MGMT 449 E2

All other things being equal, the "best" generic competitive strategy for a company to employ is a strategy that... A. 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 B. Concentrates on value-conscious buyers and outcompetes rivals by offering products at attractive prices C. Seeks to underprice rivals on comparable products that attract a broad spectrum of buyers D. Concentrated on a narrow buyer segmnet and outcompetes rivals by offering niche members customized attributes E. Seeks to differentiate product offering from rivals by offering superior attributes that attract a broad spectrum of buyers

A. 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 advantages of using a licensing strategy to participate in foreign markets include... A. being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign markets. B. being able to achieve higher product quality and better product performance than with an export strategy. C. being especially well-suited to achieve scale economies. D. being able to achieve first-mover advantages quickly and easily. E. being able to charge lower prices than rivals.

A. being able to leverage the company's technical know-how, appealing brand, or patents without committing their resources or capabilities to foreign ma

Strategic offensives should, as a general rule, be based on... A. exploiting a company's strongest competitive assets-its most valuable resources and capabilities. B. molding an organization's character and identity. C. instigating and executing the chosen strategy efficiently and effectively. D. scoping and scaling an organization's internal and external situation. E. satisfying the buyer's needs that the company seeks to meet.

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

The primary reasons that companies opt to expand into foreign markets are to... A. gain access to new customers, achieve lower costs, enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base. B. avoid having to employ an export strategy, avoid the threat of cross-market subsidization from rivals, and enable the use of a global strategy instead of a multidomestic strategy. C. raise the entry barriers for industry newcomers, neutralize the bargaining power of important suppliers, grow sales faster, and increase the number of loyal customers. D. boost returns on investment, broaden their product lines, avoid tariffs and trade restrictions, and escape dealing with strong labor unions. E. grow sales faster than the industry average, reduce the competitive threats from rivals, and open up more opportunities to enter into strategic alliances.

A. gain access to new customers, achieve lower costs, enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base.

The impact of fluctuating exchange rates on companies competing in foreign markets... A. help domestic companies under pressure from lower-cost imports when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made. B. always disadvantage domestic companies facing competitive pressure from lower-cost imports when their government's currency grows weaker. C. never change the pecking order consisting of which countries represent the low-cost manufacturing locations and which rivals have the upper hand in the marketplace. D. are easy to predict in spite of the variety of factors involved and the uncertainties surrounding when and by how much these factors will change.

A. help domestic companies under pressure from lower-cost imports when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

A focused differentiation strategy aims at securing competitive advantage by... A. offering a product carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers. B. Providing niche members with a top-of-the-line product at a premium price C. Convincing a narrow, well-defined group of buyers that the company has a truly world-class product D. Catering to buyers looking for an upscale product at an attractively low price E. Developing product attributes that no other company in the industry has

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

Management's ranking of business units and establishing a priority for resource allocation should... A. put business units with the brightest profit and growth prospects and solid strategic and resource fits at the top of the investment priority list. B. always make the company's business units with strong resource strengths and competitive capabilities the central focus of funding initiatives. C. give priority for funding to cash hog businesses. D. first consider the strength of funding proposals presented by managers of each division or business unit. E. utilize activity-based costing and benchmarking to determine the funding needs of each business unit.

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

A focused low-cost strategy seeks to achieve competitive advantage by... A. serving buyers in a narrow piece of the total market (target market niche) at a lower cost and lower price than rivals. B. performing the primary value chain activities at a lower cost per unit than can the industry's low-cost leaders. C. outmatching competitors in offering niche members an absolute rock-bottom price. D. dominating more market niches in the industry via a lower cost and a lower price than any other rival. E. delivering more value for lesser money than other competitors.

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

The two most compelling reasons for a company to pursue vertical integration (either forward or backward) are to... A. strengthen the company's competitive position and/or boost its profitability. B. achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain greater ability to reduce internal operating costs. C. expand into foreign markets and/or control more of the industry value chain. D. enable use of offensive strategies and/or gain a first-mover advantage over rivals in revamping the industry value chain. E. broaden the firm's product line and/or avoid the need for outsourcing.

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

What is the difference between economies of scale and economies of scope? A. Scale refers to the magnitude or size of the operation, while scope refers to the reach of defined savings within the value chain. B. 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. C. Scale is about dimensions, while scope is about the capacity available for production capabilities. D. Scale and scope mean the same thing and the only difference is the extent of cost savings accrued from unrelated businesses in each. E. Scale refers to the extent of change, while scope refers to the possibilities of change.

B. 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.

The biggest and most important differences among competitive strategies of different companies boil down to... A. The relative emphasis they place on offensive versus defensive B. 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 C. The kinds of actions companies take to improve their competitive assets and reduce their competitive liabilities D. The different ways they companies try to cope with the five competitive forces E. How they go about building a brand name image that buyers trust and whether they are a risk-taker or risk-avoider

B. 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

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. A rise in the price of the differentiated good, giving the differentiator a clear value advantage over the average rival B. a rise in the perceived value of the differentiated good, giving the differentiator a clear competitive advantage over the average rival. C. no change in the perceived value of the differentiated good, giving the differentiator a clear competitive advantage over the average rival. D. no change in the price of the differentiated good, giving the differentiator a clear value advantage over the average rival. E. a drop in the price of the differentiated good, giving the differentiator a clear competitive advantage over the average rival.

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

Diversification ought to be considered when a... A. company has run out of ways to achieve a distinctive competence in its present business. B. company begins to encounter diminishing growth prospects in its mainstay business. C. company's profits are being squeezed and it needs to increase its net profit margins and return on investment. D. company lacks sustainable competitive advantage in its present business. E. company is under pressure to create a more attractive and cost-efficient value chain.

B. company begins to encounter diminishing growth prospects in its mainstay business.

Strategic fit between two or more businesses exists when one or more activities comprising their respective value chains present opportunities... A. to maintain business value chain activities separate and apart from one business to another to protect company independence. B. for cross-business collaboration to build valuable new resource strengths and competitive capabilities. C. to independently preserve common brand names from cross-business usage. D. to increase costs by combining the performance of the related value chain activities of different businesses. E. to prevent the transfer of expertise or technology or capabilities from one business to another.

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

A localized or multidomestic strategy... A. involves much less adherence to using the same basic competitive strategy theme (low-cost, differentiation, best-cost, or focused) in all country markets. B. has two big drawbacks: (1) it hinders transfer of a company's competencies and resources across country boundaries because the strategies in different host countries can be grounded in varying competencies and capabilities; and (2) it does not promote building a single, unified competitive advantage, especially one based on low cost. C. is generally inferior to a global strategy when it comes to pursuing product differentiation. D. is generally preferable to a global strategy in situations where buyers are price sensitive because a "think-local, act-local" type of multidomestic strategy is better suited to achieving low unit costs than a global strategy. E. is generally best suited for globally standardized industries, in which small country-by-country differences can be accommodated.

B. has two big drawbacks: (1) it hinders transfer of a company's competencies and resources across country boundaries because the strategies in different host countries can be grounded in varying competencies and capabilities; and (2) it does not promote building a single, unified competitive advantage, especially one based on low cost.

Businesses with strategic fit with respect to their supply chain activities perform better together because of all of the following except the... A. potential for skills transfer in procuring materials. B. increased allocation and allotment of support activities and specialized resources and capabilities. C. added leverage gained with shippers when securing volume discounts on incoming parts and components. D. benefits of added collaboration with common supply chain partners. E. sharing of resources and capabilities in logistics.

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

A diversified company has a parenting advantage when it... A. results in supporting short-term economic shareholder value. B. 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 C. is more able than other companies to create positive collaboration within its portfolio for different specialty groups and geographic locations. D. avoids acquiring undervalued companies and thus reduces risks. E. manages a set of fundamentally similar business operations inside fundamentally similar industries and environments.

B. 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 principal advantages of strategic alliances over vertical integration or horizontalmergers/acquisitions are... A. the facilitation of best practices, more production capacity, and relevant synergistic savings. B. resource pooling and risk sharing, more adaptive response capabilities, and greater speed of deployment. C. the transactional and relational concept of operating practices and competencies. D. potential profitability of the alliance and related experience-curve economics. E. material additions to a company's technological capabilities, strengthening of the firm's competitive position, and boosting of its profitability.

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

Focusing carries several risks, one of which is the... A. Inability of a company to compete industry-wide B. Potential for the segment to become too specialized for other multi-segmented rivals to enter C. Chance that competitors will find effective ways to match the focused firm's capabilities in serving the target market D. Chance that niche customers will bargain more aggressively for good deals than customers in the overall marketplace E. Potential for the segment to be highly vulnerable to economic cycles

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

A blue-ocean strategy... A. Works best when a company is the industry's low-cost leader B. Involves an unexpected (out-of-the-blue) preemptive strike to secure an advantageous position in a fast-growing market segment C. 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. D. Involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals. E. is an offensive strike employed by a market leader that is directed at pilfering customers away from unsuspecting rivals to boost profitability.

C. 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.

What might be considered to be a major drawback of employing an outsourcing strategy? A. It improves organizational flexibility and speeds time to market. B. It reduces the company's risk exposure to changing technology and/or buyer preferences. C. 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. D. It allows a company to concentrate on its core business, leverage its key resources and core competencies, and do even better what it already does best. E. It involves an activity that can be performed better or more cheaply by outside specialists.

C. 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.

Focused strategies keyed either to low cost or differentiation are especially appropriate for situations where... A. Buyers have strong bargaining power and entry barriers are low B. Most other rival firms are using a best-cost producer strategy C. The market is composed of distinctly different buyer groups who have different needs or use the product in different ways D. Most industry rivals have weakly differentiated products E. Most industry participants are also using a focused differentiation strategy

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

Crafting a strategy to compete in one or more foreign markets can be considered complex because... A. factors that affect industry competitiveness are the same from country to country. B. different government policies and economic conditions make the business climate more favorable in some countries than in others. C. buyer tastes and preferences differ among countries and present a challenge for companies concerning. customizing versus standardizing their products and services. D. the potential for location-based advantages to conducting value chain activities in certain countries. E. currency exchange rates among countries are generally fixed and rarely change.

C. buyer tastes and preferences differ among countries and present a challenge for companies concerning. customizing versus standardizing their products and services.

The world economy is globalizing at an accelerated pace because... A. information technology is exacerbating the importance of geographic distance. B. countries previously open to foreign companies have closed their markets. C. growth-minded companies are racing to build stronger competitive positions in the markets of more countries. D. countries opposed to market or mixed economies have erected more stringent trade barriers. E. countries that previously had market or mixed economies now embrace planned economies.

C. growth-minded companies are racing to build stronger competitive positions in the markets of more countries.

A primary reason why mergers and acquisitions sometimes fail is due to the... A. advertising message detailing the merger announcement. B. development of effective integration plans conducive to employee satisfaction. C. misinterpretation of the cultural differences, like employee disenchantment and low morale, differences in management styles and operating procedures, and operations integration decision mistakes. D. execution of functional and integration activity, while sustaining and capitalizing on the combined sources of revenue. E. creation of management-employee programs in order to foster better communication.

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

Bypassing regular wholesale/retail channels in favor of direct sales and Internet retailing can have appeal if it... A. can establish a retail frontal attack while efficiently managing its backward (defensive) sales orientation. B. can result in better coordination of the firm's direct sales activity to wholesalers and distributors. C. reinforces the brand, enhances consumer satisfaction, and results in lower prices to end users. D. combines the best of all sales channels and provides financial support to distribution allies. E. creates a channel conflict, thereby providing competitive improvisation.

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

What makes related diversification an attractive strategy? A. the ability to broaden the company's product line B. the added capability it provides in overcoming the barriers to entering foreign markets C. the opportunity to convert cross-business strategic fit into competitive advantage over business rivals whose operations don't offer comparable strategic fit benefits D. the potential for improving the stability of the company's financial performance E. the ability to serve a broader spectrum of buyer needs

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

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... A. to be a late mover (because it is cheaper and easier to imitate the successful moves of the leaders and moving late allows a company to avoid the mistakes and costs associated with trying to be a pioneer-first-mover disadvantages usually overwhelm first-mover advantages). B. to be the first mover. C. to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly. D. to be a fast follower. E. to be the last mover-playing catch-up is usually fairly easy and almost always is much cheaper than any other option.

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

To fend off a competitive attack, defensive-minded companies... A. remain steadfast to current product features and models to ensure resources are not diverted toward unproductive efforts. B. void all lengthy warranties to save money. C. use innovation and intellectual property protection to obtain product line exclusivity to force competitors to use other distributors. D. avoid giving suppliers volume discounts or providing them with better financing terms from the strategic response in order to maintain current profitability levels. E. avoid competitor's clients since their loyalty will not allow them to switch.

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

The chief purpose of calculating quantitative industry attractiveness scores for each industry a company has diversified into is to... A. rank the attractiveness of the various industry value chains from best to worst. B. determine which industry is the biggest and fastest growing. C. ascertain which industries have the easiest-to-achieve key success factors. D. assist management in determining what the corporate parent's priorities should be in allocating resources to its various businesses. E. get in position to rank the industries from most competitive to least competitive.

D. assist management in determining what the corporate parent's priorities should be in allocating resources to its various businesses.

A U.S. organic personal hygiene product manufacturer that exports toothpaste and deodorant made at its U.S. plants for shipment to the U.K. market... A. is largely unaffected by fluctuating exchange rates. It would, however, be affected if its plants were in the United Kingdom or other foreign countries. B. has no interest in whether the dollar grows stronger or weaker versus the British pound unless it is competing only against companies located in the United Kingdom. C. is competitively disadvantaged when the U.S. dollar declines in value against the British pound. D. becomes more competitive in the United Kingdom when the U.S. dollar declines in value against the British pound. E. becomes more competitive in the United Kingdom when the U.S. dollar gains in value against the British pound.

D. becomes more competitive in the United Kingdom when the U.S. dollar declines in value against the British pound.

The advantages of using an acquisition strategy to pursue opportunities in foreign markets include... A. exporting goods at higher costs than rivals in those locations. B. allowing a company to achieve scalable economies. C. eliminating the costs and risks associated with establishing a foreign business location. D. having a high level of control and speed as an entry strategy to overcome trade barriers. E. achieving variable product quality and competitive product performance.

D. having a high level of control and speed as an entry strategy to overcome trade barriers.

A global strategy allows for... A. a firm's overall competitive advantage to be determined by the size of the competitive advantage it has in each of its profit sanctuaries. B. the industry leaders to be foreign companies, while domestic companies are relegated to runner-up status. C. the leading companies to compete for the biggest share of the world market, but only occasionally compete head-to-head in different countries. D. the markets in various countries to be part of the world market and competitive conditions across country markets to be strongly linked. E. a company's overall market strength to be the sum of its market shares in each country market where it has a presence.

D. the markets in various countries to be part of the world market and competitive conditions across country markets to be strongly linked.

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... A. bargaining costs. B. the costs of evaluating its worth. C. the costs of searching for an attractive target. D. the premium cost. E. the costs of completing the transaction.

D. the premium cost.

Best-cost providers strategies are those that... A. Look for a differentiation advantage rather than low-cost advantage B. Are rewarded by providing buyers with the best attributes at a premium C. Have strategy elements related to the lowest-cost provider in the largest and fastest growing (or best) market segment D. Look for low-cost advantage rather than a differentiation advantage E. Are a hybrid of low-cost provider and differentiation strategies that aim at providing desired attributes while beating rivals on price

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

A company's competitive strategy should... A. Be well attuned to doing an outstanding job of satisfying the needs and expectations of niche buyers B. Be well-matched to its resources and capabilites in order to incorporate standard attributes into its product offering C. Ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves D. Be supportive with it s objective to become at least an average performer within its industry E. Be well-matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies

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

Best-cost provider strategies are appealing in those market situations where.. A. Buyers are more quality-conscious than price-conscious B. A company is positioned between competitors who have ultra-low prices and competitors who have top-notch products in terms of both quality and performance C. There are numerous buyer segments, buyer needs are diverse across these segments, only a few of the segments are growing rapidly, and sellers' products are strongly differentiated D. Buyers are more performance-conscious than value-conscious E. 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

E. 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

A strategy that incorporates elements of both multidomestic and global strategies is termed a "transnational" strategy, but sometimes it is referred to as a(n) ________ strategy. A. think-local, act-global B. standardized integrated C. international D. cross-border integrated E. glocalization

E. glocalization

Unrelated businesses... A. perform better than just the sum of the individual businesses. B. will always have several key suppliers in common. C. sell products from the different businesses to much the same types of buyers and retail outlets. D. employ production methods that create economies of scale. E. have dissimilar value chains and resource requirements with no competitively important cross-business commonalities at the value chain level.

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

What does the scope of the firm refer to? A. the range of activities the firm performs externally and its social responsibility activities B. the firm's capability to employ vertical integration strategies C. to gain competitive advantage based on where it locates its various value chain activities D. to prevent foreign competition from affecting the market E. 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

E. 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