Exam 1

1. In which of the following circumstances is a strategy to be the industry's overall low-cost provider particularly well matched to the market situation?? a. A fashion clothing line uses sought-after designers and natural fabrics b. A mortgage company specializes in lending money for second homes c. An online retailer delivers organic groceries overnight d. A baby products retailer sells unassembled baby furniture produced in China e. A dairy products manufacturer uses exotic substitutes to produce lactose-free dairy products

A baby products retailer sells unassembled baby furniture produced in China

1. Having economies of scale as a key success factor in an industry usually represents _____________. a. An opportunity for a small start-up hoping to break into the industry b. An economy of scope c. A barrier to entry for a small start-up hoping to break into the industry d. An exit barrier for a small start-up hoping to break into the industry An irrelevant factor for a small start-up hoping to break into the industry

A barrier to entry for a small start-up hoping to break into the industry

1. An appropriate substitute for a Coke would be _____________. a. a Pepsi b. a Sam's Cola c. a generic cola brand d. a candy bar There is NO substitute for Coke!

a candy bar

1. In most companies, crafting and executing strategy is: a. the exclusive province of owner-entrepreneurs, CEOs, and other senior executives. b. a process where only a select few managers have a strategy-making role since most managers are not impacted by the company's strategic choices and actions. c. a collaborative effort in which every manager has a role for the area he or she heads. d. typically, a bottom up process where front line management sets the overall strategy and fashions important strategic moves. e. None of the above statements is correct.

a collaborative effort in which every manager has a role for the area he or she heads.

1. Which of the following firms uses an emergent strategy? a. A local hardware store offers a ten-percent discount for seniors on the first Wednesday of every month. b. An online book reseller diversifies into custom book publishing. c. An oil-change franchisor continues geographical expansion despite a recession. d. A health food manufacturer integrates forward into drive-through health food restaurants. e. A microbrewer invests in building community water wells during a drought.

a microbrewer invests in building water wells during a drought.

1. With a limited marketing budget, I need to know which of my industry rivals I most need to concentrate my negative advertising on. Generally, this will be the one(s) trying to get the same customers I'm trying to get, and in pretty much the same way. One tool that I can use to make this determination would be: a. a strategic group map b. SWOT c. an SFAS d. a Five forces analysis e. STEEP analysis

a strategic group map

1. A high level of competition (rivalry) within an industry can be viewed as: a. a barrier to entry b. a sign that the industry is in the mature stage c. a negative in assessing the attractiveness of the industry d. a relatively expensive way of conducting business for industry participants e. all of the above

all of the above

1. Macro-environmental PESTEL analysis considers the effects of forces on ____________. a. a single firm b. industry leaders c. an entire industry d. a strategic group e. a strategic business unit

an entire industry

1. Competitive rivalry is the strongest between firms that _________________________. a. are in the same strategic group b. are in the same industry c. are located in the same geographic area d. share the same available compliments share the same bank

are in the same strategic group

1. Labor unions were formed specifically to increase the ____________________. a. bargaining power of buyers b. bargaining power of suppliers c. rivalry among competitors d. the barriers to entry for potential new entrants e. threat of substitutes

bargaining power of suppliers

1. The Honda Accord offers a great combination of values for its customer. While it does not provide the highest level of luxury or performance, it is clearly a step up from entry level automobiles present in the market. As such, the Accord represents an example of the execution of _________________________. a. best-cost strategy b. differentiation strategy c. low-cost strategy d. price leadership strategy e. balanced scorecard

best cost strategy

1. A ________ strategy is considered to be a hybrid strategy. a. Focused differentiation b. Broad differentiation c. Best-cost d. Low-cost e. Middle-cost

best-cost

1. The________ is/are charged with evaluating and compensating a company's senior executives. a. Chief Financial Officer (CFO) b. Chief Executive Officer (CEO) c. Board of Directors d. Top Management Team (TMT) e. Stockholders

board of directors

1. Wells Fargo's continuing parade of scandals and missteps clearly suggest the failure of the___________ to exercise his/her/its fiduciary oversight responsibility. a. CEO b. COO c. Marketing department d. Board of directors e. CFO

board of directors

1. A strategic vision should have all of the following characteristics EXCEPT: a. desirable b. broad c. flexible d. directional e. feasible

broad

1. It is clear from the chapter discussion that Starbucks is using a __________________ strategy to gain a sustainable competitive advantage in the coffee market. a. Best-cost b. Broad low-cost c. Broad differentiation d. Focused differentiation e. Focused low-cost

broad differentiation

1. Compared to "cellular telephone company," "telecommunications company" would represent a ___________________ mission definition. a. roughly equal b. broader c. narrower d. vision component of a e. top-down

broader

1. A company's ____________ basically defines how a company intends to make money. a. strategy b. business plan c. customer value proposition d. core concept e. business model

business model

1. Amazon's recent decision to enter the grocery business by acquiring Whole Foods opens a new and significant revenue stream for a company that was primarily retail driven. As such, this move represents a change in Amazon's ______________. a. business plan b. business model c. strategic intent d. competitive advantage e. industry effect

business model

1. If I want to determine which products/services would be considered substitutes for the product/service offered by a particular company, I would best consults its: a. vision statement b. mission statement c. objectives d. business model e. policies

business model

1. ________ is the highest level of strategy-making for a company. a. Corporate b. Business c. Functional d. Operational e. Group

corporate

1. Amazon's recent decision to enter the grocery business by acquiring Whole Foods represents strategy at the: a. corporate level only. b. business and operating levels. c. business, functional, and corporate levels. d. business level only. e. beginning of the fiscal year.

corporate level only

1. The Aldi's grocery store chain believes in providing good, healthy food at the lowest price possible. This approach represents Aldi's: a. Profit formula b. Customer value proposition c. differentiation strategy d. Low-cost provider strategy e. Focused low-cost strategy

customer value proposition

1. The two elements of a company's business model are profit formula and __________. a. sustainable competitive advantage b. customer value proposition c. strategy d. cost structure e. deliberate strategy elements

customer value proposition

1. The plan that comes out of a formal strategic management process would best be called a _________________. a. Deliberate strategy b. Emergent strategy c. Realized strategy d. Proactive strategy e. Reactive strategy

deliberate

1. If Wal-Mart were to decide to enter the automobile distributor business, this would represent a monumental shift in that industry and over time would fundamentally change its competitive landscape. Wal-Mart's entry into this market would represent a ____________________ originating from the ________________ environment for the automobile distributor's industry. a. key success factor, internal b. driving force, societal c. key success factor, competitive d. driving force, competitive e. key success factor, natural

driving force, competitive

1. Increasing globalization, changes in long-term industry growth rates, market and product innovation, as well as changes in societal concerns, attitudes, and lifestyles are all categories of: a. Key success factors b. Industry attractiveness c. Substitute products d. Industry inflection points e. Driving forces

driving forces

1. Currency exchange rates would be considered part of the macro environment's _____________ factors: a. political b. economic c. industrial d. social e. global

economic

1. Organizations with mission statements always outperform those without mission statements. a. True b. False

false

1. ___________ objectives are more focused on the past, while __________ objectives are more focused on the future. a. Resource-based; corporate b. Strategic; financial c. Financial; strategic d. Short-term; long-term e. Long-term; short-term

financial, strategic

1. Rolls Royce makes a car that is considered by many to be the height of luxury. Its $400K price tag suggests that the company is using a ____________________ competitive strategy. a. first mover b. broad differentiation c. broad low-cost d. focused differentiation e. focused low-cost

focused differentiation

1. 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. A low-cost provider strategy b. A broad differentiation strategy c. A focused low-cost strategy d. A focused differentiation strategy e. A best-cost provider strategy

focused differentiation strategy

1. _________________ is the approach the marketing department would take to achieve company objectives and maximize resource productivity. a. Corporate strategy b. Business strategy c. Functional strategy d. Operational strategy e. Objectives

functional strategy

1. The most attractive customer value proposition is attained by: a. Increasing value provided and lowering the price b. Increasing value provided and lowering the cost c. Lowering cost and lowering value provided d. Increasing price and lowering cost e. None of the other answers is correct

increasing value and lowering the price

1. Exit barriers are obstacles that determine how easily a firm can leave the industry. When exit barriers are high, what happens to industry attractiveness? a. It decreases. b. It increases. c. It becomes a complement. d. It decreases as profitability increases. e. It has no impact.

it decreases

1. ____________ define(s) what a company needs to have, be, or be good at in order to be competitive in a given industry. a. The five forces b. Key success factors c. A company's mission d. Strategic vision e. The business model

key success factors

1. Congress passed the Clean Air Act in response to the public's newfound environmental concerns and outrage over what it (the public) perceived to be unrestrained corporate pollution. In response, a number of industries such as utilities and automobile manufacturers have had to make dramatic changes in the technology used in the creation and operation of their products. These industries are responding to a change in the ________________ environment that was brought about by changes in the ________________ environment. a. technological, legal b. technological, sociocultural c. political, technological d. Sociocultural, political e. legal, sociocultural

legal, sociocultural

1. The most used strategic approaches include a. build market share, maintain market share, and slowly surrender market share. b. offensive strategies and defensive strategies. c. overall low-cost provider, broad differentiation, focused low-cost, focused differentiation and best-cost. d. low-cost/low price strategies, high-quality/high price strategies, and medium quality/medium price strategies. e. price leader strategies, price follower strategies, technology leader strategies, first-mover strategies, offensive strategies, and defensive strategies.

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

1. The pharmaceuticals lobby has been quite effective in helping to shape the opioid debate that's been raging in Washington for the last couple of years. As such, they would be considered a ____________ force for the healthcare industry. a. political b. legal c. sociocultural d. technological e. economic

political

1. The recently passed Tax Cuts and Jobs Act (TCJA) represents a(n) _______________________ for a business seeking to understand their business environment. a. ecological force b. legal force c. political force d. sociocultural force e. economic force

political

1. According to Henry Mintzberg, the strategy that will ultimately determine an organization's success or failure is its: a. realized strategy b. emergent strategy c. abandoned strategy d. vision e. deliberate strategy

realized strategy

1. Avon was originally founded as a vehicle for selling an aspiring author's books. When his books didn't sell as quickly as he expected, he hit upon the idea of including a small bottle of perfume with each book as a marketing gimmick. The perfume turned out to be more popular than the books and a cosmetic empire was born. Avon's near-century of success in the cosmetics industry is a classic example of a(n) _______________ strategy resulting from a(n) ______________ strategy. a. emergent, deliberate b. realized, emergent c. abandoned, emergent d. realized, deliberate e. intended, unrealized

realized, emergent

1. To protect shareholders from the failed oversight that lead to many infamous corporate scandals, Congress passed the _______________________ in 2002. a. Foreign Corrupt Practices Act b. Whistleblower Protection Act c. Executive Leadership Act d. Sarbanes-Oxley Act e. Agency Act

sarbanes-oxley act

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

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

1. Having completely reshaped the retail industry, Amazon's recent decision to enter grocery business through its acquisition of Whole Foods likely represents a ____________ for Publix, Kroger, Wal-Mart and other competitors in the grocery industry. a. sustainable competitive advantage b. threat of new entry c. strategic inflection point d. SMART objective e. BHAG

threat of new entry

1. Having a competitive advantage does not always guarantee competitive success. a. True b. False

true

1. Rivalry based on price competition can be devastating for the industry while leading to only positive results for its customers. a. True b. False

true

1. The designated beliefs and desired way of doing things at a company are called what? a. Values b. Mission c. Strategic plan d. Competitive advantage e. Strategic vision

values

1. Sony's relentless (and ultimately successful) 50-year effort to positively redefine the perception of Japanese quality in the minds of global consumers clearly reflects its_________________. a. mission statement b. vision statement c. values d. strategic intent e. strategic objective

vision statement

1. In which one of the following market circumstances is a broad differentiation strategy generally not well suited? a. When buyer needs and preferences are diverse b. When few rivals are pursuing a similar differentiation approach c. When buyers are homogeneous in their needs and preferences and are generally satisfied with standardized product d. When there are many ways to differentiate the product or service and many buyers perceive these differences as having value e. When technological change is fast-paced and competition revolves around rapidly evolving product features

when buyers are homogeneous in their needs and preferences and are generally satisfied with standardized product

1. A firm's external environment includes all but: a. the company, itself b. political factors c. its industry d. its strategic group e. it includes all of these

the company, itself

1. The power of the buyers is high when: a. There are many buyers. b. Each buyer purchases large quantities relative to the size of a single industry member. c. Buyers face large switching costs. d. The industry's products are differentiated. e. Buyers cannot credibly threaten backward integration.

Each buyer purchases large quantities relative to the size of a single industry member.

1. It is always better to have a broadly defined mission rather than a narrowly defined one mission because: a. It allows more wiggle room for the company to respond to shifts in the competitive environment b. It provides for a narrower organizational focus c. It provides for a broader organizational focus d. It is never better to have a broadly defined mission rather than a narrowly defined one. e. It is not always better to have a broadly defined mission rather than a narrowly defined one.

It is not always better to have a broadly defined mission rather than a narrowly defined one.

1. The environmental analysis that looks at the natural environment plus aspects of the societal environment is called the _____________________. a. Five forces analysis b. PESTEL analysis c. Opportunity analysis d. STEP analysis Competitive analysis

PESTEL analysis

1. The three questions used to test for a winning strategy focus on fit, sustainability, and _________________. a. Performance b. Cost c. Visibility d. Change e. Value

Performance

1. ___________________ tends to be a combination of planned elements and unplanned elements of a company's strategy. a. Emergent strategy b. Deliberate strategy c. Realized strategy d. Sustainable competitive advantage e. Abandoned strategy

Realized Strategy

1. ___________ looks at both strategic and financial objectives when measuring company performance. a. The Balanced Scorecard approach b. Corporate strategy c. Business strategy d. A collaborative team effort e. The emergent strategy approach

The Balanced Scorecard approach

1. Suppliers are powerful when which of the following happens? a. Satisfactory substitutes are available. b. They sell a commodity. c. They offer a credible threat of forward integration. d. They are part of a highly fragmented industry. e. None of the above

They offer a credible threat of forward integration.

1. In which of the following circumstances is a strategy to be the industry's overall low-cost provider not particularly well matched to the market situation? a. When the offerings of rival firms are essentially identical, standardized, commodity-like products b. When there are few ways to achieve differentiation that have value to buyers c. When price competition is especially vigorous d. When buyers have widely varying needs and special requirements and the prices of substitute products are relatively high e. When industry newcomers use introductory prices to build a customer base.

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

1. Having economies of scale would be most useful if you were attempting to execute a(n) _____________ strategy. a. integration b. low-cost c. differentiation d. focused differentiation e. focused low-cost

low-cost

1. Rivalry among competitors is likely to be strongest when the industry is in the ____________ stage of its lifecycle. a. introduction b. growth c. mature d. declining e. stage makes no difference

mature

1. "We will do better in ROI by June of next year" is not a well-stated objective because it is clearly not: a. Specific b. Measurable c. Attainable d. Relevant e. Time-Specific

measurable

1. When an organization briefly describes what its business is about and why it does it, they have articulated a(n) _______________. a. values statement b. strategic vision statement c. mission statement d. strategic plan e. objective

mission statement

1. If I were interested in finding out what a company is about, I would consult its _____________ and if I wanted to know what it wants to accomplish I would refer to its ___________________. a. mission statement, culture b. culture, goals/objectives c. vision statement, goals/objectives d. mission statement, vision statement e. business plan, mission statement

mission statement, vision statement

1. Compared to "beverage company," "cola company" would represent a ___________________ mission definition. a. roughly equal b. broader c. narrower d. vision component of a e. top-down

narrower

1. Once developed, a company's ___________ should never be changed. a. mission b. strategic vision c. business model d. objectives e. none of the other answers is correct

none of the other answers is correct

1. An organization is more likely to get effective oversight of top management with ___________________ directors than with ______________________ directors. a. outside, inside b. affiliated, outside c. inside, outside d. inside, affiliated e. family, outside

outside, inside

1. The fact that the number of Americans who classify as Middle Class is declining represents a(n) _____________ factor in the PESTEL. a. Political b. Economic c. Sociocultural d. Technological e. Ecological

sociocultural

1. The aging of the U.S. population would represent a(n) _______________________ for a business seeking to understand its business environment. a. ecological force b. political-legal force c. key success factor d. sociocultural force e. economic force

sociocultural force

1. ________________ has been reached when management realizes that the industry has changed in a significant way that renders the company's strategic vision obsolete. a. Sustainable competitive advantage b. Competitive advantage c. An emergent strategy d. A strategic inflection point e. A strategic objective

strategic inflection point

1. As a senior manager at ACME, Inc. Freda Crawford is regularly bombarded with business opportunities from a variety of sources. In order to properly determine the appropriateness of a given offer for today's ACME, Ms. Crawford should consult the company's ___________ which should provide the context for strategic decision making. a. standard operating procedures b. strategic vision c. mission statement d. objectives e. employee handbook

strategic vision

1. A company's __________ defines its approach to creating superior value for customers and how capabilities and resources will be employed to deliver the desired value to customers. a. strategy b. competitive advantage c. goals d. business model e. profit formula

strategy

1. A __________ allows a company to attract sufficiently large numbers of buyers who have a lasting preference for its products or services over those offered by rivals, despite the efforts of the competitors to offset that appeal and overcome the company's advantage. a. Sustainable competitive advantage b. Competitive advantage c. Realized strategy d. Customer value proposition e. Deliberate strategy

sustainable competitive advantage