acquired. C. basically a play on words—in both instances, two companies become one. D. that the brands of both companies are retained in a merger whereas with an acquisition there is only one surviving brand name. E. that a merger involves two or more companies deciding to adopt the same strategy whereas an acquisition involves one company becoming the owner of another company but with each company still pursuing its own separate strategy.

B. that a merger is the combining of two or more companies into a single corporate entity (with the newly created company often taking on a new name) whereas an acquisition is a combination in which one company, the acquirer, purchases and absorbs the operations of another, the acquired.

Which one of the following is an example of an offensive strategy? A. Blocking the avenues open to challengers B. Signaling challengers that retaliation is likely C. Pursuing continuous product innovation to draw sales and market share away from less innovative rivals D. Introducing new features or models to fill vacant niches in its overall product offering and better match the product offerings of key rivals E. Maintaining a war chest of cash and marketable securities

C. Pursuing continuous product innovation to draw sales and market share away from less innovative rivals

To use location to build competitive advantage, a company that operates multinationally or globally must A. employ either an export strategy or a franchising strategy. B. scatter its production plants across many countries in different parts of the world so as to minimize transportation costs. C. consider (1) whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and (2) in which countries to locate particular activities. D. locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs. E. concentrate all of its value chain activities in a single country—the one that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

C. consider (1) whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and (2) in which countries to locate particular activities.

The two biggest drawbacks or disadvantages of unrelated diversification are A. the difficulties of passing the cost-of-entry test and the ease with which top managers can make the mistake of diversifying into businesses where competition is too intense. B. the difficulties of capturing financial fit and having insufficient financial resources to spread business risk across many different lines of business. C. demanding managerial requirements and limited competitive advantage potential that cross-business strategic fit provides. D. Ending up with too many cash hog businesses and too much diversity among the competitive strategies of the businesses it has diversified into. E. the difficulties of achieving economies of scope and conflicts/incompatibility among the competitive strategies of the company's different businesses.

C. demanding managerial requirements and limited competitive advantage potential that cross-business strategic fit provides.

The transnational approach of a firm using a "think global, act local" version of a global strategy entails A. producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country. B. little or no strategy coordination across countries. C. pursuing the same basic competitive strategy theme (low-cost, differentiation, best-cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions. D. selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so that buyers in each country market will think they are buying a locally made brand. E. selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country) but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market.

C. pursuing the same basic competitive strategy theme (low-cost, differentiation, best-cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.

The most important strategy-making guidance that comes from drawing a nine-cell industry attractiveness-competitive strength matrix is A. which businesses in the portfolio have the most potential for strategic fit and resource fit. B. why cash cow businesses are more valuable than cash hog businesses. C. that corporate resources should be concentrated on those businesses enjoying both a higher degree of industry attractiveness and competitive strength and that businesses having low competitive strength in relatively unattractive industries should be looked at for possible divestiture. D. which businesses have the biggest competitive advantages and which ones confront serious competitive disadvantages. E. which businesses are in industries with profitable value chains and which are in industries with money-losing value chains.

C. that corporate resources should be concentrated on those businesses enjoying both a higher degree of industry attractiveness and competitive strength and that businesses having low competitive strength in relatively unattractive industries should be looked at for possible divestiture.

A company's menu of strategic choices to supplement its decision to employ one of the five basic competitive strategies does not include A. whether and when to employ defensive strategies to protect the company's market position. B. whether to integrate backward or forward into more stages of the industry value chain. C. whether to employ a preemptive strike type of green ocean strategy. D.whether and when to go on the offensive and initiate aggressive strategic moves to improve the company's market position. E. whether to bolster the company's market position via acquisition or merger and/or whether to enter into strategic alliances or partnership arrangements with other enterprises.

C. whether to employ a preemptive strike type of green ocean strategy.

A blue ocean type of offensive strategy A. refers to initiatives by a market leader to steal customers away from unsuspecting smaller rivals. B. involves a preemptive strike to secure an advantageous position in a fast-growing market segment. C. entails attacking rivals head-on with deep price discounts and continuous product innovation. D. involves abandoning efforts to beat out competitors in existing markets and, instead, inventing 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 surprise hit-and-run guerrilla tactics to harass money-losing rivals and drive them into bankruptcy.

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

The competitive strategy of a firm pursuing a "think global, act local" approach to strategy making A. entails little or no strategy coordination across countries. B. usually involves cross-subsidizing the prices in those markets where there are significant country-to-country differences in the product attributes that customers are most interested in. C. involves selling a mostly standardized product worldwide, but varying a company's use of distribution channels and marketing approaches to accommodate local market conditions. D. is essentially the same in all country markets where it competes but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions. E. involves having strongly differentiated product versions for different countries and selling them under distinctly different brand names (one for each country or group of neighboring countries) so that there will be no doubt in customers' minds that the product is more local than global.

D. is essentially the same in all country markets where it competes but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions.

The two best reasons for investing company resources in vertical integration (either forward or backward) are to A. speed entry into foreign markets and/or exercise stronger control over operating costs. B. broaden the firm's product line and/or enable the company to charge a premium price for its product/service. C. gain a first-mover advantage in adopting new production technologies and/or employ potent defensive strategies. D. strengthen the company's competitive position and/or boost its profitability. E. achieve greater product differentiation and/or gain better access to prospective buyers.

D. strengthen the company's competitive position and/or boost its profitability.

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.

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 skills and capabilities from one business to another, share resources or facilities to 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 skills and capabilities from one business to another, share resources or facilities to reduce costs, share use of a well-known brand name, and/or create mutually useful resource strengths and capabilities.

In expanding outside its domestic market, a company can gain competitive advantage by A. not pursuing costly efforts to build multiple profit sanctuaries. B. deliberately choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices), thus keeping costs and prices lower than rivals. C. using an export strategy to circumvent the risks of adverse exchange rate fluctuations. D. using location to lower costs or help achieve greater product differentiation and it can use cross-border coordination in ways a domestic-only competitor cannot. E. employing a multidomestic strategy instead of a global strategy.

D. using location to lower costs or help achieve greater product differentiation and it can use cross-border coordination in ways a domestic-only competitor cannot.

A "think local, act local" multidomestic strategy works particularly well when A. host governments enact regulations requiring that products sold locally meet strictly defined manufacturing specifications or performance standards. B. there are significant country-to-country differences in customer preferences and buying habits. C. diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country to country. D. there are significant country-to-country differences in distribution channels and marketing methods. E. All of the above.

E. All of the above.

In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations when A. there are significant scale economies in performing an activity. B. the costs of manufacturing or other activities are significantly lower in some geographic locations than in others. C. there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations). D. certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. E. All of the above.

E. All of the above.

Why do mergers and acquisitions sometimes fail to produce anticipated results? A. They do not produce the hoped for outcomes and changes to existing operations may not eventuate. B. Cost savings may prove smaller than expected. C. Gains in competitive capabilities may take substantially longer or never materialize. D. Efforts to mesh corporate cultures can stall due to formidable resistance from organization members and key employees can become disenchanted and leave. E. All of the above.

E. All of the above.

A company that is already diversified may choose to broaden its business base by building positions in new related or unrelated businesses because A. it has resources or capabilities that are eminently transferable to other related or complementary businesses. B. the company's growth is sluggish and it needs the sales and profit boost that a new business can provide. C. management wants to lessen the company's vulnerability to seasonal or recessionary influences. D. unfavorable driving forces face the company's core business. E. All of these.

E. All of these.

Cross-border coordination contributes to a competitive advantage for a global competitor by A. allowing production to be shifted from country to country to take advantage of exchange rate fluctuations, energy costs, wage rates, or changes in tariffs and quotas. B. allowing knowledge gained in one location to be transferred to operations in other countries. C. shifting workloads from where they are unusually heavy to locations were personnel are underutilized. D. accelerating product development and enhancing innovation by globally linking and coordinating the scattered R&D departments of a multinational company. E. All of these.

E. All of these.

One of the most viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets includes A. try to change the local market to better match the way the company does business elsewhere. B. be prepared to modify aspects of the company's business model to accommodate local circumstances. C. prepare to compete on the basis of low price. D. stay away from those emerging markets where it is impractical to modify the company's business model to accommodate local circumstances. E. All of these.

E. All of these.

Strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms are a potentially fruitful means for the partners to A. enter additional country markets. B. gain better access to scale economies in production and/or marketing. C. fill competitively important gaps in their technical expertise and/or knowledge of local markets. D. share distribution facilities and dealer networks, thus mutually strengthening their access to buyers. E. All of these.

E. All of these.

The advantages of manufacturing goods in a particular country A. are significantly impacted by where its production, distribution, and customer service activities are located. B. can be affected by differences in operating costs and profitability due to wage rate and worker productivity. C. can be affected by differences in energy costs, environmental regulations, tax rates, and inflation rates. D. can be influenced by cheaper access to essential natural resources. E. All of these.

E. All of these.

The reasons behind the accelerating pace of globalization include A. countries with previously planned economies are embracing market or mixed economies. B. information technology shrinks the importance of geographic distances. C. ambitious growth-minded countries race to build global share. D. lower barriers to international trade. E. All of these.

E. All of these.

Which of the following are strategy options for entering foreign markets? A. Maintaining a national (one-country) production base and exporting goods to foreign markets. B. Establishing a subsidiary in a foreign market. C. Franchising and licensing strategies. D. Forming strategic alliances or joint ventures with foreign partners. E. All of these.

E. All of these.

Competing in the markets of foreign countries generally does not involve which of the following? A. Country-to-country differences in consumer buying habits and buyer tastes and preferences B. Country-to-country variations in host-government restrictions and requirements and fluctuating exchange rates C. Whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide D. In which countries to locate company operations for maximum locational advantage (given country-to-country variations in wages rates, worker productivity, energy costs, tax rates, and the like) E. Crafting a multicountry strategy that works just as well in one country as in another and that also has the appeal of turning the world market into one big profit sanctuary

E. Crafting a multicountry strategy that works just as well in one country as in another and that also has the appeal of turning the world market into one big profit sanctuary

Being first to initiate a strategic move can have a high payoff in all but which one of the following instances? A. When pioneering helps build a firm's image and reputation with buyers B. When first-time customers remain strongly loyal to pioneering firms in making repeat purchases C. When early commitments to new technologies, new-style components, new or emerging distribution channels, and so on can produce an absolute cost advantage over rivals D. When moving first can constitute a preemptive strike, making imitation extra hard or unlikely E. When pioneering leadership is more costly than followership

E. When pioneering leadership is more costly than followership

The best place to look for cross-business strategic fits is A. in R&D and technology activities. B. in supply chain activities. C. in sales and marketing activities. D. in production and distribution activities. E. anywhere along the respective value chains of related businesses—no one place is best.

E. anywhere along the respective value chains of related businesses—no one place is best.

Outsourcing strategies A. are nearly always a more attractive strategic option than merger and acquisition strategies. B. carry the substantial risk of raising a company's costs. C. carry the substantial risk of making a company overly dependent on its suppliers. D. increase a company's risk exposure to changing technology and/or changing buyer preferences. E. involve farming out value chain activities presently performed in-house to outside specialists and strategic allies.

E. involve farming out value chain activities presently performed in-house to outside specialists and strategic allies.

A hit-and-run or guerrilla warfare type offensive strategies involve A. random offensive attacks used by a market leader to steal customers away from unsuspecting smaller rivals. B. undertaking surprise moves to secure an advantageous position in a fast-growing and profitable market segment; usually the guerrilla signals rivals that it will use deep price cuts to defend its newly won position. C. work best if the guerrilla is the industry's low-cost leader. D. pitting a small company's own competitive strengths head-on against the strengths of much larger rivals. E. unexpected attacks (usually by a small competitor) to grab sales and market share from complacent or distracted rivals.

E. unexpected attacks (usually by a small competitor) to grab sales and market share from complacent or distracted rivals.