4950 Ch 1 Strategic Management

Which of the following statements is true of customer-oriented visions?

Customer-oriented vision statements are not the same as listening to your customer.

A good strategy is a set of actions that enables a firm to achieve its own internal goals without regard to the external environment.

False

Soil and Sod Gardening Supplies has a vision of helping every American learn how to grow their own food. Its management team recently unveiled the mission statement "A garden at every home." What is wrong with this mission statement?

It does not indicate how the company will accomplish its goals.

Which of the following statements about product-oriented visions is true?

They tend to force managers to take a myopic view of the competitive landscape.

A vision describes in broad, inspirational terms what an organization hopes to accomplish in the future

True

A firm always has a competitive disadvantage when its return on invested capital is

below the industry average

The first step to gain and sustain a competitive advantage is to

define a firm's vision, mission, and values.

Green Jeans, Inc. had a mission to become the leading producer of environmentally friendly blue jeans, an emerging and in-demand category in the apparel industry. Its strategy involved leveraging a network of organic cotton farmers and suppliers of environmentally responsible synthetic materials to create a product that is durable, attractive, affordable, and 100% recyclable. However, because it did not upgrade its outdated production facilities, Green Jeans could not assemble its products at a low-enough cost to offer the jeans at a price that was attractive to customers. Green Jeans' strategy failed because

it was not backed up with strategic commitments.

Which of the following strategies does Tesla need to implement or achieve to gain a competitive advantage?

reinvest profits to build successively better electric automobiles

Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments?

strategy analysis

Visionary companies are able to outperform their competitors because

they provide more aspirational visions.

Which of the following summarizes the difference between a firm's vision and mission?

A vision states what a firm wants to accomplish; a mission states how a firm plans to accomplish this vision.

Fuentes Electronics is a major manufacturer of microwave ovens. Which of the following statements will best inspire the organization with a shared vision for Fuentes Electronics?

At Fuentes Electronics, employees at all levels are motivated to make the best microwave ovens on the market.

As the strategic manager of CutRite Scissors, you are tasked with producing a strategy for introducing a new line of premium scissors. Your competitor produces a line of similar scissors at a cost of $1 and sells them for $12. Because your company has inferior production capabilities, your scissors will cost $3 each to produce. However, your handle is proven to be more comfortable than your competitors'. Assuming you are guaranteed to sell the same number of units as your competitor, which of the following strategies is most likely to achieve a competitive advantage?

Market CutRite scissors as a higher-quality alternative and sell them for $15.

Which of the following provides an example of what AFI strategy framework is used for?

Using AFI, the Gasquet Motor Company was able to implement a strategy that produced high-quality cars more efficiently and thereby reduced costs.

If Zephyr Electronics obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies?

comparing the return to the return on invested capital obtained by other firms in the industry

Mainline Ltd. is a landline telephone manufacturer whose average return on invested capital is approximately 2 percent. Because demand for landline telephones has declined significantly, the industry average return on invested capital has been negative (-5 percent) for the last few years. In this scenario, Mainline Ltd. has

competitive advantage

What part of the AFI strategy framework does the question "How does the firm make money?" relate to?

competitive advantage, firm performance, and business models

Managers use the AFI strategy framework to

explain and predict differences in firm performance.

If a company wants to gain a competitive advantage in a highly competitive industry, it should ideally

stake out a unique position within the industry.