test 2 mgmt 490

PepsiCo divested its group of fast-food restaurant businesses (KFC, Pizza Hut, and Taco Bell) to Yum! Brands in order to allow PepsiCo to focus on its core soft drink and snack-food businesses. A useful guide to determine whether or when to divest a business subsidiary is to ask,

"If we were not in this business today, would we want to get into it now?"

Anna and Martha are owners and managers of A&M, a limited liability corporation (LLC) that provides a wide array of services: mailing, notary services, packaging and pickup for UPS and FedEx, as well as faxing and document scanning. Anna and Martha have asked you, as their consultant, to consider whether or not they might want to diversify into financial planning due to the increasing number of retirees moving into their community. How would you advise Anna and Martha to proceed?

A&M needs to consider diversification opportunities into financial planning if you have encountered diminishing market opportunities and stagnating sales in your principal business.

While outsourcing has allowed Apple to reap the benefits of lower cost and more flexible manufacturing, its lack of direct control has proven to be a challenge. How did Apple step in to improve working conditions at Foxconn, one of its major suppliers?

Apple tightened its supplier standards and increased its efforts at monitoring conditions and enforcing its standards, such as over 700 comprehensive site audits each year to ensure compliance

Choose the best example of a women's fashion retailer that uses cost drivers effectively to manage its value chain activities.

Bowdon Designs uses just-in-time inventories and produces made-to-order products as and when customer demand rises.

What is the BEST guideline for deciding what the priorities should be for allocating resources to the various businesses of a diversified company?

Business subsidiaries with the brightest profit and growth prospects, attractive positions on the nine-cell matrix, and solid strategic and resource fits generally should head the list for corporate resource support.

There is ample room for companies to customize their diversification strategies and be defined as being either narrowly or broadly diversified, and when combination related-unrelated diversification strategy options are adopted, they have particular appeal to

Business-level strategy that successfully combines differentiation and cost-leadership activities using value innovation to reconcile the inherent trade-offs.

From the list below, identify the company that is not the lowest-cost provider in its industry.

CNN

When pharmacy chain CVS Health announced a $69 billion merger with the health insurance giant Aetna late in 2017, top management of CVS needed to weigh a number of strategic considerations except

CVS's opportunities to pursue debt reduction to lower its debt/equity ratio while maintaining asset levels.

As general manager of a local restaurant chain, you have been asked to develop defensive moves to protect your company's market position and restrict any challenger's options for initiating a competitive attack. You would present all but ONE of the following strategic options to your executive team.

Challenge struggling runner-up restaurants that are on the verge of going under.

What is NOT part of the process of upgrading core competencies and competitive capabilities?

Core competencies generally grow out of company efforts to master a strategy-critical technology or to invent and patent a valuable technology.

What business case would you not likely make to Costco to decentralize its organizational structure and empower its employees?

Decentralized organizational structures can impair cross-unit collaboration.

Imagine you have been asked to present a strategy implementation plan to the top management of Didrickson, a Swedish multidomestic manufacturer and marketer of outdoor activewear. Your presentation would NOT likely include which implementation option as a means of building and strengthening its competitively valuable resources and capabilities?

Didrickson needs to shift from decentralized to centralized decision-making so as to give senior executives more authority and control in driving cultural change

Imagine you are the CEO of a regional ride-sharing company considering diversification into meal delivery services. How would you determine whether or not your diversification strategy would be successful?

Diversification would result in enhanced shareholder value.

Aimée, owner of The Discerning Equestrian, a local apparel, tack, and equipment outlet, is facing growing competition from online retailers such as Equestrian.com. She has sought your advice about the managerial task of executing strategy. What would you NOT be likely to advise her to do?

Employ new techniques to overcome managerial resistance to change.

Choose the intended outcome that did not happen with Expedia's merger and acquisition of HomeAway, Inc.

Expedia suppressed its rival company Orbitz's breakthroughs in management or technology.

Mary Barra, CEO of General Motors, has asked you to evaluate the financial resource fit of its new autonomous (self-driving) vehicle and electric vehicle (EV) divisions. You would advise CEO Barra that a diversified company's business units exhibit good financial resource fit when

GM has the resources to adequately support the requirements of its new divisions as a group without spreading itself too thin because these new divisions have the potential to add to GM's overall strengths.

Glassdoor is a California-based social media company that provides a space for employees and former employees to anonymously review companies and their management. You have recently had a job offer to relocate and work for Glassdoor. Based on what you have learned about strategy-supportive talent management practices, what might be a good reason NOT to accept Glassdoor's offer?

Glassdoor has a track record of eliminating the bottom 10 percent of the lowest-performing employees each year to increase the overall quality performance metrics to above-average industry standards

The best example of forward vertical integration is

Harley-Davidson and Ducati's own-branded stores that sell motorcycles and related memorabilia.

_____________ is the range of product and service segments that the firm serves within its market.

Horizontal scope

What might be considered to be a major drawback of employing an outsourcing strategy?

It can hollow out a firm's own capabilities and cause it to lose touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.

Which of the following best describes the multidivisional structure?

It is a decentralized structure consisting of a set of operating divisions organized along business, customer, product, or geographic lines, and central corporate headquarters.

Which of the following statements about recruiting, training, and retaining capable employees is not accurate?

It is important to let people to do what they do best rather than encourage them to experiment with different job functionalities.

Why do mergers and acquisitions sometimes fail to produce anticipated results?

Key employees at the acquired company can quickly become disenchanted and leave.

Late-mover advantages (or first-mover disadvantages) are not likely to arise when

Late-mover advantages (or first-mover disadvantages) are not likely to arise when

What is the rule for organizing the work effort to support good strategy execution?

Match the firm's organizational structure to its unique strategy.

The following are good examples of outsourcing some value chain activities that were formerly performed in-house except

Nordstrom retails certain products for Coach Inc.

You are advising Hoffmann-LaRoche, which has set up Roche Partnering to manage more than 190 alliances in the healthcare industry. What is the greatest risk that might cause those alliances to be unstable or break apart?

One or more of the 190 partners in Roche Partnering could gain access to another company's proprietary knowledge base, technologies, or trade secrets.

What is NOT a rationale for a company to pursue outsourcing as a strategy execution step in order to enhance the performance of value chain activities?

Outsourcing support services often has the disadvantage of raising fixed and variable costs.

Imagine you have been asked to present a strategy implementation plan to the top management of Patagonia, a Los Angeles, California-based manufacturer and marketer of outdoor activewear and extreme adventure gear. Which implementation option would your presentation likely not include as a means of building and strengthening Patagonia's competitively valuable resources and capabilities?

Patagonia needs to shift from decentralized to centralized decision-making to give senior executives more authority and control in driving cultural change.

Barbara Rentler, CEO of Ross Stores, Inc. (parent company of Ross Dress for Less and dd's Discount retail chains) is considering broadening her company's business scope, by building positions in new related or unrelated businesses. Ms. Rentler would be advised to pursue a diversification strategy for all of the following reasons except

Ross's top management wants to increase its compensation.

What is the difference between economies of scale and economies of scope?

Scale refers to cost savings that accrue directly from larger-sized operations, while scope stems directly from strategic fit along the value chains of related businesses.

What is the advantage of acquiring capabilities through merger and acquisition?

Speed, because developing new capabilities internally can take many years of effort.

Under which circumstance can an alliance be considered just a convenient business arrangement rather than "strategic"?

The alliance helps the company obtain additional financing on better credit terms.

Domino's Pizza has a well-known slogan: "We'll deliver in 30 minutes or less, or it's free!" Using this slogan, what has the pizza company achieved?

The company built a unique customer value proposition.

Imagine that you are proposing that your organization reconfigure itself into a highly centralized organizational structure. What would NOT be one of your supporting rationales for this change?

The decision about where to draw the divisional lines depends foremost on the nature of the relatedness and the strategy-critical building blocks, in terms of which businesses have key value chain activities in common.

How would you explain the difference between a one-business company and a diversified company?

The first uses a business-level strategy, while the second uses a set of business strategies and a corporate strategy.

A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true?

The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs.

If you were advising Hoffmann-LaRoche, which set up Roche Partnering to manage more than 190 alliances in the healthcare industry, what might not be a reason why some of those alliances could prove to be unstable or break apart?

The partners may disagree among themselves over how to divide the profits gained from joint collaboration.

_________ is the extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system.

Vertical scope

An example of a company that does not use blue-ocean market strategy is

Walmart's logistics and distribution in the retail industry.

Which of the following statements is NOT accurate with respect to building a company's competencies and capabilities?

When a company succeeds in hiring talented employees and training them properly, competencies and capabilities tend to develop quickly and, once put in place, can last for a decade or more.

Conditions that may make corporate restructuring strategies appealing include all of the following except

a business lineup that consists of too many cash cow businesses.

The implementation process is likely to be hampered by missed deadlines, misdirected efforts, and managerial ineptness if

a capable results-oriented management team is not in place.

A good example of blue-ocean type of offensive strategy is

a company like Australian winemaker Casella Wines that created a Yellow Tail brand designed to appeal to a wider market, one that also includes consumers of other alcoholic beverages.

Which of the following is a diversified business with one major "core" business and a collection of small related or unrelated businesses?

a dominant business enterprise

A focused low-cost strategy can lead to attractive competitive advantage when

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

Companies engaged in a single line of business most commonly utilize an organizational structure that can be

a functional (departmental) organizational structure.

The difference between a merger and an acquisition is that

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).

Among the known structural forms of organization, which is non-existent?

a network structure where independent organizations are involved in a common undertaking

In formulating an action agenda to implement and execute a new or different strategy, the place for managers to begin is with

a probing assessment of what the organization must do differently and better to carry out the strategy successfully.

According to the value-price-cost framework, deploying a differentiation strategy involves costs that might well exceed those of the average competitor, but with a successful differentiation strategy, that disadvantage is more than made up for by

a rise in the perceived value of the differentiated good, giving the differentiator a clear competitive advantage over the average rival.

What are value drivers?

a set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect

When General Electric created an independent health care division and divested it in June 2018 by distributing to GE's stockholders new shares in the new business, the strategic action was termed

a spin-off.

Retrenching to a narrower diversification base is

a strategy that allows a diversified firm's energies to be concentrated on building strong positions in a smaller number of businesses rather the stretching its resources and managerial attention too thinly across many businesses.

The most important leadership trait in the strategy execution process is

a strong, confident sense of what to do and how to do it.

What does a good strategy execution require?

a team effort with all managers having strategy executing responsibility in their areas of authority, and making all employees active participants in the strategy execution process

Success with a best-cost provider strategy designed to outcompete high-end differentiators requires

achieving significantly lower costs in providing the upscale features.

Steps to update a company's capabilities to match changing market conditions and customer expectations take place often include

acquiring, developing, and strengthening key resources and capabilities.

The best reason for investing company resources in vertical integration (either forward or backward) is to

add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.

A primary advantage of a centralized organization structure is that it

allows for quick decision making and strong leadership in crisis situations.

The process of recruiting and retaining capable employees is

always an essential ingredient of successful strategy execution.

Bonobos's Guideshop store concept allows men to have a personalized shopping experience, where they can try on clothing in any size or color, and then have it delivered the next day to their home or office. This fashion retail concept is a good example of

an offensive strategy to seek uncharted waters and compete in blue oceans.

You are the general manager of a regional HR staffing company. What strategic consideration would be LEAST likely to influence your decision to diversify your firm into new, related or unrelated business services?

analyzing and settling on the appropriate value chain for each business the company has entered

The basic premise of unrelated diversification is that

any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.

To attain a differentiation-based competitive advantage, a company would be UNLIKELY to

appeal to buyers who are sophisticated and shop hard for the best, stand-out differentiating attributes.

Building organizational bridges with external allies is aided by

appointing "relationship managers" and giving them responsibility for making particular strategic partnerships or alliances generate the intended benefits.

Best-cost provider strategies are those that

are a hybrid of low-cost provider and differentiation strategies that aim at providing desired attributes while beating rivals on price.

Checking a diversified company's business portfolio for the competitive advantage potential of cross-business strategic fits does not involve ascertaining the extent to which sister business units

are cash cows and which ones are cash hogs.

Economies of scope

are cost reductions that flow from strategic fit along the value chains of related businesses.

The best strategic alliances

are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit.

Michelle Buck, CEO of the Hershey Company has hired you as a consultant to assess her diversified company's business units for cross-business competitive advantage potential. Your assessment would not normally involve ascertaining the extent to which Hershey's business units

are making maximum use of the parent company's competitive advantages.

Merger and acquisition strategies

are often driven by such strategic objectives as to expand a company's geographic coverage or extend its business into new product categories.

The overriding aim in building a management team should be to

assemble a critical mass of talented managers who can function as agents of change, work well together as a team, and produce organizational results that are dramatically better than what one or two star managers acting individually can achieve.

Because of the many managerial tasks involved and the role of leadership in strategy execution, when implementing a strategy

assembling a strong management team is especially important.

A company that succeeds in differentiating its product offering from those of its rivals is UNLIKELY to

attract mainly price-conscious buyers.

The three tests for judging whether a particular diversification move can create value for shareholders are the

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

To test whether a particular diversification move has good prospects for creating added shareholder value, corporate strategists should use the

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

Firms generally leverage the expertise of their talent pool in building capabilities by

augmenting or recombining well-established capabilities with existing resources.

A vertical integration strategy can expand the firm's range of activities

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

The managerial approach to implementing and executing a strategy should always

be customized to fit the particulars of a company's situation.

A company's competitive strategy should

be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies.

Why might a company not choose to outsource certain value chain activities presently performed in-house?

because it enables a company to gain better access to end users and better market visibility

A company achieves low-cost leadership when it

becomes the industry's lowest-cost provider rather than just being one of several competitors with comparatively low costs.

The nine-cell attractiveness-strength matrix provides clear, strong logic for considering using

both industry attractiveness and business strength in allocating resources and investment capital to its different businesses.

Core competencies and competitive capabilities are usually

bundles of skills and know-how that most often grow out of the collaborative efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.

Unlikely candidates for divestiture in a corporate restructuring effort are

businesses compatible with the company's revised diversification strategy

A low-cost leadership strategy becomes competitively powerful when

buyers of the product or service use the product or service in the same ways.

An offensive to yield good results can be short if

buyers respond immediately (to a dramatic cost-based price cut or imaginative ad campaign).

Perceived value and signaling value are often an important part of a successful differentiation strategy because

buyers seldom will pay for value they don't perceive, no matter how real the value of the differentiating extras may be.

How has Zara gone about building an organization capable of proficient strategy execution?

by tightly aligning design, production, advertising, and real estate with the overall strategy of fast fashion

Opportunities to differentiate a company's product offering

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

Critics of companies that use outsourcing contend that shifting responsibility for performing value chain activities to outside specialists

can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outside suppliers, and short of the resource strengths to be a master of its own destiny.

With a strategy of unrelated diversification, an acquisition is deemed to have potential if it

can pass the industry attractiveness test and the cost of entry test, and if it has good prospects for profit growth.

Experience indicates that strategic alliances

can suffer culture clash and integration problems due to different management styles and business practices.

A major drawback of using a low-cost provider strategy is

capturing volume gains and achieving economies of scale.

A portfolio business that generates operating cash flows over and above internal requirements, thereby providing financial resources that may be used to finance new acquisitions, fund share buyback programs, or pay dividends is commonly called a

cash cow.

Focusing carries several risks, one of which is the

chance that competitors will find effective ways to match the focused firm's capabilities in serving the target market.

Strategic alliances are more likely to be long lasting when they involve

collaboration with suppliers or distribution allies, or when both parties conclude that continued collaboration is in their mutual interests.

Strategic alliances are more likely to be long-lasting when they involve

collaboration with suppliers or distribution allies, or when both parties conclude that continued collaboration is in their mutual interests.

Strategic alliances are

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

An economy of scope is BEST illustrated by being able to eliminate or reduce costs by

combining related value-chain activities of different businesses into a single operation.

Successful broad differentiation allows a firm to

command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand.

The marketing emphasis of a company pursuing a focused low-cost provider strategy usually is to

communicate the attractive features of a budget-priced product offering that fits niche members' expectations.

Diversification ought to be considered when a

company is under pressure to create a more attractive and cost-efficient value chain.

Which structure combines two or more organizational forms, with multiple reporting relationships, and is used to foster cross-unit collaboration?

composite structure

A production-based emphasis toward a low-cost provider strategy usually requires a company to strive for

continuous cost reductions without sacrificing acceptable quality and essential features.

Microsoft's alliance with immuno-sequencing company Adaptive Biotechnologies can be called "strategic" because it serves all of the following strategic purposes except

contracts out certain value chain activities by both parties to outside vendors.

Once company managers have decided on a strategy, the emphasis turns to

converting the strategy into actions and good results.

Entering into strategic alliances and collaborative partnerships can be competitively valuable because

cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology.

Approaches to enhancing differentiation through changes in the value chain do not include

coordinating with employees to create a greater incentive system to encourage worker productivity.

What is the name of the process for developing new businesses as an outgrowth of a company's established business operations?

corporate venturing

The capabilities and core competencies that Zara has developed in the execution of its strategy, i.e. rapid production processes and new apparel introductions, are NOT concerned with

cost-effectively hiring a cadre of people with the right talent and expertise, putting them together in a single work group, and then teaming the work group with Zara's key strategic allies/partners to mesh the skills, expertise, and competencies needed to perform the desired capabilities with some proficiency.

Once a company has diversified into a collection of related or unrelated businesses and concludes that some strategy adjustments are needed, which one of the following is not one of the main strategy options that a company can pursue?

craft new initiatives designed to build/enhance the reputation and image of the company

Delegating greater authority to subordinate managers and employees

creates a more horizontal or flatter organizational structure with fewer management layers and usually acts to shorten organizational response times.

All the following are signals to would-be challengers that retaliation is likely except

creating collaborative relationships with other industry leaders to block new entrants.

Examples of important cost drivers in a company's value chain do not include

customer service.

A low-cost provider strategy can defeat a differentiation strategy when

customers are basically satisfied and don't think extra attributes are worth a higher price.

A multidivisional structure consists of a

decentralized structure with of a set of operating divisions organized along business, product, customer groups or geographic lines, and a central corporate headquarters that allocates resources, provides support functions, and monitors divisional activities.

What hurdles are present in calculating industry attractiveness scores?

deciding whether a business is related or unrelated

Organizing a company's work effort to promote successful strategy execution involves

deciding which value chain activities to perform in-house and which to outsource, and making internally performed strategy-critical value chain activities the main building blocks in the organization structure.

A decentralized organizational structure is predicated on the belief that

decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, and competent decisions.

When a company uses outsourcing to zero in on even better performance of those truly strategy-critical activities where its expertise is most needed, then it may also be able to

decrease internal bureaucracies, flatten its organizational structure, and shorten the time it takes to respond to changing market conditions.

The options for allocating a diversified company's financial resources include all of the following except

decreasing dividend payments and/or selling shares of stock.

The objective of a best-cost provider strategy is to

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

Greater task specialization is afforded by what form of organization?

departmental structures, unitary structures, or U-forms

Strategy execution

depends on management's ability to direct organizational change.

Imagine that you have been hired by Bill Newlands, President and COO of Constellation Brands (CB), to review the beverage company's diversified portfolio of businesses. Of the analytical tools that you could use to assess CB's business lineup for adequate resource fit, which one would you not be likely to use?

determining whether or not the opportunity exists for CB to achieve 1 + 1 = 2 outcomes among CB's portfolio of brands

On June 26, 2018, CEO John Flannery of General Electric Company (GE) announced that the company planned to spin off its healthcare business and divest its stake in oil-services firm Baker Hughes. The slimmed-down company would re-focus on jet engines, power plants and renewable energy. What was not an important consideration for CEO Flannery when evaluating the merits of this diversified company's new strategy?

determining which business units were cash cows and which ones were cash hogs, and then evaluating how soon GE's cash hogs could be transformed into cash cows

Organizing the work effort in ways that promote successful strategy execution is NOT likely to include

determining which functions and organizational units require superior intellectual capital

Samsung Group, which includes Samsung Electronics, successfully manages an ecosystem of over 1,300 partnerships that enable productive activities from global procurement to local marketing to collaborative R&D. Samsung Group's alliance management capability can be said to have

developed over time, out of effort and learning.

The capability building process entails

developing the ability to do something, however imperfectly or inefficiently, and molding these efforts into an organizational ability, and as experience grows and personnel perform the activity consistently well and at an acceptable cost, it is transformed into a tried-and-true competence and as they continue to polish and refine their know-how into further improvements, they then create a real competitive capability.

Backward vertical integration can produce a

differentiation-based competitive advantage when activities enhance the performance of the final product.

It becomes particularly urgent for a company to consider diversification when there are

diminishing market opportunities and stagnating sales in its principal business.

Best-cost provider strategies are appealing in those market situations where

diverse buyer preferences make product differentiation the norm and where a large number of value-conscious buyers can be induced to purchase mid-range products.

To create value for shareholders via diversification, a company must

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

One strategic fit-based approach to related diversification would be to

diversify into new industries that present opportunities to transfer specialized expertise, technological know-how, or other valuable resources and capabilities from one business's value chain to another's.

Strategies to restructure a diversified company's business lineup involve

divesting low-performing businesses that do not fit and acquiring new ones where opportunities are more promising to put a new face on the company's business makeup.

The most common approaches to capability building include all of the following, EXCEPT

divesting underperforming units.

The task of crafting a company's overall corporate strategy for a diversified company encompasses all of the following except

divesting well-performing businesses.

A sound justification for unrelated diversification is that

doing so can deliver enhanced shareholder value if an undervalued company can be purchased at a bargain price

Kjirstin is the general manager of Labcon USA, a diversified laboratory equipment design and manufacturing business with one major "core" business that accounts for 60 percent of the company's total worldwide revenues and the remainder, a collection of small related or unrelated businesses. She would define Labcon USA as a _________ enterprise.

dominant business

A decentralized organizational structure

draws on the combined intellectual capital of all its employees to outperform a command-and-control company.

You have been hired as a consultant by Mary Dillon, CEO of Ulta Beauty, a $5.9 billion company that is the largest U.S. retailer of cosmetics. CEO Dillon has asked you to consider several related diversification options for Ulta based on the potential for good resource fits. You would advise CEO Dillon that a company pursuing related diversification exhibits resource fit when

each new line of business for Ulta would add to a company's overall resource strengths and have matching resource requirements and/or could do so when Ulta has adequate corporate resources to support its business needs and add sufficient value.

Corporate parenting refers to all of the following except

efforts to judiciously segregate funds for each business in such a way that keeps the money safe and discourages shifting funds across business units.

Sometimes a company can short-circuit the task of building an organizational capability in-house by

either acquiring a company that has already developed the capability or else acquiring the desired capability through collaborative efforts with outsiders having the requisite skills, know-how, and expertise.

Managerial actions to develop core competencies and competitive capabilities internally generally take one of two forms. What are they?

either strengthening the company's base of skills, knowledge, and experience or coordinating and integrating the efforts of various work groups and departments

What are the two ways a company can translate its low-cost advantage over rivals into attractive profit performance?

either using its low-cost edge to underprice competitors and attract price-sensitive buyers in large enough numbers to increase total profits or refraining from price cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold

The production emphasis of a company pursuing a broad differentiation strategy usually involves

emphasis on building differentiating features that buyers are willing to pay for and includes wide selection and many product variations.

You are considering a career with Enterprise Holdings, parent of the Alamo, Enterprise, and National car rental companies. What facets of Enterprise's talent management strategy are NOT likely to be strategy-supportive?

employing people who have similar management styles, leadership approaches, business philosophies, and personalities.

Primary building blocks in a company's organizational structure do NOT include

empowered employee departments

Companies pursue closer coordination and collaboration with channel suppliers to better address customer needs in order to

enhance differentiation through the value chain system.

The potential advantages of Tesla's backward vertical integration strategy include

enhancement of Tesla's differentiation capabilities and perhaps achieving a differentiation-based competitive advantage.

Putting together a capable top management team with the right mix of experiences, skills, and abilities

entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what needs to be done, and who are skilled in "making it happen" and delivering good results.

Assessing the competitive advantage potential of cross-business strategic fit involves

evaluating how much benefit a diversified company can gain from cross-business value chain matchups and resource sharing.

What best-cost provider strategy would you be most unlikely to recommend for a small-sized company entering a highly segmented market, each segment with a complex set of needs and spending power?

evolving the capabilities to simultaneously deliver lower cost and higher-quality/differentiated features

An approach that is UNLIKELY to help a company's low-cost provider strategy succeed is

evolving the capabilities to simultaneously deliver lower cost and higher-quality/differentiated features.

Vertical integration does not involve

expanding a firm's range of product and service segments within its product or service market.

On July 27, 2018, shareholders of the Walt Disney Company and 21st Century Fox agreed to a $71.3 billion purchase plan that gave Disney the bulk of the Fox media empire, substantially altering the entertainment landscape. What was LEAST likely among Disney's considerations in completing its acquisition of Fox?

expanding into additional businesses that unlock possibilities for a comprehensive cost enhancement strategy.

In the face of strong competition from Amazon, Walmart's 2016 acquisition of Jet. com was driven by a strategic objective, such as

expanding its geographic coverage or extending its business into new product categories.

Strategic offensives should, as a general rule, be based on

exploiting a company's strongest competitive assets—its most valuable resources and capabilities.

Vertical integration strategies

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

A disadvantage of a simple structure reflects the

fact that the flat structure may be inadequate as the organization grows.

Vanguard, one of the world's largest investment management companies, has attained cost leadership via

ferreting out cost-saving opportunities in every part of the value chain.

A broad differentiation strategy generally produces the best results in situations where

few rival firms are following a similar differentiation approach.

Market circumstances that make a focused low-cost or focused differentiation strategy attractive are characterized by

few, if any, rivals are attempting to specialize in the same target segment.

Imagine that you are about to become the manager of a local chain consisting of four upscale restaurants. To prepare for the position, you have been reviewing the 10 managerial tasks of successful strategy execution. What would NOT be among those tasks?

focusing on how market conditions impact your restaurant chain's resources and capabilities.

Strategic fit between two or more businesses exists when one or more activities comprising their respective value chains present opportunities

for cross-business collaboration to build valuable new resource strengths and competitive capabilities.

If management is to match a company's organization structure to its strategy in an effective way, then it is essential

for strategy-critical value chain activities to be the main building blocks on the organization chart.

If management is to match a company's organization structure to its strategy in an effective way, then it is essential

for strategy-critical value-chain activities to be the main building blocks on the organization chart.

When Disney acquired Marvel Comics on August 31, 2009, for $4.24 billion, management needed to determine whether or not there were opportunities to strengthen the business, which includes all of the following considerations, except

forcing cultural independence, operating diversity, and sophisticated analytical responsibility on the businesses to ensure compatibility with the corporate overhead identity.

Diversified companies striving to capture the benefits of synergy between separate businesses have to be aware of all of the following challenges EXCEPT

forming cross-business strategic fit by enforcing close collaboration.

Mergers and acquisitions

frequently do not produce the hoped-for outcomes.

The strategic impetus for forward vertical integration is to

gain better access to end users and better market visibility.

The strategic impetus for Tesla's forward vertical integration into dealerships and charging stations is

gaining better access to Tesla's end users and better market visibility.

A "cash hog" type of business

generates cash flows that are too small to fully fund its operations and growth.

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to

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.

Trader Joe's biggest vulnerability in employing a best-cost provider strategy is

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

Market conditions and factors that tend not to favor first movers include

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.

Superior strategy execution capabilities are

hard to imitate.

Unrelated businesses

have dissimilar value chains and resource requirements with no competitively important cross-business commonalities at the value chain level.

An example of how companies can revamp their value chain to reduce costs is to

have suppliers locate their plants close to companies' own facilities.

Combination related-unrelated diversification strategies have particular appeal for companies

having a mix of valuable competitive assets, covering the spectrum from generalized to special resources and capabilities.

Coordinating the work efforts of internal organization units is best accomplished by

having closely related activities report to a single executive who has the authority and organizational clout to coordinate, integrate, and arrange for the cooperation of units under their supervision.

For all types of generic strategies, a company's success in sustaining its competitive edge depends on

having resources and capabilities that rivals have trouble duplicating and for which there are no good substitutes.

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships to

help master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry.

The five generic competitive strategies are not characterized by a_________ strategy.

high-cost

The big risk of employing an outsourcing strategy is

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.

The organizing challenge of a decentralized structure that stresses employee empowerment is

how to exercise control over the actions and decisions of empowered employees so that the business is not put at risk while trying to capture the benefits of empowerment.

Management's handling of the strategy implementation/execution process can be considered successful

if and when the company meets or beats its performance targets and shows good progress in achieving its strategic vision for the company.

The strategy execution process normally does not involve

implementing a management development plan to groom future executives.

It is ideal for key management slots to be filled from outside

in turnaround and rapid-growth situations.

Businesses with strategic fit with respect to their supply chain activities perform better together because of all of the following except the

increased allocation and allotment of support activities and specialized resources and capabilities.

Brands create customer loyalty, which in turn

increases the perceived cost of switching to another product.

The strategic options to improve a diversified company's overall performance do not include which of the following categories of actions?

increasing dividend payments to shareholders and/or repurchasing shares of the company's stock

The purposes of a defensive strategy do not include

increasing the risk of having to defend an attack.

The businesses in a diversified company's lineup exhibit good resource fit when

individual businesses have matching resource requirements at points along their value chain and add to a company's overall resource strengths and when solid parenting capabilities exist without spreading itself too thin.

The principal offensive strategy options include all of the following except

initiating a market threat and counterattack simultaneously to effect a distraction.

What is it called when a diversified company can add value by shifting capital from business units generating free cash flow to those needing additional capital to expand and realize their growth potential?

internal capital market

How is a functional structure or unitary structure organized?

into functional departments, with departmental managers who report to the CEO and small corporate staff

Companies that depend upon and highly value the contribution of intellectual capital to good strategy execution, generally do NOT

invest time and money into coaching underperformers and benchwarmers to improve their skills and capabilities.

Deploying a diversified company's financial resources would normally not involve

investing financial resources in cash cow businesses until they show enough strength to generate positive cash flows.

The most common building blocks for a company's organizational structure

involve a functional or departmental structure that includes process, geographic, product, or customer groups performing one or more major processing steps along the value chain.

Outsourcing strategies

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

Corporate restructuring strategies

involve making major changes in a diversified company's business lineup, divesting some businesses and/or acquiring others, so as to put a whole new face on the company's business lineup.

A blue-ocean strategy

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.

An outsourcing strategy

involves farming out certain value chain activities presently performed in-house to outside vendors.

A hit-and-run or guerrilla warfare type offensive strategy

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

An umbrella brand

is a generalized resource that can be leveraged in unrelated diversification.

Implementing and executing a company's strategy

is a task for every manager and the whole management team, but ultimate responsibility for success or failure falls upon the top senior executives, especially the chief executive officer of the company.

A diversified company has a parenting advantage when it

is more able than other companies to boost the combined performance of its individual businesses through its high-level guidance, general oversight, and other corporate-level contributions.

The nine-cell industry attractiveness competitive strength matrix

is useful for helping decide which businesses should have high, average, and low priorities in deploying corporate resources.

All other things being equal, the "best" generic competitive strategy for a company to employ is a strategy that

is well matched to a company's internal situation; underpinned by an appropriate set of resources, know-how, and competitive capabilities; and difficult for rivals to match.

The competitive advantage of a best-cost provider like Trader Joe's is

its capability to incorporate upscale or attractive attributes into its product offerings at lower costs than rivals.

For a diversified company to be a strong performer

its principal business must be in industries with a good outlook for growth and above-average profitability.

Daimler's 2017 agreement with automotive supplier Robert Bosch GmbH to develop self-driving taxis that customers can hail with a smartphone app is called a

joint venture.

A company must do all of the following to match structure to strategy EXCEPT

knit the efforts of outsourced groups together.

A primary disadvantage of a centralized organizational structure is that it results in

lengthening response times and discouraging lower-level managers and rank-and-file employees from exercising initiative.

For an unrelated diversification strategy to produce financial results above that of stand-alone entities, executives must do all of the following except

leverage the cross-business strategic fit advantage effectively.

Which strategic approach works best when price competition among rival sellers is vigorous, the market is large, and there are few ways to achieve product differentiation?

low-cost provider strategy

The generic types of competitive strategies include

low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation strategies.

The primary objective of deploying a defensive strategy is to

lower the risk of being attacked, to weaken the impact of any attack that occurs, and to influence challengers to aim their efforts at other rivals.

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by

maintaining the present price and using the lower-cost edge to earn a higher profit margin on each unit sold.

The best targets for offensive-minded firms to challenge are

market leaders that are vulnerable.

For every emerging opportunity, there exists a(n)

market penetration curve, and this typically has an inflection point where the business model falls into place.

Tinder's first-mover strategic thrust into the online dating industry resulted in a high payoff in all of the following except

market uncertainties made it difficult for Tinder's founding team to ascertain whether or not the dating app would eventually succeed.

Merger and acquisition strategies

may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.

A low-cost leader's basis for competitive advantage is

meaningful lower overall costs than rivals on comparable products.

The competitive objective of a best-cost provider strategy is to

meet or exceed buyer expectations on key quality/performance/features/service attributes and beat their expectations on price (given what rivals are charging for much the same attributes).

Carlos, the CEO of a local HR recruiting and staffing company, is considering a strategic alliance with a local payroll company. What would not likely be a consideration for Carlos with respect to whether the proposed alliance could become successful and realize its intended benefits?

minimizing the amount of resources that the partners commit to the alliance

Maria, the owner/CEO of a local HR recruiting and staffing company, is considering a strategic alliance with Patricia, the owner/CEO of a local payroll company. What would not likely be a consideration for Maria and Patricia with respect to whether the proposed alliance could become successful and realize its intended benefits?

minimizing the amount of resources that the partners commit to the alliance

A primary reason why mergers and acquisitions sometimes fail is due to the

misinterpretation of the cultural differences, like employee disenchantment and low morale, differences in management styles and operating procedures, and operations integration decision mistakes.

Larger firms with more complex organizational structures are

more decentralized in their decision-making than smaller firms.

Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether

most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation.

A competitive strategy of striving to be the low-cost provider is particularly attractive when

most buyers use the product in much the same ways, with user requirements calling for a standardized product.

An organizational structure that is common among companies pursuing some form of diversification strategy or global strategy is called a _________ structure.

multidivisional

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company

must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality.

Outsourcing strategies can offer such advantages as

obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.

The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to

offer better goods at attractive prices.

The objective of differentiation is to

offer customers something rivals can't, at least in terms of the level of satisfaction.

The essence of a broad differentiation strategy is to

offer unique product attributes in ways that are valuable and appealing and that buyers consider the cost worth it.

A focused differentiation strategy aims at securing competitive advantage by

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

A big advantage of related diversification is that it

offers ways for a firm to realize 1 + 1 = 3 benefits because the value chains of the different businesses present competitively valuable cross-business relationships.

A differentiation-based competitive advantage

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.

A dynamic capability is the

ongoing capacity to modify existing resources and capabilities to create new ones.

Imagine that you are a senior executive of a large organization such as Starbucks that has geographically scattered operating units. What would NOT be on your agenda?

orchestrating the action steps and implementation sequence

The worst targets for an offensive-minded company to target are

other offensive-minded companies that possess a sizable war chest of cash and marketable securities.

When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy), the other main avenue to competitive advantage is to

out-execute them (beat them by performing certain value chain activities in superior fashion).

Southwest Airlines' low-cost advantage results primarily from its ability to

outdo its rivals in performing value chain activities cost efficiently.

A drink manufacturer finds setting up a plant to make its own bottle caps expensive and technically difficult. Which of the following will be most helpful in solving the manufacturer's problem?

outsourcing

Actions that a company should take to perform value chain activities more cost-effectively ordinarily will not be concerned with

over-differentiating so that product features exceed the needs of most buyers.

Of the following strategic fit opportunities, which choice is not supportive of related business activities?

overhauling and streamlining the operations of the business by refocusing value chain activities toward businesses that can provide a superior job of parenting

The primary activities involved in building an organization's strategy-supportive resources, capabilities, and organizational structure are NOT concerned with

overseeing all strategic activities including: related and unrelated diversification, internal business development, joint ventures and alliances, mergers and acquisitions, modes of entry into international markets, ethics training and sustainability programs, and relationships with key stakeholders.

The big dilemma an acquisition-minded firm faces is whether to

pay a premium price for a successful company or buy a struggling company at a bargain price.

Once a company has decided to employ a particular generic competitive strategy, then it must make the following additional strategic choices, except whether to

pay special attention to buyer segments that a rival is already serving.

What makes the managerial task of executing strategy so challenging and demanding is the

people-management skills required, the resistance to change that has to be overcome, and the perseverance necessary to get a variety of initiatives launched and kept moving along.

Whatever strategic approach is adopted by a company to deliver value, it nearly always requires

performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match.

The major avenues for achieving a cost advantage over rivals include

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.

The one factor that company executives need not worry about when their company is managing many diverse, unrelated firms is to

pick business-unit heads having the requisite combination of managerial skills and know-how to motivate people.

When strategies fail, it is often because of

poor execution of the strategy.

The risks of a focused strategy for a company like Canada Goose are the

potential for the preferences and needs of niche members to shift over time toward product attributes desired by buyers in the mainstream portion of the market.

Compared to vertical integration or horizontal mergers/acquisitions strategies, the principal advantages of joint venture partnerships and alliances include

potential resource pooling and risk sharing, more adaptive response capabilities, and greater speed of deployment.

In April 2017, PetSmart agreed to make the largest e-commerce acquisition in history to date, putting a deal in place to snatch up fast-growing pet food and product site Chewy. com for $3.35 billion. The acquisition premium for this particular deal can be calculated as the amount by which the price PetSmart offered for Chewy.com exceeded the

preacquisition market value of Chewy.com.

The better-off test for evaluating whether a particular diversification move is likely to generate added value for shareholders involves assessing whether the move will

produce a synergistic outcome such that the company's different businesses perform better together than apart and the whole ends up being greater than the sum of the parts.

A broad differentiation strategy is generally not suitable for attaining a competitive advantage when

products of rivals are weakly differentiated.

Accessing capabilities through an external source can be accomplished through all of these EXCEPT

promoting qualified people with the right know-how in a timely and cost-effective manner.

Companies are UNLIKELY to use outsourcing to improve performance of strategy-critical activities when they are engaged in

promoting quick establishment of a total quality culture.

The chief purpose of calculating quantitative industry attractiveness scores for each industry a company has diversified into is to

provide a basis for drawing analysis-based conclusions about the attractiveness of the industries a company has diversified into, both individually and as a group, and further to provide an indication of which industries offer the best and worst long-term prospects.

The objective of a competitive strategy is to

provide buyers superior value relative to the offerings of rival sellers in order to attain a competitive advantage.

A signal that would not warn challengers that strong retaliation is likely is

publicly announcing strong quarterly earnings potential to financial analysts.

Deloitte's successful execution of its talent management strategy does NOT involve

punishment for missed deadlines, misdirected or wasteful efforts, and managerial ineptness.

Companies like Amazon, Apple, Facebook, and Google employ all but ONE of the following offensive actions to complement and supplement the choice of one of the five generic competitive strategies. Which is not an example of an offensive move?

pursuing a market share leadership strategy

By cutting back operations to match areas of declining demand and moving some operations overseas, Hewlett-Packard anticipates a reduction in costs of more than $2 billion. But despite having made significant progress toward being a smaller, more nimble company, significant challenges in returning to profitability still remain. Hewlett-Packard is a good example of

pursuing a strategy of corporate restructuring

Corporate strategy options for already diversified companies include all of the following except

pursuing certain acquisitions even if they have done badly or haven't quite lived up to expectations.

Bumble, a digital dating site where women make the first move, specifically uses which strategic weapon in its offensive arsenal?

pursuing disruptive product innovations to create new markets

The concept of blue-ocean strategies does not refer to

pursuing offensive strategies that involve a preemptive strike to secure an advantageous position in a mature market segment.

Management's ranking of business units and establishing a priority for resource allocation should

put business units with the brightest profit and growth prospects and solid strategic and resource fits at the top of the investment priority list.

An initial step that companies typically take in launching the strategy execution process is often to

put together a talented management team with the right mix of experiences, skills, and abilities to get things done.

Being the overall low-cost provider in an industry has the attractive advantage of

putting a firm in the best position to win the business of price-sensitive customers and earn profits by setting the floor on market price.

Practices companies use to recruit, train, and retrain the most capable people they can find involve all of the following except

putting employees through short-term training programs, but focusing on the top 10 percent and providing them with challenging, interesting, and skill-stretching assignments.

The major disadvantage of a decentralized organizational structure is that it can result in

putting the organization at risk if higher-level management is unaware of their actions.

Good strategy execution requires which of the following?

putting those resources and capabilities into place, strengthening them as needed, and then modifying them as market conditions evolve

Corporate restructuring strategies

radically alter the business lineup by divesting poor performers and acquiring new promising businesses.

Horizontal scope refers to the

range of product and service segments that a firm can serve within its focal market.

First-mover advantages are unlikely to be present when

rapid market evolution (due to fast-paced changes in technology or buyer preferences) presents opportunities to leapfrog a first-mover's products with more attractive next-version products.

The value of determining the relative competitive strength of each business a company has diversified into is to have a quantitative basis for

rating them from strongest to weakest in contending for market leadership in their respective industries.

Recruiting and retaining capable employees does NOT entail

recruiting and retaining capable employees, which is usually much more important to good strategy execution and the achievement of true operating excellence than is assembling a capable top management team.

The principal advantage of a decentralized organizational structure is that it can

reduce the layers of management and encourage lower-level managers and rank-and-file employees to exercise initiative and act responsibly.

Relying on outsiders to perform certain value chain activities offers such strategic advantages as

reducing the company's risk exposure to changing technology and/or changing buyer preferences.

Initiating actions to boost the combined performance of the corporation's collection of businesses includes all of the following strategic options, except

refocusing the existing businesses on new substitute product-line opportunities outside the existing industry framework.

A company that fails to manage its strategic alliance probably has

refrained from making commitments to its partners and ensured they do the same.

Bypassing regular wholesale/retail channels in favor of direct sales and Internet retailing can have appeal if it

reinforces the brand, enhances consumer satisfaction, and results in lower prices to end users.

Assessments of how a diversified company's subsidiaries compare in competitive strength should be based on such factors as

relative market share, the ability to match or beat rivals on key product attributes, brand image and reputation, costs relative to competitors, and the ability to benefit from strategic fits with sister businesses.

The hallmarks of Tesla's vertical integration strategy do not include

research and development and rapid deployments of Tesla's control integration systems (creating control factors across its entire value chain).

The principal advantages of strategic alliances over vertical integration or horizontal mergers/acquisitions are

resource pooling and risk sharing, more adaptive response capabilities, and greater speed of deployment.

For a best-cost provider strategy to be successful, a company must have

resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes.

A disadvantage of the centralized organization is that it

results in higher-level managers being unaware of actions taken by empowered personnel under their supervision.

Moves to improve a diversified company's overall performance do not include

retaining weak-performing businesses in order to sustain a wide base of business operations.

Successful execution of Deloitte's talent management strategy included all of the following elements except

sanctions placed on employees for missed deadlines, misdirected or wasteful efforts, or managerial ineptness.

The traits of the capability-building process involve all of the following EXCEPT

saving time by creating capabilities from scratch to remain aligned with external conditions and company strategy rather than updating and remodeling existing capabilities.

A focused low-cost strategy based on low cost aims at

securing a competitive advantage by serving buyers in the target market niche at a lower cost than those of rival competitors.

Hilton Hotels has diversified its lodging brands by adding Curio Collection, Tapestry Collection, and Canopy by Hilton, properties that offer stylish, distinctive decors and personalized services that appeal to young professionals seeking distinctive lodging alternatives. Managers can enhance the differentiation of these new brands based on all of the following value drivers except

seeking out low-quality inputs.

Hilton Hotels has diversified its lodging brands by adding Curio Collection, Tapestry Collection, and Canopy by Hilton, properties that offer stylish, distinctive decors and personalized services that appeal to young professionals seeking distinctive lodging alternatives. Managers can enhance the differentiation of these new brands based on all of these value drivers except

seeking out low-quality inputs.

A firm pursuing a best-cost provider strategy

seeks to deliver superior value to buyers by satisfying their expectations on key attributes and beating rivals in meeting customer expectations on price.

Calculating quantitative attractiveness ratings for the industries a company has diversified into involves

selecting a set of industry attractiveness measures, weighting the importance of each measure, rating each industry on each attractiveness measure, multiplying the industry ratings by the assigned weight to obtain a weighted rating, adding the weighted ratings for each industry to obtain an overall industry attractiveness score, and using the overall industry attractiveness scores to interpret the attractiveness of all the industries, both individually and as a group.

The decision to pursue diversification requires management to resolve which industries to enter and whether to enter, and includes such decisions as the following, except

selecting the appropriate value chain operating practices to improve the financial outlook.

Achieving a sure-cost advantage over rivals entails

selling a mostly standard product and increasing the scale of operation.

The approach to identifying the items needed to be placed on management's action agenda of the strategy execution plan always involves

senior management's judgment about how to proceed in light of prevailing circumstances.

Which of the following is not a route to achieving a differentiation-based competitive advantage?

separating marketing from brand-building activities

A focused low-cost strategy seeks to achieve competitive advantage by

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

A major advantage afforded by a low-cost provider strategy is

setting the industry's price ceiling to capture volume gains and achieve economies of scale.

Outsourcing value chain activities has such strategy executing advantages as

shrinking internal bureaucracies, decreasing delays in decision-making, and accelerating responses to changing market conditions.

A healthy fast-casual restaurant that offers only vegetarian and vegan meals insists on portraying organic ingredients in its advertisements, charges a higher price for its meals, and has a rigorous quality control process to insure the cleanliness of its facilities. What strategy is the manufacturer using to deliver superior value to customers?

signaling value by targeting sophisticated buyers

The major difference between a low-cost provider strategy and a focused low-cost strategy is the

size of the buyer group to which a company is appealing.

The culture of a company can be a cost-efficient value chain activity because it can

spur worker pride in productivity and continuous improvement.

Facebook has hired you to manage its launch team for its new dating app. What would be the highest priority on your list of activities to ensure a successful launch and implementation of this new app?

staffing the organization, acquiring, developing, and strengthening key resources and competitive capabilities, and structuring the organization and work effort.

The three components of building a capable organization are

staffing the organization, acquiring, developing, and strengthening key resources and competitive capabilities, and structuring the organization and work effort.

Building an organization capable of good strategy execution entails

staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.

The three components of building a capable organization are

staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort.

A formal agreement, or _________, is between two or more separate companies in which they agree to work cooperatively toward some common objective.

strategic alliance

If management is to match a company's organization structure to its strategy in an effective way, then it is essential that

strategy-critical value-chain activities form the main building blocks of the organization chart.

The two most compelling reasons for a company to pursue vertical integration (either forward or backward) are to

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

The keys to maintaining a broad differentiation strategy are to

stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features.

Claire is establishing lines of authority and reporting relationships within the finance department in her company. Which of the following organization-building actions is Claire undertaking?

structuring the organization and work effort

Should a company pursue an unrelated diversification strategy, the types of companies that make particularly attractive acquisition targets would be

struggling companies with good turnaround potential, undervalued companies that can be acquired at a bargain price, and companies that have bright growth prospects but are short on investment capital.

A company attempting to be successful with a broad differentiation strategy has to

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.

Samsung Group's ecosystem of over 1,300 partnerships that enable productive activities, from global procurement to local marketing to collaborative R&D, is considered to have been

successful in creating strategic alliances.

A fast-food restaurant stocks bread, meat, sauces, and other main ingredients, but does not assemble and cook its burgers and sandwiches until a customer places an order. Which cost driver is the restaurant efficiently using to cut costs?

supply chain efficiencies

A differentiation strategy works best when

technological change is fast-paced and competition revolves around rapidly evolving product features.

Broad differentiation strategies generally work best in market situations where

technological change is fast-paced and competition revolves around rapidly evolving product features.

Indra Nooyi is CEO of PepsiCo, a diversified consumer products company. What does a competitive strength score above 5 tell her about PepsiCo's position in the market?

that PepsiCo's business units are all fairly strong market contenders in their respective industries

One of the most significant contributions to strategy making in diversified companies that the nine-cell industry attractiveness competitive strength matrix provides is

that businesses having the greatest competitive strength and that are positioned in the most attractive industries should have the highest priority for corporate resource allocation and that competitively weak businesses in relatively unattractive industries should have the lowest priority and perhaps even be considered for divestiture.

The major benefit of a related diversification strategy is

that it offers potential 1 + 1 = 3 or "synergy" benefits because of valuable cross-business relationships among the value chains of the corporation's different businesses.

The two big drivers of outsourcing are

that outsiders can often perform certain activities better or more cheaply, and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies).

One of the big weaknesses of organization structures that do not have cross-business collaboration is

that pieces of strategically relevant activities and capabilities often end up scattered across many departments, with each pursuing its own priorities, projects, and agendas.

The big danger or risk of a best-cost provider strategy is

that rivals with low-cost provider strategies will be able to steal away some customers on the basis of a lower price, and high-end differentiators will be able to steal away customers with the appeal of better product attributes.

A network structure consists of

the arrangement of linking several independent organizations involved in some common undertaking, with one firm typically in a more central role.

For a backward vertical integration strategy into the business of suppliers to be viable and profitable, a company must possess

the capability to achieve the same scale economies as outside suppliers and also match or beat suppliers' production efficiency with no drop in quality.

The two best signs of good strategy execution are whether

the company is meeting or beating its performance targets and whether it is performing value chain activities in a manner that is conducive to companywide operating excellence.

The tests of whether a diversified company's businesses exhibit resource fit do not include whether

the corporate parent has sufficient cash to fund the needs of its individual businesses and pay dividends to shareholders without having to borrow money.

Conditions that create first-mover advantages include all of the following except

the costs of pioneering are high relative to the benefits accrued.

The two biggest drawbacks or disadvantages of unrelated diversification are

the demanding managerial requirements and the limited competitive advantage potential due to lack of cross-business strategic fit benefits.

The difference between a merger and an acquisition relates to

the details of ownership, management control, and the financial arrangements.

The two biggest drawbacks or disadvantages of unrelated diversification are

the difficulties of competently managing many different businesses and being without the added source of competitive advantage that cross-business strategic fit provides.

Implementing and executing strategy successfully requires

the efforts of a company's whole management team, not just a few senior managers.

A strategy of vertical integration can have substantial drawbacks, including

the environmental costs of coordinating operations across vertical chain activities.

A firm's organizational structure is comprised of

the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered.

In the process of evaluating the attractiveness of a multibusiness (diversified) company's business lineup, an analyst would generally not consider

the frequency with which strategic alliances and collaborative partnerships are used in each industry, and the extent to which firms in the industry utilize outsourcing

A broad differentiation strategy improves profitability when

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

Coca-Cola's August 2018 move to acquire Costa Coffee, an international coffee chain, meant that the acquired company had to first pass which three Tests of Corporate Advantage?

the industry attractiveness test, the cost-of-entry test, and the better-off (synergy) test

When calculating the weighted industry attractiveness scores, we find the more intensely competitive an industry is

the lower the attractiveness weighting for that industry.

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when

the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first mover.

Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where

the market is composed of distinctly different buyer groups who have different needs or use the product in different ways.

First-mover disadvantages (or late-mover advantages) rarely arise when

the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when

the offerings of rival firms are essentially identical, standardized, commodity-like products.

What makes related diversification an attractive strategy?

the opportunity to convert cross-business strategic fit into competitive advantage over business rivals whose operations don't offer comparable strategic fit benefits

Focusing the ability can secure a competitive edge but also carries some risks that could be detrimental to the focused firm, such as

the potential for the preferences and needs of niche members to shift over time toward mainstream provider product attributes.

The transaction costs of completing a business agreement or deal of some sort, over and above the price of the deal, can include all of the following except

the premium cost.

What does the scope of the firm refer to?

the range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses

As a rule, the key indicators of industry attractiveness, for all the industries represented in a diversified company's business portfolio, should not be measured on such attractiveness factors as

the utility of the products for consumers from all age groups.

Cross-business strategic fit in a diversified enterprise is not normally achieved when

the value chain activities of unrelated businesses possess economies of scope and good financial fit.

A weighted industry attractiveness assessment is generally analytically superior to an unweighted assessment because

the various measures of attractiveness are not likely to be equally important in determining overall attractiveness.

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is

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

The essential requirement for different businesses to be "related" is that

their value chains exhibit competitively valuable cross-business commonalities.

Broad differentiation strategies are well-suited for market circumstances where

there are many ways to differentiate the product or service that has value to buyers.

The rationale for making strategy-critical value chain activities the primary building blocks in a company's organizational scheme is based on the

thesis that if activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact, they have to be centerpieces in the organizational scheme.

What are the principal managerial components of the strategy execution process developed by Zara, the world's largest fashion retail chain?

tightly aligning design, production, advertising, and real estate with the overall strategy of fast fashion

Because the timing of a strategic move can be just as important as the choice of move to make, a company's best option with respect to timing of an action is

to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.

Checking the competitive advantage potential of cross-business strategic fits in a diversified company involves evaluating the extent to which sister businesses present opportunities

to create a positive image in the industry irrespective of the financial performance of its businesses.

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack?

to dissuade challengers from attacking or diverting them into using less-threatening options

What might not be considered as a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products?

to enable greater opportunities for employee advancement

A strategic objective that is highly UNLIKELY to drive a mergers and acquisition strategy is

to facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy.

A strategic disadvantage of vertical integration is

to impair a company's flexibility in accommodating shifting buyer preferences.

Which of the following rationales for pursuing unrelated diversification is likely to increase shareholder value?

to restructure an underperforming business

Although ultimate responsibility for implementing and executing strategy falls upon the shoulders of senior executives,

top-level managers still have to rely on the active support and cooperation of middle and lower-level managers in pushing needed changes in functional areas and operating units.

The marketing emphasis of a company pursuing a broad differentiation strategy usually is to

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

To fend off a competitive attack, defensive-minded companies

use innovation and intellectual property protection to obtain product line exclusivity to force competitors to use other distributors.

What is the primary target market for a best-cost provider?

value-conscious buyers

The strategic target of a best-cost provider is

value-conscious buyers in a middle-market range.

The target market of a best-cost provider is

value-conscious buyers.

A government oil company is having trouble with the private refineries and transporters to whom it delegates important stages of production. It decides to become more active along the entire supply chain from locating deposits to retailing the fuel to consumers. Which of the following does it intend to achieve?

vertical integration

The extent to which a firm engages in the various value chain activities, from initial activities all the way to after-sales activities, is called

vertical scope.

The drawbacks of an unrelated diversification strategy include

very demanding managerial requirements and limited competitive advantage potential.

How can a capital-intensive company achieve a cost advantage by revamping its value chain?

via higher rates of capacity utilization to allow depreciation and other fixed costs to be spread over a larger unit volume, thereby lowering fixed costs per unit

Practices that the most successful companies like Alphabet, Boston Consulting Group, Edward Jones, Deloitte, Facebook, Genentech, Intuit, and Salesforce.com use to hire the best people they can find do NOT include

weeding out the 20 percent lowest-performing employees each year.

When are capabilities-motivated acquisitions essential?

when industry conditions, like technology advances, are central to growth and rivalry is intense

When is outsourcing not beneficial?

when internal control over an activity is deemed essential

Being a first mover is not particularly advantageous under which circumstance?

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

When should a business not be divested?

when the business is a cash cow

Imagine that you are the CEO of a multinational corporate consumer food company. What would make it attractive to you to consider related diversification via acquisition, rather than unrelated diversification into a new industry, such by forming an internal startup subsidiary to enter and compete in the target industry?

when the incumbent industry enables your company to create strategic fits with the acquired firm to exploit cross-business value chain activities and resource similarities that could lead to more efficient production, distribution, and sale of profitable processed food products

Tanisha is CEO of a multinational corporate event planning firm. What would make it unappealing to her to consider diversification into a new industry such as lodging by forming an internal startup subsidiary to enter and compete in the target industry?

when the industry is growing rapidly and the target industry is comprised of several relatively large and well-established firms

The biggest and most important differences among the competitive strategies of different companies boil down to

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

While there are many routes to competitive advantage, the two biggest factors that distinguish one competitive strategy from another are

whether a company's target market is broad or narrow and whether the company is pursuing a low-cost or differentiation strategy.

Unrelated diversification requires that company managers spend much time and effort screening acquisition candidates using all of the following criteria except

whether the business has a cross-business strategic fit.

When assembling a capable management team, the most important consideration is to recruit people

who are clear thinkers, are capable of figuring out what needs to be done, are good at managing people, and are skilled in delivering good results.

A generic strategy to become an industry's overall low-cost provider would not be particularly well-matched to a customer-market characterized by

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

Procter & Gamble's acquisition of Gillette was integral to a corporate diversification strategy for building the company around businesses

with strategic fit with respect to key value chain activities and competitive assets.