Chapter 1: Strategy, Business Models, and Competitive Advantage

Which of the following statements about a company's realized strategy is true?

A company's realized strategy is typically a blend of deliberate and/or planned initiatives and emergent and/or unplanned reactive strategy elements.

Amy's Drive-Thru, a fast food facility near a college campus, offers healthy, sustainably grown vegetarian and vegan fast-food at higher prices than its competitors in the market and has a drive-through and indoor-seated, casual-dining operation. What strategy is Amy's Drive-Thru using to gain a competitive advantage?

A focused differentiation strategy

Rainbow Resorts Inc. has multiple tropical resorts in various locations. In a crowded market that caters to all kinds of consumers, this resort caters mainly to LGBTQ customers with a guaranteed hassle-free holiday experience at a premium price. What strategy is Rainbow using to gain competitive advantage?

A focused differentiation strategy

Which of the following firms uses an emergent strategy?

A microbrewer invests in building community water wells during a drought.

To which of the following firms is the term "repeatedly evolving strategy" most applicable?

A mobile company, established in a saturated market, that aims at a quarterly release of new products

Which of the following is an issue not likely to be addressed by a company's business strategy?

Actions and approaches to mimic rivals' moves in the marketplace

Which of the following is not an element of a company's business strategy?

Actions to revise the company's financial and strategic performance targets

A luxury hot-tub manufacturer offered monogrammed bathrobes as a gimmick when their hot tubs did not sell. Their monogrammed bathrobes became famous among some women and led to a line of exclusive bath products for women. The bathtub manufacturer established shops in various regional locations and hired celebrities to market their products to enhance sales. Today, its products are sold through retail outlets and online sites throughout the world. Which of the following is accurate?

Creating a subbrand that offered exclusive bath products for women was an emergent strategy.

Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

Simply trying to mimic the successful strategies of rivals

Which of the following questions ought to be used to distinguish a winning strategy from a so-so or flawed strategy?

Is the strategy well matched to the company's situation, helping the company achieve a sustainable competitive advantage and resulting in better company performance?

A pharmaceutical giant acquires a manufacturer of rare specialty drugs to improve its falling share prices and invests all its wealth into the deal. Due to a deficit, it agrees to do a joint venture for the acquisition and involves a major automobile giant to fund the deal. After a rocky start, the companies now have a strong market position and generate good profits. Which of the following regarding the company's strategy is true?

It is a winning strategy.

Which of the following is not something a company's strategy is concerned with?

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

Which of the following is not one of the basic reasons that a company's strategy evolves over time?

The need on the part of company managers to make no adjustments to the company's business model

Which of the following is not typically a trigger to an evolving strategy?

The need to respond to short-term swings in the stock market

Managers in all types of businesses must develop a clear answer for which of the following questions?

What is the set of actions that we need to take to outperform the company's competitors and achieve superior profitability?

It is normal for a company's strategy to end up being

a blend of deliberate planned actions to improve the company's competitiveness and financial performance and as-needed unplanned reactions to unanticipated developments and fresh market conditions.

A creative, distinctive strategy that delivers a sustainable, competitive advantage is important because

a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance.

A company achieves sustainable competitive advantage when

a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors.

A company's realized business strategy is made up of

both deliberate and/or planned initiatives that have proven themselves in the marketplace and newly launched initiatives aimed at further boosting performance and emergent and/or reactive adjustments to unanticipated strategic moves by rivals, unexpected changes in customer preferences, and new market opportunities.

A company's business model

is management's blueprint for delivering a valuable product or service to customers in a manner that will yield an attractive profit.

A company achieves a sustainable competitive advantage when

it develops capabilities proven difficult for competitors to imitate or best.

Managers of every company should be willing and ready to modify their strategy because

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

A company's strategy is a "work in progress" and evolves over time because of the

ongoing need of company managers to react and respond to changing industry and competitive conditions.

A company's business model consists of its

profit formula and customer value proposition.

A company is unlikely to develop an emergent strategy due to

rivals' value chain deficiencies.

In evaluating proposed or existing strategies, managers should

scrutinize the company's existing strategies on a regular basis to ensure they offer a good strategic fit, create a competitive advantage, and contribute to an above-average performance.

In evaluating proposed or existing strategies, managers should

scrutinize the company's existing strategies on a regular basis to ensure they offer a good strategic fit, create a competitive advantage, and result in above-average performance.

A creative, distinctive strategy that sets a company apart from its rivals and that gives it a sustainable competitive advantage

signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives.

The competitive moves and business approaches a company's management is using to grow the business, compete successfully, attract and please customers, conduct operations, respond to changing economic and market conditions, and achieve organizational objectives is referred to as its

strategy.

Different companies across different industries adopt any one of the five generic strategies to gain competitive advantage. Which of the following businesses is most likely to use a low-cost provider strategy?

A baby products retailer sells unassembled baby furniture produced in China

Consider the following three companies and their strategies: Company A is an established database management company that acquires a well-reputed but small publishing house to enter the booming publishing industry. Company B, a sports management house, declared bankruptcy during a recent recession but now has created a television network that airs regional sports events. Company C, a package delivery business, is a startup based on delivery efficiency models created by a few students and delivers almost all kinds of packages. Which of the following describes the use of strategies by these companies accurately?

All three companies employ deliberate strategies.

Allset Motors, a manufacturer of self-driving delivery trucks, is working on developing its next-generation vehicles. It has decided on a strategy of focusing on a narrow buyer segment and outcompeting its rivals by offering buyers customized vehicles at a lower cost than its rivals. What basic strategic approach has Allset Motors decided upon?

Best-cost

Which of the following is not included in proven approaches to winning a sustainable competitive advantage?

Crafting a broad-cost provider strategy

An industrial air-conditioner manufacturing giant decides to outsource its operations to a new geographical location with cheaper labor amidst ongoing labor strikes in a few of its existing locations (due to proposed job cuts and relocation of the plant offshore). This draws criticism in its home market and affects its current market position and productivity. Which of the following would be an appropriate reactive (emergent) strategy while moving forward?

Canceling the job cuts till the market situation and entry operations stabilize

Which of the following is a not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

Copying rivals on their competitive moves

Changing circumstances and ongoing managerial efforts to improve the strategy

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

A company's strategy has a chance of succeeding only when it is predicated on

actions, business approaches, and competitive moves aimed at appealing to buyers and setting the company apart from rivals.

The most important aspect(s) of a company's business strategy

are the actions and moves in the marketplace that managers take to gain a sustainable competitive advantage.

Crafting a strategy involves

blending deliberate, planned initiatives with emergent, unplanned reactive responses to changing circumstances, while abandoning planned strategy elements that have failed in the marketplace.

The essence of strategy is

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

A company's strategy consists of

competitive moves and approaches that managers have developed to grow the business, attract and please customers, conduct operations, and achieve targeted objectives.

A well-conceived strategy builds a company's

ethical worthiness and corporate social responsibility.

A winning strategy is one that

fits the company's internal and external situation, builds a sustainable competitive advantage, and improves the company's performance.