MGMT 4850 Exam #1 Sample Questions
A company achieves a competitive advantage when it A. provides buyers with superior value compared to rival sellers or offers the same value at a lower cost. B. has a profitable business model. C. is able to maximize shareholder wealth. D. is consistently able to achieve both its strategic and financial objectives. E. has a strategy well-matched to its business model.
A.
A company's mission statement typically addresses which of the following questions? A. Who are we and what do we do? B. What objectives and level of performance do we want to achieve? C. Where are we going and what should our strategy be? D. What approach should we take to achieve sustainable competitive advantage? E. What business model should we employ to achieve our objectives and our vision?
A.
A company's strategy consists of the action plan management takes to A. stake out a unique market position and achieve superior profitability. B. compete against rivals and establish a transitory competitive advantage. C. concentrate on improving the existing product offering irrespective of the changing and turbulent markets. D. develop a more appealing business model than rivals. E. identify its strategic vision, its strategic objectives, and its strategic intent.
A.
Business strategy concerns: A. strengthening the market position and building competitive advantage for a single line of business. B. ensuring consistency in strategic approach among the businesses of a diversified company. C. selecting a model for a single line of business to use in pursuing objectives that contribute to the whole of a diversified company. D. selecting a set of stretch financial and strategic objectives for a single business unit. E. choosing the most appropriate strategic intent for a specific line of business.
A.
Changing circumstances and ongoing managerial efforts to improve the strategy A. account for why a company's strategy evolves over time. B. explain why a company's strategic vision undergoes almost constant change. C. make it very difficult for a company to have concrete strategic objectives. D. make it very hard to know what a company's strategy really is. E. are consistent with a planned strategy approach.
A.
Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of: A. explaining "where we are going and why" and, more importantly, inspiring and energizing company personnel to unite to get the company moving in the intended direction. B. helping company personnel understand why "making a profit" and "having a business plan" are so important. C. making it easier for top executives to set and communicate the company's stretch objectives. D. helping lower-level managers and employees better understand the company's business model. E. aiding lower-level managers and employees in formulating and achieving a balanced scorecard.
A.
Every strategy needs A. a distinctive element that attracts customers and produces a competitive edge. B. to include similar characteristics to rival company strategies. C. to pursue conservative growth built on historical strengths. D. to employ diverse and sundry operating practices for producing greater control over sales growth targets. E. to mimic the plans of the industry's most successful companies.
A.
Excellent execution of an excellent strategy is A. the best test of managerial excellence and the best recipe for making a company a standout performer. B. a solid indication that managers are maximizing profits and looking out for the best interests of shareholders. C. the best test of whether a company is a "true" industry leader. D. the best evidence that managers have an emerging business model. E. the best test of whether a company enjoys sustainable competitive advantage.
A.
Functional-area strategies: A. concern the actions, approaches, and practices to be employed in managing particular functions within a business. B. specify what actions a company should take to resolve specific strategic issues and problems. C. are normally crafted by operating-level managers. D. are concerned with how to unify the firm's several different operating strategies into a cohesive whole. E. are normally crafted by the company's CEO and other senior executives.
A.
Managers can deliberately set challenging performance targets at levels high enough to promote outstanding company performance by establishing: A. stretch objectives which challenge the organization to deliver stretch gains in performance. B. mainstay objectives that although are easily attainable, and the company is obligated to meet, they are designed to spur motivation in the workforce. C. financial objectives that drive standardization of cost-efficiency and unify stringent operating specifications. D. a specifically detailed and integrated model of operating policies, practices, and procedures. E. why the company does certain things in trying to please its customers.
A.
Managers of every company should be willing and ready to modify the strategy because A. market conditions and circumstances are changing over time or the current strategy is clearly failing. B. the task of crafting strategy is a one-time event. C. the strategic vision necessitates periodic updating. D. frequent changes in strategy make it very difficult for rivals to imitate. E. all strategies are reactive.
A.
Strategy is about competing differently than rivals, thus strategy success is about A. the sources of sustained advantages and superior profitability. B. those emergent, unplanned, reactive, and adaptive plans that are more appropriate than deliberate or intended ones that drive the realized strategy. C. matching internal resources and capabilities to the industry environment. D. keeping the firm current with the rapid pace of change in the industry. E. replacing proactive and reactive measures by modified ongoing strategic elements to preserve company values.
A.
The defining characteristic of a well-conceived strategic vision is: A. what it says about the company's future strategic course—"the direction we are headed and what our future product-market-customer focus will be." B. that it not stretch the company's resources too thin across different products, technologies, and geographic markets. C. clarity and specificity about "who we are, what we do, and why we are here." D. that it be flexible and operate in the mainstream. E. that it be within the realm of what the company can reasonably expect to achieve within four years.
A.
The faster a company's business environment is changing, the more critical it becomes for its managers to: A. pay attention to early warnings of future change and be willing to experiment to establish a market position in the future. B. determine whether the company has a balanced scorecard for judging its performance. C. establish controls to monitor the impact of external changes appropriately and ensure the internal environment is maintained. D. replicate and implement only those strategies that have worked for rivals. E. determine what changes should be made to its customer value proposition.
A.
The task of stitching together a strategy: A. entails addressing a series of hows: how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, and how to achieve strategic and financial objectives. B. is primarily an exercise in deciding which of several freshly emerging market opportunities to pursue. C. is mainly an exercise that should be dictated by what is comfortable to management from a risk perspective and what is acceptable in terms of capital requirements. D. requires trying to copy the strategies of industry leaders as closely as possible. E. is mainly an exercise in good planning.
A.
Well-stated objectives are: A. quantifiable, or measurable, and contain deadlines for achievement. B. succinct and concise so as to identify the company's risk and return options. C. broad and take into account views of all the stakeholders. D. directly related to the dividend payout ratio for stockholder returns. E. representative of customers' aspirations for company performance.
A.
What is the foremost question in running a business enterprise? A. What must managers do, and do well, to make a company a winner in the marketplace? B. What can employees do, and do well, to ensure customer satisfaction? C. What can shareholders do, and do well, to ensure a profitable company? D. What do customers do, how to profile customers who buy a company's product, and tailor sales strategy around them? E. What do suppliers do, and how to get supplies at the lowest cost to build a profitable business?
A.
When trade-offs have to be made between achieving long-term and achieving short-term objectives: A. long-term objectives should take precedence unless the short-term performance targets have unique importance. B. long-term objectives should take precedence because of the need for future survival. C. short-term objectives should take precedence because they focus attention on delivering performance improvement. D. short-term objectives should take precedence unless the long-term performance targets are not achievable. E. long-term objectives should never take precedence until the short-term objective is achieved.
A.
Which of the following are integral parts of the managerial process of crafting and executing strategy? A. developing a strategic vision, Strategic Management, and crafting a strategy B. developing a proven business model, deciding on the company's strategic intent, and crafting a strategy C. Strategic Management, crafting a strategy, implementing and executing the chosen strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage D. coming up with a statement of the company's mission and purpose, Strategic Management, choosing what business approaches to employ, selecting a business model, and monitoring developments E. deciding on the company's strategic intent, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ
A.
Which of the following is the best example of a well-stated financial objective? A. Increase earnings per share by 15 percent annually. B. Gradually boost market share from 10 percent to 15 percent over the next several years. C. Achieve lower costs than any other industry competitor. D. Boost revenues by a percentage margin greater than the industry average. E. Maximize total company profits and return on investment.
A.
Which one of the following does NOT account for WHY a company's strategy evolves from one version to another? A. a need to promote stability and retain the status quo B. the need to abandon some strategy elements that are no longer working well C. a need to respond to changing customer requirements and expectations D. a need to react to fresh strategic maneuvers on the part of rival firms E. the proactive efforts of company managers to improve obsolete aspects of the strategy
A.
__________ is the set of actions that its managers take to outperform the company's competitors and achieve superior profitability. A. A strategy B. A mission statement C. Strategic intent D. A cost-price framework E. A market vision
A.
A company achieves sustainable competitive advantage when A. it has a profitable business model. B. a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors. C. it is able to maximize shareholder wealth. D. it is consistently able to achieve both its strategic and financial objectives. E. its strategy and its business model are well matched and in sync.
B.
A company needs financial objectives: A. to overtake key competitors on such important measures as net profit margins and return on investment. B. because without adequate profitability and financial strength, the company's ultimate survival is jeopardized. C. to convince shareholders that top management is acting in their interests. D. to translate the company's business model into action items. E. to indicate to employees that financial objectives always take precedence over strategic objectives.
B.
A company's business model A. concerns the actions and business approaches that will be used to grow the business, conduct operations, and stake a competitor's market position. B. is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit. C. concerns what combination of moves in the marketplace it plans to make to outcompete rivals. D. deals with how it can simultaneously maximize profits and operate in a socially responsible manner that keeps its prices as low as possible. E. concerns how management plans to pursue strategic objectives, given the larger imperative of meeting or beating its financial performance targets.
B.
A company's realized strategy evolves from one version to the next due to A. changing management direction because of understanding several appealing strategy alternatives. B. the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms. C. ongoing turnover in the managerial and executive ranks (new managers often decide to shift to a different strategy). D. pressures from shareholders to boost profit margins and pay higher dividends. E. the importance of keeping the company's business model fresh and up-to-date.
B.
A company's strategic plan: A. details key objectives and the strategy for achieving them. B. lays out its future direction and business purpose, performance targets and strategy. C. identifies the company's strategy and management's specific, detailed plans for implementation. D. consists of a company's strategic vision, strategic objectives, strategic intent, and strategy. E. summarizes the company's strategic vision, a strategy, and a business model.
B.
A company's strategy is NOT concerned with management's choices about how to A. attract and please customers. B. stake out the same market position as successful rival companies. C. grow the business. D. compete successfully. E. conduct operations and improve the company's financial and market performance.
B.
A winning strategy must pass which three tests? A. the Dominant Market Test, the Sustainable Advantage Test, and the Profit Test B. the Fit Test, the Competitive Advantage Test, and the Performance Test C. the Sustainable Performance Test, the Fit Test, and the Profit Test D. the Performance Test, the Dominant Market Test, and the Fit Test E. the Fit Test, the Sustainable Advantage Test, and the Dominant Market Test
B.
Business strategy, as distinct from corporate strategy, is chiefly concerned with: A. deciding what new businesses to enter, which existing businesses to get out of, and which existing business to remain in. B. deciding how to build competitive advantage and improve performance in a particular line of business. C. making sure the strategic intent of a particular business is in step with the company's overall strategic intent and strategy. D. coordinating the competitive approaches of a company's different business units. E. what business model to employ in each of the company's different businesses.
B.
Company objectives: A. are needed only in those areas directly related to a company's short-term and long-term financial strength. B. need to be broken down into performance targets for separate businesses, product lines, functional departments, and individual work units. C. play the important role of establishing the direction towards which an organization needs to be headed. D. are important because they help guide managers in deciding what the company's strategic intent should be. E. should support, but not conflict with, the performance targets of lower-level organizational units.
B.
In a single-business company, the strategy-making hierarchy consists of: A. business strategy, divisional strategies, and departmental strategies. B. business strategy, functional strategies, and operating strategies. C. business strategy and operating strategy. D. managerial strategy, business strategy, and divisional strategies. E. corporate strategy, divisional strategies, and departmental strategies.
B.
In evaluating proposed or existing strategies managers should A. initiate new initiatives even though they don't seem to match the company's internal and external situation. B. 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. C. evaluate the firm's business model at least every three years. D. ensure core capabilities are incorporated for establishing a competitive advantage. E. align existing strategies with new strategies to emphasize incremental gains.
B.
Management's blueprint for how and why the company's business approaches will generate revenues sufficient to cover costs and produce attractive profits and returns on investment A. best describes what is meant by a company's strategy. B. best describes what is meant by a company's business model. C. accounts for why a company's financial objectives are at the stated level. D. portrays the essence of a company's business purpose or mission. E. is what is meant by the term strategic intent.
B.
Perhaps the most important benefit of a vivid, engaging, and convincing strategic vision is: A. helping gain managerial consensus on what resources must be developed to successfully achieve strategic objectives. B. uniting company personnel behind managerial efforts to get the company moving in the intended direction. C. helping justify the company's mission of making a profit. D. helping company personnel understand the logic of the company's business model. E. keeping company personnel well-informed.
B.
Perhaps the most reliable way for a company to improve its financial performance over time is to: A. put 100 percent emphasis on the achievement of its short-term and long-term financial objectives. B. recognize that the achievement of strategic objectives signals that the company is well positioned to sustain or improve its performance. C. substitute financial intent for strategic intent and judiciously concentrate on the mission of making a profit. D. not allocate any resources to the achievement of strategic objectives until it is very clear that the company can meet or beat its stretch financial performance targets. E. avoid use of the balanced-scorecard philosophy since achievement of financial performance targets is obviously more important than the achievement of strategic performance targets.
B.
Strategic objectives: A. are more essential in achieving a company's strategic vision than are financial objectives. B. relate to strengthening a company's overall market standing and competitive position. C. are more difficult to achieve and harder to measure than financial objectives. D. are generally less important than financial objectives. E. help managers track an organization's true progress better than financial objectives.
B.
Strategy-making is: A. primarily the responsibility of key executives rather than a task for a company's entire management team. B. more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives. C. first and foremost the function and responsibility of a company's strategic planning staff. D. first and foremost the function and responsibility of a company's board of directors. E. first and foremost the function of a company's chief executive officer, who formulates strategic initiatives and submits them to the board of directors for approval.
B.
The key duties of a company's board of directors in the strategy-making, strategy-executing process include: A. coming up with compelling strategy proposals of their own to debate against those put forward by top management. B. overseeing the company's financial accounting and financial reporting practices and evaluating the caliber of senior executives' strategy-making/strategy-executing skills. C. taking the lead in developing the company's business model and strategic vision. D. taking the lead in formulating the company's strategic plan but then delegating the task of implementing and executing the strategic plan to the company's CEO and other senior executives. E. approving the company's operating strategies, functional-area strategies, business strategy, and overall corporate strategy
B.
The primary difference between a company's mission statement and the company's strategic vision is that: A. a mission statement explains why it is essential to make a profit, whereas the strategic vision explains how the company will be a moneymaker. B. a mission statement typically concerns a company's present business scope and purpose, whereas a strategic vision sets forth "where we are going and why." C. a mission deals with how to please customers, whereas a strategic vision deals with how to please shareholders. D. a mission statement deals with "where we are headed," whereas a strategic vision provides the critical answer to "how will we get there?" E. a mission statement addresses "how we are trying to make a profit today," while a strategic vision concerns "how will we make money in the markets of tomorrow?"
B.
The task of top executives when the company faces disruptive changes in its environment is to not only raise questions about the appropriateness of its direction and strategy, but also to: A. know when to continue with the present corporate culture and when to shift to a different and better corporate culture. B. ferret out the causes and decide when adjustments are needed and what adjustments are needed for improved performance and operating excellence. C. figure out whether to arrive at decisions quickly or slowly in choosing among the various alternative adjustments. D. decide whether to try to fix the problems of poor strategy execution or simply shift to a strategy that is easier to execute correctly. E. decide how to identify the problems that need fixing.
B.
What a company's top executives are saying about where the company is headed long term with respect to its future product-market-customer-technology mix: A. indicates what kind of business model the company is going to have in the future. B. constitutes the strategic vision for the company. C. signals what the firm's emergent strategy will be. D. serves to define the company's business plan. E. indicates what kind of products and services the company plans to offer in the future.
B.
Which of the following is NOT one of the managerial considerations in determining how to compete successfully? A. How can a company attract, keep, and please customers? B. How can a company modify its entire product line to emphasize its internal service attributes? C. How should a company respond to changing economic and market conditions?D. How should a company be competitive against rivals? E. How should a company position itself in the marketplace?
B.
Which of the following principal aspects should be included in managing the strategy execution process? A. describing the strategic course that will help the company prepare for the future B. organizing the company along the lines of best practice C. surveying employees on how they think costs can be reduced and how employee morale and job satisfaction can be improved D. exerting the external leadership needed to drive stabilization E. tying rewards and incentives directly to profit
B.
Why are crafting and executing business strategies the foremost tasks of any organization? A. Because they are necessary ingredients of a sound operational business model B. Because a good strategy coupled with a good strategy execution are the most telling signs of good management and allow a company to be a standout performer in the marketplace C. Because the management skills of top executives are sharpened as they work their way through the strategy-making, strategy-executing processes D. Because doing these tasks helps executives develop an appropriate strategic vision, strategic intent, and set of strategic objectives E. Because of the contribution they make to maximizing value for shareholders
B.
A company's strategic plan A. maps out the company's history. B. links the company's financial targets to control mechanisms. C. outlines the competitive moves and approaches to be used in achieving the desired business results. D. focuses on offering a more appealing product than rivals. E. lists methods of making money in its chosen business.
C.
A company's strategy stands a better chance of succeeding when A. it is developed through a collaborative process involving all managers and staff from all levels of the organization. B. managers employ conservative strategic moves based on past experience and form an underlying basis of control. C. it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals. D. managers copy the strategic moves of successful companies in its industry. E. managers focus on meeting or beating shareholder expectations.
C.
A creative and distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage A. is a reliable indicator that the company has a socially responsible business model. B. is achievable in emerging but not mature industries. C. is a company's most reliable ticket to above-average profitability. D. signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives. E. is the best indicator that the company's strategy and business model are well-matched and properly synchronized.
C.
A creative, distinctive strategy that delivers a sustainable competitive advantage is important because A. without a competitive advantage a company cannot become the industry leader. B. without a competitive advantage a company is likely to fall into bankruptcy. C. crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance. D. a competitive advantage is what enables a company to achieve its strategic objectives. E. how a company goes about trying to please customers and outcompete rivals is what enables senior managers to choose an appropriate strategic vision for the company.
C.
A winning strategy is one that A. builds strategic fit, is socially responsible, and maximizes shareholder wealth. B. is highly profitable and boosts the company's market share. C. fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance. D. results in a company becoming the dominant industry leader. E. can pass the ethical standards test, the strategic intent test, and the profitability test.
C.
Breaking down resistance to a new strategic vision typically requires that management, on an as needed basis: A. institute a Balanced Scorecard to measuring company performance, with the "balance" including a mixture of both old and new performance measures. B. inform company personnel about forthcoming changes in the company's strategy. C. reiterate the company's need for the new direction, while addressing employee concerns head-on, calming fears, lifting spirits, and providing them with updates and progress reports as events unfold. D. explain all updates and merits of the company's business model to align strategy with employee concerns. E. raise wages and salaries to win the support of company personnel for the company's new direction.
C.
Corporate strategy for a diversified or multi-business enterprise: A. is orchestrated by mid-level managers and focuses on how to create a competitive advantage in each specific line of business the total enterprise is in. B. concerns how best to allocate resources across the departments of each line of business the company is in. C. is orchestrated by senior corporate executives and centers around the kinds of initiatives the company uses to establish business positions in different industries. D. deals chiefly with what the strategic intent of each of its business units should be. E. involves how functional strategies should be aligned with business strategies in each of the various lines of business the company is in.
C.
Crafting a deliberate strategy involves developing strategy elements that A. imitate as much of the market leader's strategy as possible so as not to end up at a competitive disadvantage. B. comprise a five-year strategic plan that is then fine-tuned during the remainder of the plan period; big changes in strategy are thus made only once every five years. C. consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods. D. deliberately eliminate the ongoing strategic elements and implement new planned initiatives. E. consist of adaptive change plans to new market situations along with abandoned redundant ongoing elements.
C.
Crafting and executing a strategy is a top-priority managerial task because A. it helps management create tight fits between a company's strategic vision and business model. B. it allows all company personnel, and especially senior executives, to know the answer to "who are we, what do we do, and where are we headed?" C. it is management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance. D. it provides clear guidance as to what the company's business model and strategic intent are, and helps keep managerial decision-making from being rudderless. E. it establishes how well executives perform these tasks and are the key determinants of executive compensation.
C.
In the strategy-making, strategy-executing process, effective corporate governance requires a company's board of directors to: A. play the lead role in forming the company's strategy and then directly supervising the efforts and actions of senior executives in implementing and executing the strategy. B. provide guidance and counsel to the CEO in carrying out his/her duties as chief strategist and chief strategy implementer. C. oversee the company's strategic direction, evaluate the caliber of senior executives' skills, handle executive compensation, and oversee financial reporting practices. D. work closely with the CEO, senior executives, and the strategic planning staff to develop a strategic plan for the company and then oversee how well the CEO and senior executives carry out the board's directives in implementing and executing the strategic plan. E. review and approve the company's business model and also review and approve the proposals and recommendations of the CEO as to how to execute the business model.
C.
Operating strategies are primarily concerned with: A. what the firm's operating departments are doing and plan to do to unify the company's functional and business strategies. B. the specific plans for building competitive advantage in each major department and operating unit. C. how to manage initiatives of strategic significance within each functional area, and adding detail and completeness in ways that support functional strategies and the overall business strategy. D. how best to carry out the company's corporate strategy. E. how best to implement and execute the company's different business-level strategies.
C.
Strategic intent refers to a situation where a company: A. commits to using a particular business model to make money. B. decides to adopt a particular strategy. C. relentlessly pursues an ambitious strategic objective. D. commits to pursuing balanced-scorecard objectives. E. changes its long-term direction and decides to pursue a newly adopted strategic vision.
C.
Which of the following questions can be used to distinguish a winning strategy from a mediocre or losing strategy? A. How good is the company's business model? B. Is the company a technology leader? C. Does the company have low prices in comparison to rivals? D. Is the company putting too little emphasis on behaving in an ethical and socially responsible manner? E. How well does the strategy fit the company's situation?
E.
The leadership challenges that top executives face in making corrective adjustments when things are not going well include: A. knowing when to replace poorly performing subordinates and when to do a better job of coaching them to do the right things. B. being able to discern whether to promote better achievement of strategic performance targets or whether to promote better achievement of financial performance targets. C. deciding when adjustments are needed and what adjustments to make. D. having the analytic skills to separate the problems due to a bad strategy from the problems due to bad strategy execution. E. deciding whether the company would be better off making adjustments that curtail the achievement of strategic objectives or that curtail the achievement of financial objectives.
C.
The most significant signs of a well-managed company are A. the eagerness with which executives set stretch financial and strategic objectives and develop an ambitious strategic vision. B. aggressive pursuit of new opportunities and a willingness to change the company's business model whenever circumstances warrant. C. good strategy-making combined with good strategy execution. D. a visionary mission statement and a willingness to pursue offensive strategies rather than defensive strategies. E. a profitable business model and a balanced scorecard approach to measuring the company's performance.
C.
The real purpose of the company's strategic vision: A. lays out how management plans to implement and execute a profitable business model. B. describes what business the company is presently in and why it has chosen certain operating practices to meet the needs of customers. C. serves as management's tool for giving the organization a sense of direction. D. defines "who we are and what we do." E. spells out a company's strategic intent, its strategic and financial objectives, and the business approaches and operating practices that will underpin its efforts to achieve sustainable competitive advantage.
C.
The strategy-making, strategy-executing process is shaped by: A. management's strategic vision, strategic and financial objectives, and strategy. B. the decisions made by the compensation and audit committees of the board of directors. C. external factors such as the industry's economic and competitive conditions and internal factors such as the company's collection of resources and capabilities. D. the challenges of developing a sound business model. E. top executives and the board of directors; very few managers below this level are involved in the process.
C.
What does a company specifically exhibit when it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective? A. competitive edge B. sustainable advantage C. strategic intent D. financial strength E. strategic vision
C.
Which of the following ARE common shortcomings of company vision statements? A. too specific and too flexible B. unrealistic, unconventional, and un-businesslike C. too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on superlatives D. too graphic, too narrow, and too risky E. not customer-driven, out of step with emerging technological trends, and too ambitious
C.
Which of the following are characteristics of an effectively worded strategic vision statement? A. balanced, responsible, and rational B. challenging, competitive, and "set in concrete" C. graphic, directional, and focused D. realistic, customer-focused, and market-driven E. achievable, profitable, and ethical
C.
Which of the following is NOT a frequently used strategic approach to set a company apart from rivals and achieve a sustainable competitive advantage? A. striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage B. outcompeting rivals on the basis of differentiating features such as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority, or unusually good value for the money C. simply trying to mimic the successful strategies of rivals D. focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of satisfying the needs and tastes of buyers comprising the niche E. developing a cost advantage based on offering more value for the money
C.
Which of the following is the best example of a well-stated strategic objective? A. Increase revenues by more than the industry average. B. Be among the top five companies in the industry in customer service. C. Overtake key competitors on product performance or quality within three years. D. Improve manufacturing performance by 5 percent within 12 months. E. Obtain 150 new customers during the current fiscal year.
C.
A company needs performance targets or objectives: A. to help guide managers in deciding what strategic path to take in the event that a strategic inflection point is encountered. B. because they give the company clear-cut strategic intent. C. in order to unify the company's strategic vision and business model. D. for its operations as a whole and also for each of its separate businesses, product lines, functional departments, and individual work units. E. in order to prevent lower-level organizational units from establishing their own objectives.
D.
A company that pursues and achieves strategic objectives: A. is likely to weaken the achievement of its short-term and long-term financial objectives. B. believes that the company's financial performance is not as important as it really is. C. is generally not strongly focused on its true mission of making a profit. D. is frequently in a better position to improve its future financial performance because of the increased competitiveness that flows from the achievement of strategic objectives. E. is likely to be a weak financial performer because diverting resources to the pursuit of strategic objectives takes away from the achievement of financial performance targets.
D.
A company's strategy is a "work in progress" and evolves over time because of the A. importance of developing a fresh strategic plan every year that keeps employees from becoming bored with executing the same strategy year after year. B. ongoing need to imitate the new strategic moves of the industry leaders. C. need to make regular adjustments in the company's strategic vision. D. ongoing need of company managers to react and respond to changing market and competitive conditions. E. frequent need to modify key elements of the company's business model.
D.
A company's values or core values concern: A. whether and to what extent it intends to operate in an ethical and socially responsible manner. B. how aggressively it will seek to maximize profits and enforce high ethical standards. C. the beliefs and operating principles built into the company's "balanced scorecard" for measuring performance. D. the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission. E. the beliefs, principles, and ethical standards that are incorporated into the company's strategic intent and business model.
D.
A winning strategy is one that A. builds strategic fit, is socially responsible, and maximizes shareholder wealth. B. is highly profitable and boosts the company's market share. C. results in a company becoming the dominant industry leader. D. fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance. E. can pass the ethical standards test, the strategic intent test, and the profitability test.
D.
Good strategy combined with good strategy execution A. offers a sure fire guarantee for avoiding periods of weak financial performance. B. is the best sign that a company is a true industry leader. C. is a more important management function than forming a strategic vision combined with setting objectives. D. is the clearest indicator of good management. E. signals that a company has the best business model in a market.
D.
In a diversified company, the strategy-making hierarchy consists of: A. corporate strategy and a group of business strategies (one for each line of business the corporation has diversified into). B. corporate or managerial strategy, a set of business strategies, and divisional strategies within each business. C. business strategies, functional strategies, and operating strategies. D. corporate strategy, business strategies, functional strategies, and operating strategies. E. its diversification strategy, its line of business strategies, and its operating strategies.
D.
In crafting a company's strategy, managers A. face the biggest challenge of how closely to replicate strategies of successful companies in the industry. B. have comparatively little freedom in choosing the "hows" of strategy. C. are wise not to decide on concrete courses of action in order to preserve maximum strategic flexibility. D. need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals. E. are well-advised to be risk-averse and develop a "conservative" strategy—"dare-to-be-different" strategies are rarely successful.
D.
It is normal for a company's strategy to end up being A. a blend of offensive actions on the part of managers to improve the company's profitability and defensive moves to counteract changing market conditions. B. a combination of conservative moves to protect the company's market share and somewhat more risky initiatives to set the company's product offering apart from rivals. C. a close imitation of the strategy employed by the recognized industry leader. D. a blend of proactive actions to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions. E. more a product of clever entrepreneurship than of efforts to clearly set a company's product/service offering apart from the offerings of rivals.
D.
Strategy, at its essence, is about A. matching rival businesses' products and quality dimensions in the marketplace. B. building profits for short-term success. C. realigning the market to provoke change in rival companies. D. developing lasting success that can support growth and secure the company's future over the long term. E. re-creating a business model with regularity.
D.
The customer value proposition lays out the company's approach to A. meeting profitability guidelines without the risk of losing customers. B. operating efficiently given the current level of customers. C. embracing rival company approaches to gaining customers. D. satisfying customer wants and needs at a price customers will consider a good value. E. assuring that the company makes enough profits based on its per-unit cost.
D.
The difference between a company's strategy and a company's business model is that A. a company's strategy is management's game plan for achieving strategic objectives while its business model is management's game plan for achieving financial objectives. B. the strategy concerns how to compete successfully and the business model concerns how to operate efficiently. C. a company's strategy is management's game plan for realizing the strategic vision, whereas a company's business model is the game plan for accomplishing its corporate responsibility goals. D. strategy relates broadly to a company's competitive moves and business approaches while its business model relates to whether the revenues flowing from the strategy are sufficient to cover costs and realize a profit. E. a company's strategy is solely concerned with how to please customers while its business model is solely concerned with how to please shareholders.
D.
The managerial task of developing a strategic vision for a company: A. concerns deciding what approach the company should take to implement and execute its business model. B. entails coming up with a fairly specific answer to "who are we, what do we do, and why are we here?" C. is chiefly concerned with addressing what a company needs to do to successfully outcompete rivals in the marketplace. D. involves deciding upon what strategic course a company should pursue in preparing for the future and why this directional path makes good business sense. E. entails coming up with a concrete plan for how the company intends to make money.
D.
The pattern of actions and business approaches that would NOT define a company's strategy include actions to A. strengthen market standing and competitiveness by acquiring or merging with other companies. B. strengthen competitiveness via strategic coalitions and partnerships. C. upgrade competitively important resources and capabilities. D. gain sales and market share with lower prices despite increased costs. E. strengthen the firm's bargaining position with suppliers and distributors.
D.
What separates a powerful strategy from a run-of-the-mill or ineffective one? A. the ability of the strategy to keep the company profitable B. the proven ability of the strategy to generate maximum profits C. the speed with which it helps the company achieve its strategic vision D. management's ability to forge a series of actions, both in the marketplace and internally, that sets the company apart from rivals and produces sustainable competitive advantage E. whether it allows the company to maximize shareholder value in the shortest possible time.
D.
Which of the following questions tests the merits of the firm's strategy and distinguishes it as a winning strategy? A. Is the company's strategy ethical and socially responsible and does it put enough emphasis on good product quality and good customer service? B. Is the company putting too little emphasis on growth and profitability and too much emphasis on behaving in an ethical and socially responsible manner? C. Is the strategy resulting in the development of additional competitive capabilities? D. Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance? E. Does the strategy strike a good balance between maximizing shareholder wealth and maximizing customer satisfaction?
D.
Which of the following statements about a company's strategy is true? A. A company's strategy is mostly hidden to outside view and is deliberately kept under wraps by top-level managers (so as to catch rival companies by surprise when the strategy is launched). B. A company's strategy is typically planned well in advance and usually deviates little from the planned set of actions and business approaches because of the risks of making on-the-spot changes. C. A company's strategy generally changes very little over time unless a newly appointed CEO decides to take the company in a new direction with a new strategy. D. A company's strategy is typically a blend of proactive and reactive strategy elements. E. A company's strategy is developed mostly on the fly because of the constant efforts of managers to come up with fresh moves to keep the company's product offering clearly different and set apart from the product offerings of rival companies.
D.
Why is it important to craft a business model? A. Because it sets forth management's game plan for maximizing profits for shareholders. B. Because it details exactly how management's strategy will result in the achievement of the company's strategic intent. C. Because it is a part of an operating model that focuses on delivering excellence and creating value for external shareholders and internal labor force. D. Because it sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner. E. Because it sets forth management's long-term action plan to match the business standards set by formidable rivals.
D.
A "balanced scorecard" for measuring company performance: A. entails putting equal emphasis on financial and strategic objectives. B. entails putting balanced emphasis on profit and non-profit objectives. C. prevents the drive for achieving financial objectives from overwhelming the pursuit of strategic objectives. D. prevents the drive for achieving strategic objectives from overwhelming the pursuit of financial objectives. E. strikes a "balance" between financial and strategic objectives.
E.
A company's overall strategy: A. determines whether its strategic intent is proactive or reactive. B. is subject to being changed much less frequently than either its objectives or its mission statement and thus serves as the base of its strategy-making pyramid. C. should be based on a flexible strategic vision and strategic intent. D. is customarily reviewed and approved level-by-level by the company board of directors. E. is really a collection of strategic initiatives and actions devised by managers and key employees up and down the whole organizational hierarchy.
E.
Adopting a set of "stretch" financial and "stretch" strategic objectives: A. pushes the company to strive for lesser but adequate profitability levels, because the stretch objectives are considered unattainable. B. is a widely held method for creating a "scorecard" for monitoring company performance. C. helps convert the mission statement into meaningful company values. D. challenges company personnel to execute the strategy with greater enthusiasm, proficiency, and understanding. E. is an effective tool for pushing the company to perform at its full potential and deliver the best possible results.
E.
In the course of crafting a strategy, which of the following is NOT a common management function? A. abandoning certain strategy elements that have grown stale or become obsolete B. modifying the current strategy when market and competitive conditions take an unexpected turn or some aspects of the company's strategy hit a stone wall C. modifying the current strategy in response to the fresh strategic maneuvers of rival firms D. taking proactive actions to improve this or that piece of the strategy E. sharing the strategy with the public to gain additional customer and shareholder support
E.
Management is obligated to monitor new external developments, evaluate the company's progress, and make corrective adjustments in order to: A. determine whether the company has a balanced scorecard for judging its performance. B. stay on track in achieving the company's mission and strategic vision. C. keep the company's board of directors well-informed about the company's future outlook. D. determine whether the company's business model is well-matched to changing market and competitive circumstances. E. decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods.
E.
Managers must be prepared to modify their strategy in response to all of the following EXCEPT A. changing circumstances that affect performance and the desire to improve the current strategy. B. competitor moves in the market and shifting needs of buyers. C. stagnating market and restrictive industrial opportunities. D. mounting evidence that the strategy is less effective. E. public pronouncements from rivals about monthly profit margins.
E.
Masterful strategies come from: A. successful managerial efforts to develop a sound strategic vision. B. doing a very thorough job of strategic planning. C. involving as many company personnel as possible in the strategy-making process. D. crafting a strategy that mimics the best parts of the strategies of the industry leaders. E. doing things differently from competitors where it counts rather than running with the herd.
E.
The heart and soul of a company's strategy-making effort is determining how to A. become the industry's low-cost provider. B. maximize profits and shareholder value. C. improve the efficiency of its business model. D. maximize profits while simultaneously operating in a socially responsible manner that keeps the company's prices as low as possible. E. come up with moves and actions that produce a durable competitive edge over rivals.
E.
The primary role of a functional strategy is to: A. unify the company's various operating-level strategies. B. specify how to build and strengthen the skills, expertise, and competencies needed to execute operating-level strategies successfully. C. support and add power to the corporate-level strategy. D. create compatible degrees of strategic intent among a company's different business functions. E. determine how to support particular activities in ways that support the overall business strategy and competitive approach.
E.
To improve performance, there are many different avenues for outcompeting rivals such as A. realizing a higher cost structure and lower operating profit margins than rivals in order to drive sales growth. B. creating products analogous with competitors so as to be competitive in the same markets. C. pursuing similar personalized customer service or quality dimensions as rivals. D. being undecided whether or not to concentrate operations on local versus global markets. E. strengthening competitiveness by pursuing strategic alliances and collaborative partnerships.
E.
Which of the following companies would have the LEAST bargaining power with its suppliers? A. a company that is involved in mass production of goods to cater to its expanding customer base B. a company that actively caters to a broad price-sensitive customer base C. a company that generates high quality product components from easily available raw materials for a broad customer base D. a company whose products are highly popular and easily available across most supermarkets E. a company that offers high-cost specialized products that could be used only by customers of a certain age group
E.
Which of the following is NOT a frequently used strategic approach to set a company apart from rivals and achieve a sustainable competitive advantage? A. striving to be the industry's low-cost provider B. outcompeting rivals on the basis of differentiating features that will appeal to a broad spectrum of buyers C. developing a best-cost provider strategy that gives customers more value for the money D. focusing on a narrow market niche and serving buyers' special needs and tastes E. striving to be the industry's high-price provider
E.
Which of the following is a seldom used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? A. striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage B. outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, or technological superiority C. developing competitively valuable resources and capabilities that rivals can't easily match, copy, or trump with capabilities of their own D. focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche E. copying the attributes of a popular product or service
E.
Which of the following is not an element of a company's business strategy? A. actions to respond to changing market conditions or other external factors B. actions to strengthen competitiveness via strategic alliances and collaborative partnerships C. actions to strengthen internal capabilities and competitively valuable resources D. actions to manage the functional areas of the business E. management's actions to revise the company's financial and strategic performance targets
E.
Winning a sustainable competitive edge over competitors does NOT hinge on which of the following? A. having a distinctive competitive product offering B. building competitively valuable expertise and capabilities not readily matched, and offering distinctive products C. building experience, know-how, and specialized capabilities that have been perfected over a long period of time D. having "hard-to-beat" capabilities and impressive product innovation E. building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost
E.