Strategy Quiz Questions

Value chain activities that are far less obvious to outsiders and competitors, and therefore far more difficult to imitate are ________activities. a. Primary b. Support c. Transactional d. data-driven

b. Support

When the link between a company's resources and its competitive advantage is poorly understood, a state of ________________ exists. a. Causal ambiguity b. Market uncertainty c. Poor management d. Strategic uncertainty e. None of the above.

a. Causal ambiguity

Which of the following statements about competition and rivalry is TRUE? a. Competition on price occurs when there is rivalry within an industry. b. High switching costs increase rivalry c. The competition in the luxury goods industries will always be fiercer than it will in commodities d. There is little competition in industries in which growth is slow e. Tacit collusion leads generally to more intense competition

a. Competition on price occurs when there is rivalry within an industry.

More often than not those resources that cannot be imitated involve unobservable routines, processes, or coordinating efforts that are "behind the scenes." a. True b. False

a. True

Ordinary resources must be developed at least as well as the standard for the industry. a. True b. False

a. True

The value created by a firm is distributed among a number of stakeholders. a. True b. False

a. True

The stage of the strategic management process in which one examines the industry where he or she wishes to compete and looks carefully inside the company to understand its unique competitive strengths and how it organizes its activities is called strategic a. Formulation b. Evaluation c. Analysis d. Implementation e. None of the above

c. Analysis

Value creation in the mature stage of the industry life cycle is largely focused internally on a. Price reductions b. Reorganization c. Cost efficiency d. Reducing employee turnover.

c. Cost efficiency

Porter's Five Forces Framework is used for industry analysis in all of the following ways EXCEPT to: a. Identify opportunities to increase profit. b. Decide whether to enter or exit the market c. Identify intangible assets that are crucial for competing successfully in a given industry d. Identify which market niche to penetrate e. Complete a strengths, weaknesses, opportunities, threats (SWOT) analysis

c. Identify intangible assets that are crucial for competing successfully in a given industry

10. Industries mature when demand begins to slow down. Often this is because the market is _____________, meaning there are few new customers to bring into the industry. a. Soft b. Volatile c. Saturated d. Standardized

c. Saturated

How might consumer information websites increase the intensity of competitive rivalry? a. by shifting customers away from issues of price b. by making competitors in cyberspace seem less equally balanced c. by consolidating the marketing message that consumers use to make a purchase d. by highlighting a firm's unique selling advantages e. by decreasing the power of the buyer

c. by consolidating the marketing message that consumers use to make a purchase

The business-level strategy that implies a broad market approach where the activities performed set the company apart from its rivals in a meaningful way such that customers may be willing to pay higher prices is called a ______________strategy. a. dynamic b. high price c. differentiation d. value creation

c. differentiation

The options for attacking cost disadvantages in the distribution portion of the industry value chain include: a. shifting to a more economical distribution strategy, including the possibility of forward integration. b. trying to make up the difference by initiating cost savings earlier in the value chain. c. pushing for more favorable terms with distributors and other forward channel allies. d. All of these. e. None of these; the most effective option is to shift to a new strategy and to cut price to offset cost disadvantage.

d. All of these.

Industries evolve through life cycle stages because a. Firms develop new knowledge about how to create value b. Demand for the industry's products and services grow c. Companies constantly enter and leave the industry d. Both A and B above are fundamental determinants of industry evolution

d. Both A and B above are fundamental determinants of industry evolution

Which of the following examples demonstrates how successful organizations manage their primary activities? a. Motorola has revised its compensation system to reward employees who learn in a variety of skills. b. Walmart implemented a sophisticated information system that resulted in reduced inventory carrying costs and shortened customer response times. c. National Steel improved its efficiency by consolidating, reducing the number of job classifications, and broadening worker responsibilities. d. Reorganizing how washers and dryers are stored in warehouses and locating new distribution centers has enabled Whirlpool to cut costs and achieve faster customer deliveries. e. None of these examples actually address primary activities.

d. Reorganizing how washers and dryers are stored in warehouses and locating new distribution centers has enabled Whirlpool to cut costs and achieve faster customer deliveries.

The overall process for how a company makes decisions on how to recognize opportunities, allocate resources, and organize activities is known as a. Value Creation b. Management by objectives c. Opportunity Recognition d. Strategy e. None of the above

d. Strategy

If one person can be identified with certainty as the resource behind the success of a company and she or he is hired away by another company, the VRIST framework dimension of _________is being illustrated. a. Imitation b. Substitution c. Rareness d. Tradability

d. Tradability

On which characteristic of resources hangs all the law and profit? i.e., which must take precedent over all other tests? a. S- Not substitutable b. I- Not Imitable c. R- Rare d. V- Valuable e. T- Not tradable

d. V- Valuable

Which of the following is the best example of an intangible resource? a. a high-traffic retail location b. a large cash reserve c. a good merchandise mix d. a company's brand

d. a company's brand

9. Innovation results in a wide variety of products or services in the introduction stage of the industry life cycle because a. early entrants are trying to figure out which bundle of characteristics customers prefer. b. economic theory tells us that customers always receive the greatest utility from the highest number of product choices possible. c. venture capitalists have funded companies with a variety of business models. d. None of the above explains why innovation results in a wide variety of products or services

a. early entrants are trying to figure out which bundle of characteristics customers prefer.

Drivers of an effective differentiation strategy include a. product and service features. b. the cost-efficient production of a commodity. c. the relative importance of search goods in the industry. d. economies of scale.

a. product and service features.

11. The rivalry among competing firms tends to be weaker a. when demand for the product is growing rapidly b. when products/services are weakly differentiated such that customers have low switching costs c. when they are tempted to use price cuts or other marketing tactics to boost unit volume instead of advancing the technology and making new-generation products have better quality d. when rival firms all belong to the same strategic group and also have comparable priorities, resources, and corporate cultures e. none of the above adequately describes when rivalry will be weaker

a. when demand for the product is growing rapidly

In which of the following cases would you recommend that the business use a low-cost strategy? a. A restaurant that proposes to offer a fine dining experience. b. A farmer who produces soybeans to be sold at the market price. c. A maker of high-performance computers designed to appeal to gamers. d.A plastic surgeon who opens a solo practice for celebrities.

b. A farmer who produces soybeans to be sold at the market price.

Metrics comprise only qualitative measures by which a firm can evaluate the effectiveness of its business strategy. a. True b. False

b. False

Patents, copyrights, and trademarks reveal information about a resource that makes it easier for a rival to imitate that resource. a. True b. False

b. False

Which of the following is a potential SWOT analysis drawback? a. It results in a concise list of items across the four categories. b. It provides a static view of the firm. c. It unambiguously distinguishes between strengths and weaknesses. d. All of the above are potential SWOT analysis drawbacks.

b. It provides a static view of the firm.

Which of the following is a driver that permits a low-cost strategy to be successful? a. When there are high industry entry barriers, diminishing the potential need for incumbents to compete on price. b. When there is a standardization of products or services among industry rivals. c. When buyers and suppliers have weak bargaining power, lowering the pressure on the industry's profit margins. d. When customers tend to expect different features and benefits from products within a category.

b. When there is a standardization of products or services among industry rivals.

When selecting activities to outsource, firms should select activities that a. are critical to their success b. are non-strategic capabilities c. capture and create value d. neutralize external threats

b. are non-strategic capabilities

Sets of tightly integrated activities, organizational skills, and internally developed routines that rely on extraordinary resources are called a. business processes. b. capabilities. c. structural phenomena. d. innovation. e. None of the above.

b. capabilities.

Leveraging extraordinary resource positions may be accomplished by a. offshoring labor-intensive operations. b. extending the current business model into additional products or customer segments. c. adopting capabilities based on extraordinary resources that are used by competitors. d. increasing the amount of debt used in the capital structure of the organization.

b. extending the current business model into additional products or customer segments.

THE outcome or end-result of a great strategy is a) customer satisfaction. b) Environmental sustainability. c) value creation and superior performance. d)a monopolistic market position.

c) value creation and superior performance.

Value chain analysis a. is a tool for identifying how a firm's internal operating costs compare with the averages of the costs of other firms in the industry for each of several production activities. b. helps identify an industry's key success factors. c. indicates whether it is more advantageous to pursue a differentiation strategy or to strive for low-cost leadership. d. is a tool for identifying the separate activities, functions, and business processes that a company performs in designing, producing, marketing, distributing, and supporting a product or service. e. is a tool for helping managers ascertain whether the company is doing a good job of building shareholder value through the internal activities it performs.

d. is a tool for identifying the separate activities, functions, and business processes that a company performs in designing, producing, marketing, distributing, and supporting a product or service.

Typical barriers to entry include: a. Restrictive government policies b. High barriers to exit c. Economies of scope d. Key locations that are crucial for a business (e.g., access to natural resources.) e. All of the answers are correct

e. All of the answers are correct

The critical need in business to identify and exploit where the market is heading is called a. Value chain analysis b. Business Forecasting c. Technological Entrepreneurship d. Value Creation e. None of the above

e. None of the above

A differentiation strategy enables a business to address the five competitive forces by a. serving a broader market segment. b. having brand-loyal customers become more sensitive to prices. c. increasing economies of scale. d. increasing competitive rivalry in an advantageous manner. e. lessening competitive rivalry by distinguishing itself.

e. lessening competitive rivalry by distinguishing itself.