Exam 1 Corporate & Business Strategy
A good strategy consists of three elements. The second element is accomplished through strategy formulation, resulting in the firm's functional, business-level, and corporate-level strategies. This is also called _____.
a guiding policy to address the competitive challenge
A firm has a 10% return on invested capital while the industry average return on invested capital is 18%, the firm has a(n) _____.
competitive disadvantage
In the external analysis phase of the AFI strategy framework, what should managers ask?
"How do external forces affect our strategy and competitive advantage?"
Which of the following are elements of a good strategy according to the AFI framework?
- A set of coherent actions to implement the firm's guiding policy - A diagnosis of the competitive challenge - A guiding policy to address the competitive challenge
Which of the following elements comprise strategic management?
- Analysis - Implementation - Formulation
Which of the following are primary strategy objectives?
- Controlling costs - Creating value
Which of the following topics should be considered during the analysis phase of the AFI framework?
- the firm's business model and competitive advantages - the role of strategic leadership and the strategy process -the firm's internal strengths and resources -the external environment and associated challenges
Walmart and Nordstrom maintain very different strategic profiles, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of _____.
- what not to do - what to do
Burger Bomb has been outperforming other burger restaurant in recent years. This indicates that Burger Bomb has which of the following?
A competitive advantage
When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to have achieved ______.
A competitive advantage
Which statement about strategies is true?
A statement of desire on its own often leads to goal conflict
What is the first step in the AFI strategy framework?
Analysis
What is the best definition of the Red Queen effect?
Companies copy each other but do not change strategic positions
The high market valuation achieved by Tesla by 2019 can be largely attributed to its Blank______.
Implementation of its secret strategy
Which of the following statements is true about Tesla, the manufacturer of all-electric cars?
It has a high market valuation
What is the best definition of a cost leadership strategy?
Offering similar goods and services at a lower price
What is the field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation?
Strategic Management
Andrew's Home Center has created a unique situation for itself in its industry that allows the company to not only provide excellent value to its customers but also control its costs. This is known as ______.
Strategic positioning
What is strategy?
The set of actions a firm takes to achieve a competitive advantage
Which of the following statements regarding tasks in the AFI strategy framework is true?
The tasks are very interdependent
A firm's overall efforts to gain and sustain competitive advantage is referred to as which of the following?
a competitive strategy
Based on its long dominance as a coffeehouse chain, Starbucks has ___.
a sustainable competitive advantage
Firms should identify a ______ so that employees can determine if they are making progress in addressing it.
clear competitive challenge
When a firm works to gain a competitive advantage by providing better goods and services than its rivals, it is employing a ______ strategy.
differentiation
A competitive advantage ____.
is assessed relative to other competitors in the industry
The question "How do we implement the formulated strategy through an organizational structure, culture, and control system that values and encourages ethical behavior?" would most likely be examined by managers in the ____ phase of the AFI strategy framework.
operational
In the ____of the strategy implementation phase of the AFI strategy framework, managers would examine how the firm should be structured in order to implement the desired strategy.
organization design
Why should a firm define a clear competitive challenge?
so that employees can assess their progress toward addressing it
In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ___.
the performance of other firms in its industry
Managers often have to make decisions between two conflicting strategic options, otherwise known as ____.
trade-offs
When does a situation of competitive parity exist?
two or more firms achieve the same performance results.