4860 - 2
A firm pursuing a best-cost provider strategy A seeks to offer more value-adding features than the industry's low-cost providers and lower prices than those pursuing differentiation. B tries to have the best cost (as compared to its rivals) for each activity in the industry's value chain. C achieves competitive advantage because its operating activities are "best-in-class" or "best-in-world." D follows a hybrid strategy based upon superior resources and a narrow market niche. E seeks a "middle of the road" strategic approach that attempts to satisfy the product or service needs of consumers with average household incomes.
A
A focused low-cost strategy A involves serving buyers in the target market niche at a lower cost and a lower price than rival competitors. B is the hardest of the four generic types of competitive strategies to employ successfully. C involves the use of deep price discounting to capture customers. D entails trying to wrest market share away from rivals via extra advertising, above-average expenditures for promotional programs, and heavy use of point-of-sale merchandising techniques. E cannot be sustained over time unless the focuser is aggressive in entering other segments where it also can achieve a low-cost advantage.
A
Experience indicates that strategic alliances A have a high "divorce rate." B are generally successful. C work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency. D work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies. E are rarely useful in helping a company win the race for global industry leadership and establish positions in industries of the future.
A
In which of the following situations is being first to initiate a particular move not likely to result in a positive payoff? A When potential buyers are skeptical about the benefits of a new technology or product being pioneered by a first mover B When potential buyers are skeptical about the benefits of a new technology or product being pioneered by a first mover C When first-time buyers remain strongly loyal to a pioneering firm in making repeat purchases D When moving first can constitute a preemptive strike, making imitation extra hard or unlikely E When moving first can result in a cost advantage over rivals
A
SWOT analysis A is a simple but powerful tool for sizing up a company's internal strengths and competitive deficiencies, its market opportunities, and the external threats to its future well-being. B is a tool for benchmarking whether a firm's strategy is closely matched to industry key success factors. C reveals whether a company is competitively stronger than its closest rivals. D examines the company's cost position activity by activity. E is a competitive intelligence tool that discloses rivals' key weaknesses.
A
Striving to be the low-cost provider is a particularly attractive competitive strategy when A managers must launch a concerted, ongoing effort to ferret out cost-saving opportunities in every part of the value chain, for example, cost drivers such as number of products in the product line, capacity utilization, production technology and design, and labor productivity and compensation costs. B most rivals are trying to differentiate their product offering from those of rivals. C there are many ways to achieve higher product quality that have value to buyers. D buyers are not swayed by advertising and are not very brand loyal. E most rivals are pursuing best-cost or broad differentiation strategies.
A
Vertical integration strategies A extend a company's competitive and operating scope because its operations extend across more parts of the total industry value chain. B are one of the best strategic options for helping companies win the race for global market leadership. C are a cost-effective means of expanding a company's lineup of products and services. D are particularly effective in boosting a company's ability to expand into additional geographic markets, particularly the markets of foreign countries. E are a good strategy option for improving a company's supply chain management capabilities, pursuing efforts to remodel a company's value chain, achieving direct control over the costs of performing value chain activities, and gaining access to buyers.
A
Which of the following instances does not exemplify when a late-mover advantage arises? A Property rights protections in the form of patents, copyrights, and trademarks prevent the ready imitation of initial moves. B Rapid market evolution gives fast followers the opening to leapfrog a first mover's products with more attractive next-version products. C Market uncertainties make it difficult to ascertain what will eventually succeed. D Products of an innovator are simple, do not need a high customer understanding, and easily penetrate the market. E Pioneering helps build a firm's reputation with buyers and creates brand loyalty.
A
Which of the following is not a strategic disadvantage of vertical integration? A It greatly reduces the opportunity for capturing maximum scale economies and achieving the lowest possible operating costs. B Vertical integration increases a firm's capital investment in the industry. C Integrating into more industry value chain segments increases business risk if industry growth and profitability sour. D Vertically integrated companies are often slow to embrace technological advances or more efficient production methods when they are saddled with older technology or facilities. E Integrating backward potentially results in less flexibility in accommodating shifting buyer preferences when a new product design does not include parts and components that the company makes in-house.
A
Which of the following is not an advantage of outsourcing the performance of certain value chain activities to outsiders? A Being able to reduce distribution costs by eliminating the use of wholesale distributors and retail dealers and, instead, selling directly to end-users at the company's website B Allowing a company to reduce its costs if the activity is not crucial to the firm's ability to achieve sustainable competitive advantage and will not hollow out its capabilities, core competencies, or technical know-how C Improving organizational flexibility and speeding time to market D Allowing 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 Being able to reduce the company's risk exposure to changing technology and/or buyer preferences
A
Which of the following is not an example of an external threat to a company's future profitability? A Lack of a distinctive competence B Potential of a hostile takeover C Adverse changes in foreign exchange rates D Unfavorable demographic shifts E Introduction of restrictive trade policies in countries where the company does business
A
Which of the following is not an option to improve the efficiency and effectiveness of internally performed value chain activities? A Insist on across-the-board cost cuts in all value chain activities—those performed by suppliers, those performed in-house, and those performed by distributors-dealers. B Adopt best practices for quality, marketing, and customer service. C Reallocate resources to activities that address buyers' most important purchase criteria, which will have the biggest impact on the value delivered to the customer. D Adopt new technologies that spur innovation, improve design, and enhance creativity. E Implement best practices throughout the company, particularly for high-cost activities.
A
_________ is identifying and appraising a company's resource strengths and weaknesses and its external opportunities and threats. A SWOT analysis B Competitive asset/liability analysis C Competitive positioning analysis D Strategic resource assessment E Company resource mapping
A
Broad differentiation strategies generally work best in market circumstances where A buyer needs and preferences are too diverse to be fully satisfied by a standardized product. B most buyers have similar needs and use the product in similar ways. C the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart. D buyers are price sensitive and buying switching costs are quite low. E the five competitive forces are strong.
A Differentiation good when: Buyer need/use=diverse, many ways to differ that buyer value, few rivals doing same, tech change fast.
A company's cost competitiveness is largely a function of A whether it does a good enough job of benchmarking its value chain activities against the value chains of competitors so that it knows exactly how low to drive its costs to be cost-competitive. B how efficiently it manages its internally performed value chain activities and the costs in the value chains of its suppliers and forward channel allies. C whether it possesses a better job of building its resource strengths more cost effectively than rivals. D whether it possesses more core competencies and competitive capabilities than its rivals. E how closely its internally performed activities are linked to the activities performed by suppliers and to the activities performed by forward channel allies.
B
A company's value chain consists of A the activities a company performs in converting its resource weaknesses into resource strengths. B the collection of activities it performs in the course of designing, producing, marketing, delivering, and supporting its product or service. C those activities a company performs that represent "best practices." D the activities that a company performs in developing a distinctive competence. E the activities that represent a company's competencies, core competencies, distinctive competencies, and competitive capabilities.
B
A resource-based strategy A is often based on cross-department combinations of intellectual capital and expertise. B uses a company's valuable and rare resources and competitive capabilities to deliver value to customers that rivals have difficulty matching. C is typically based on a stand-alone resource strength such as technological expertise. D refers to a company's most efficiently executed value-chain activity. E uses industry key success factors to provide a company with a core competence that rivals cannot effectively imitate.
B
Among the purposes of defensive strategies are to A aggressively retaliate against rivals pursuing offensive strategies and prevent price wars. B restrict a competitive attack by a challenger, weaken the impact of any attack that occurs, and influence challengers to aim their offensive efforts at other rivals. C guard against adverse changes in the company's macro-environment and insulate the company from the impact of industry-driving forces. D strengthen a company's competitive advantage and reduce its exposure to business risk. E eliminate a company's resource weaknesses and competitive deficiencies, thereby making it invulnerable to competitive attack from would-be challengers.
B
Every organization has many resources, capabilities, and routines; however, those few things the company does really well and performs with a very high proficiency are termed A core competencies B distinct capabilities C sustainable activities D socially complex activities E distributive factors
B
First-mover advantages are unlikely to be present in which one of the following instances? A When first-time customers remain strongly loyal to pioneering firms in making repeat purchases B When rapid market evolution (due to fast-paced changes in technology or buyer preferences) presents opportunities to leapfrog a first-mover's products with more attractive next-version products C When moving first can constitute a preemptive strike, making imitation extra hard or unlikely D When pioneering helps build a firm's image and reputation with buyers E When early commitments to new technologies, new-style components, new or emerging distribution channels, and so on can produce an absolute cost advantage over rivals
B
Identifying the strategic issues and challenges that company managers need to address does not involve A developing a "worry list" of "how to ...," "whether to ...," and "what to do about ..." B assessing the diversification moves of corporations competing in similar industries. C assessing what challenges the company has to overcome in order to be financially and competitively successful in the short-run. D drawing on what was learned from having analyzed the company's industry and competitive environment. E drawing on evaluations of the company's own resources, internal circumstances, and competitiveness.
B
Resource and capability analysis is a powerful tool for A justifying the expenditures on state-of-the-art manufacturing plants and equipment, efficient distribution facilities, attractive real estate locations, or ownership of valuable natural resource deposits. B sizing up the company's competitive assets and determining whether they can provide the foundation necessary for competitive success in the marketplace. C insulating a company against the combined impact of the industry's driving forces and industry key success factors. D assessing the value of a company's primary competitor's core competencies and R&D investments. E showing how much profit is earned on each dollar spent on R&D as well as the number of competitive assets in comparison to the market leader.
B
Successful differentiation allows a firm to A gain buyer loyalty to its brand (because some buyers are strongly attracted to the differentiating features and bond with the company and its products). B gain buyer loyalty to its brand (because some buyers are strongly attracted to the differentiating features and bond with the company and its products); and command a premium price for its product and/or increase unit sales (because additional buyers are won over by the differentiating features). C attract many more buyers by charging a lower price than rivals and thereby take sales and market share away from rivals. D command a premium price for its product and/or increase unit sales (because additional buyers are won over by the differentiating features). E increase unit sales (because additional buyers are won over by the differentiating features) and lower incremental input costs.
B
The five generic types of competitive strategies include A offensive strategies, best-cost provider, defensive strategies, differentiation strategies, and low-cost strategies. B low-cost provider, broad differentiation, focused low-cost, focused differentiation, and best-cost provider. C offensive strategies, defensive strategies, low-price strategies, technological leadership strategies, and product innovation strategies. D low-price strategies, premium price strategies, middle-of-the-road strategies, best-cost provider, and market share leadership strategies. E attacking competitor strengths, broad differentiation, attacking competitor weaknesses, market leadership strategies, and product superiority strategies.
B
The most appealing approaches to broad differentiation A are those that hinge upon first-rate R&D and frequent product innovation. B involve features or attributes that have considerable buyer appeal and are hard or expensive for rivals to duplicate. C are those that either lower buyer switching costs or enhance the differentiator's brand image. D generally relate to product superiority or clever merchandising. E are typically based on either superior product quality or superior customer service.
B
The purposes of defensive strategies include A discouraging deep price discounting on the part of ambitious rivals seeking to capture additional sales and market share. B lowering the risk of being attacked by rivals, weakening the impact of any attack that occurs, and influencing challengers to aim their offensive efforts at other rivals. C insulating a company from the impact of competitive pressures and industry driving forces. D weakening competitors in ways that make them largely irrelevant. E widening a company's competitive advantage over its rivals.
B
What are two of the three best indicators as to how well a company's strategy is working? A Whether the company is achieving its stated financial and strategic objectives and whether customer and employee satisfaction is high B Whether the company is achieving its stated financial and strategic objectives and whether it is gaining customers and increasing its market share C Whether it is subject to weaker competitive forces and pressures than close rivals (a good sign) or whether it is disadvantaged by stronger competitive forces and pressures (a bad sign) D Whether the company has more competitive assets than it does competitive liabilities and whether its strategy is built around at least two of the industry's key success factors E Whether customer and employee satisfaction is high and whether it has more core competencies than close rivals
B
What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is A extra attention paid to establishing a distinctive competence. B concentrated attention on serving the needs of buyers in a narrow piece of the overall market. C greater opportunity for brand loyalty. D suitability for market situations where technological change is fast-paced and continuous product innovation is a key success factor. E What sets focused (or market niche) strategies apart from low-cost leadership or broad differentiation strategies is a concentration on a narrow piece of the total market. The targeted segment, or niche, can be defined by geographic uniqueness or by special product attributes that appeal only to niche members.
B
What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is A the extra attention paid to top-notch product performance and product quality. B their concentrated attention on a narrow piece of the overall market. C greater opportunity for competitive advantage. D their suitability for market situations where most industry rivals have weakly differentiated products. E their objective of delivering more value for the money.
B
Which of the following statements about market opportunity is correct? A Market opportunity is a big factor in shaping a company's strategy. B Depending on the prevailing circumstances, a company's opportunities can be plentiful or scarce and can range from wildly attractive to unsuitable. C In evaluating the attractiveness of a company's market opportunities, managers have to guard against viewing every industry opportunity as a suitable opportunity. D A distinctive competence is a big factor in evaluating the attractiveness of a company's market opportunities because managers have to guard against viewing every industry opportunity as a suitable opportunity. E A distinctive competence is market opportunity that a company has developed with superior proficiency—a capability, in other words.
B
Which of the following steps is not a part of the SWOT analysis? A Identify company weaknesses and competitive deficiencies. B Identify the company's alignment of vision, mission, values, and strategy. C Identify company strengths and competitive assets. D Identify external threats to the company's future profitability. E Identify company market opportunities.
B
Which one of the following is not an offensive strategy option? A Adopting or improving on good ideas of other companies (rivals or otherwise) B Deliberately attacking those market segments where key rivals make big profits C Launching a preemptive strike to capture a rare opportunity D Offering an equally good or better product at a lower price E Introducing new features or models to fill vacant niches in its overall product offering and better match the product offerings of key rivals
B
Which one of the following is not something that can be learned from doing a competitive strength assessment? A Identifying the competitive factors where a company is strongest and weakest vis-à-vis key rivals and the kinds of offensive/defensive actions the company can use to exploit its competitive strengths and reduce its competitive vulnerabilities B Whether a company utilizes more best practices than rivals in performing its value chain activities C Which of the rated companies is competitively strongest and what magnitude competitive advantage it enjoys D Whether a company has a net competitive advantage or a net competitive disadvantage relative to key rivals (as indicated by the differences among the companies' competitive strength scores) E Which rival company is competitively weakest and the areas where it is most vulnerable to competitive attack
B
A company's biggest vulnerability in employing a best-cost provider strategy is A relying too heavily on price discounting. B adding features not needed by the majority of buyers. C not having the needed efficiencies in managing value chain activities to add differentiating features without significantly increasing costs. D being timid in cutting its prices far enough below high-end differentiators to win away many of their customers. E relying excessively on outsourcing in an attempt to boost gross profit margins.
C
A company's competitive strategy deals with A specific actions management plans to take to develop a better value chain than rivals have. B how it plans to unify its functional and operating strategies into a cohesive effort aimed at successfully taking customers away from rivals. C the specifics of management's game plan for competing successfully. D its plans for underpricing rivals and achieving product superiority. E specific actions management intends to take to strongly differentiate its product offering from the offerings of rival companies in the industry.
C
An example of a potential weakness or competitive deficiency is A a rival developing unique resources and capabilities that require a high level of capital investment. B the growing bargaining power of customers or suppliers. C the lack of attention to customer needs. D restrictive foreign trade policies or tight credit conditions. E changes in technology—particularly disruptive technology.
C
Benchmarking A is inherently unethical if it involves companies that are direct competitors because it involves gathering competitively sensitive information about the operations and costs of rivals. B is not a valid tool for measuring the cost-effectiveness of an activity unless it is restricted to companies in the same industry. C entails comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs of these activities. D loses much of its managerial usefulness if it is done with the aid of third-party organizations. E entails calculating the costs of performing each of the primary and related support activities in a company's value chain.
C
For a best-cost provider strategy to be successful, a company must have A excellent supply chain capabilities and product design expertise. B economies of scope or greater scale economies than rivals. C a superior value chain configuration and unmatched efficiency in managing essential value chain activities. D superior product innovation skills and manufacturing capabilities. E a short, low-cost value chain.
C
In which one of the following market circumstances is a broad differentiation strategy generally not well suited? A When buyer needs and preferences are too diverse to be fully satisfied by a standardized product B When few rivals are pursuing a similar differentiation approach C When most competitors are using eye-catching ads to set apart their product offerings and build a brand image that is differentiated D When there are many ways to differentiate the product or service and many buyers perceive these differences as having value E When technological change is fast-paced and competition revolves around rapidly evolving product features
C
One important indicator of how well a company's present strategy is working is whether A it is customarily a first-mover in introducing new or improved products (a good sign) or a late-mover (a bad sign). B its strategy is built around at least two of the industry's key success factors. C the company is achieving its financial and strategic objectives and whether it is an above-average industry performer. D it has been able to create new industry demand through the use of a blue ocean strategy. E it is subject to weaker competitive forces and pressures than close rivals (a good sign) or stronger competitive forces and pressures (a bad sign).
C
Opportunities to differentiate a company's product offering A are always dependent on the capabilities of the company's R&D staff. B are more likely to be captured by highly skilled marketers. C can exist in supply chain activities, R&D, manufacturing activities, distribution and shipping, or marketing, sales, and customer service. D usually are tied to product quality, durability, reliability, and proliferation. E are most frequently attached to a product's brand image, performance, and reliability.
C
Which of the following analytical tools are particularly useful for determining whether a company's prices and costs are competitive? A SWOT analysis, strategy assessment, activity-based costing analysis, and key success factor analysis B SWOT analysis, competitive strength assessment, best practices analysis, and value chain analysis C Value chain analysis and benchmarking D Competitive position assessment, competitive strength assessment, strategic group mapping, SWOT analysis, and value chain analysis E SWOT analysis, best practices analysis, activity-based costing analysis, and competitive strength assessment
C
Which of the following is not an example of a company pursuing a blue-ocean strategy? A Starbucks in the coffee house industry B FedEx in overnight package delivery C Nordstrom in the retail industry D Cirque de Soleil in the live entertainment industry E eBay in the online auction industry
C
Which of the following is not one of the hazards of pursuing a differentiation strategy? A Charging too high a price premium for the differentiating features B Over-differentiating so that the features and attributes incorporated exceed buyer needs and requirements C Striving to create strong brand loyalty rather than being content with weak brand loyalty (which usually means lower costs and higher profitability) D Using features or attributes that rivals can easily copy E Overspending on efforts to differentiate the company's product offering
C
Which of the following is not one of the principal offensive strategy options? A Adopting and improving on the good ideas of other companies B Launching preemptive strikes C Blocking the avenues open to challengers D Attacking competitors' weaknesses E Offering an equal or better product at a lower price
C
Which of the following is typically the strategic impetus for forward vertical integration? A To charge lower retail prices and thereby attract a bigger, more loyal clientele of customers B To make it easier to expand the company's product line C To gain better access to end users and better market visibility D To achieve greater control over advertising and in-store retail merchandising E To gain better access to greater economies of scale
C
Which of the following strategic approaches becomes most appealing when a market is not important to industry leaders? A A low-cost provider strategy B An offensive strategy C A focused strategy D A broad differentiation strategy E A best-cost provider strategy
C
Which one of the following is not a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies? A Whether and when to go on the offensive and initiate aggressive strategic moves to improve the company's market position, or to go on the defensive B Which value chain activities, if any, should be outsourced C Whether to employ a low-cost strategy, a differentiation strategy, or a hybrid strategy D Whether to integrate forward or backward into more stages of the industry value chain E Whether to enter into strategic alliances or collaborative partnerships
C
Which one of the following statements explaining why merger and acquisition strategies typically fail is true? A Merger and acquisition strategies typically fail due to the development of effective integration plans conducive to employee satisfaction. B Merger and acquisition strategies typically fail due to the creation of management-employee programs intended to foster better communication. C Merger and acquisition strategies typically fail due to a misinterpretation of the cultural differences, like employee disenchantment and low morale, because of differences in management styles and operating procedures, and due to unforeseen challenges in integrating operations. D Mergers and acquisition strategies typically fail due to an execution of functional and integration activity, while sustaining and capitalizing on the combined sources of revenue. E Mergers and acquisition strategies typically fail due to misleading advertising messages detailing the merger announcement.
C
A low-cost leader's basis for competitive advantage is A lower prices than rival firms. B using a low-cost/low-price approach to gain the biggest market share. C high buyer-switching costs. D lower overall costs than competitors. E higher unit sales than rivals.
D
A low-cost provider's basis for competitive advantage is A using an everyday low pricing strategy to gain the biggest market share. B larger profit margins than rival firms'. C high buyer switching costs because of the company's differentiated product offering. D meaningfully lower costs than competitors' but not necessarily the absolutely lowest cost/price. E a reputation for charging the lowest prices in the industry.
D
Experience indicates that strategic alliances A are generally successful. B work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency. C work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies. D stand a reasonable chance of helping a company reduce competitive disadvantage but very rarely form the basis of a durable competitive advantage over rivals. E are usually a company's best approach to building a distinctive competence.
D
In making an overall assessment of a company's competitive strength, the answer to which questions are of particular interest? A Is the company's resource strength sufficient to allow it to earn bigger profits than rivals and are market opportunities unique, rare, long-lasting, and not able to be copied by rivals? B Does the company have a gross competitive advantage or disadvantage versus major competitors and how does the company rank relative to competitors in value chain activities? C How does the company rank relative to competitors on each important market success factor and is the company's resource strength sufficient to allow it to earn bigger profits than rivals? D How does the company rank relative to the competitors on each important market success factor and does the company have a net competitive advantage or disadvantage versus major competitors? E Does the company have a gross competitive advantage or disadvantage versus major competitors and does the company do a first-rate job of managing its value chain activities relative to its competitors?
D
The most long-lasting strategic alliances A aim at teaming up with world-class suppliers or else companies with world-class know-how in product innovation. B are those whose purpose is helping a company master a new technology. C are those formed to enable the partners to be consistent first movers or fast followers. D involve collaboration with suppliers or distribution allies, or conclude that continued collaboration is in their mutual interest, perhaps because new opportunities for learning are emerging. E aim at insulating the partners against the impacts of the five competitive forces and industry driving forces.
D
The strategic target of a best-cost provider is A the extremely price-conscious customer in a low-end market range. B the extremely price-conscious customer in a high-end market range. C any customer in a narrow market niche where buyers' needs and preferences are distinctively different. D the value-conscious customer in a middle-market range. E the value-conscious customer in a high-end market range.
D
Which of the following is not a distinguishing feature of a low-cost provider strategy? A The product line consists of a few basic models having minimal frills and acceptable quality. B The production emphasis is on continuously searching for ways to reduce costs without sacrificing acceptable quality and essential features. C The marketing emphasis is on making virtues out of product features that lead to low cost. D The strategic target is value-conscious buyers, and sustaining the strategy depends on frequent advances in technology and occasional product innovations. E Sustaining the strategy revolves around keeping costs down year after year and delivering good value at economical prices.
D
Which of the following is not a potential advantage of backward vertical integration? A Adds to a company's differentiation capabilities and perhaps achieves a differentiation-based competitive advantage B Lessens a company's vulnerability to powerful suppliers inclined to raise prices at every opportunity C Spares a company the uncertainty of being dependent on suppliers for crucial components or support services D Offers enhanced R&D capability, better opportunity to establish a core competence in supply chain management, more flexibility in incorporating state-of-the-art parts and components, and better overall product quality E Contributes to a better-quality product/service offering
D
Which of the following is not a typical reason that many alliances do not live up to expectations? A Inability of partners to work well together B Emergence of more attractive technological paths C Changing conditions make the purpose of the alliance obsolete D Disagreement over how to divide the added market share and profits gained from joint collaboration E Diverging objectives and priorities
D
Which one of the following is not a good indicator of how well a company's present strategy is working? A Whether it is achieving its stated financial and strategic objectives B Whether it is an above-average industry performer C Whether the firm's sales and earnings are increasing or decreasing D Whether the company's resource strengths and competitive capabilities outnumber its resource weaknesses and competitive vulnerabilities E The rate at which new customers are acquired and whether the company's overall financial strength is improving or on the decline
D
Which one of the following is not a good type of rival for an offensive-minded company to target? A market leaders that are vulnerable B runner-up firms with weaknesses in areas where the challenger is strong C small local and regional companies with limited capabilities D other offensive-minded companies with a sizable war chest of cash and marketable securities E struggling enterprises that are on the verge of going under
D
A broad differentiation strategy works best in which of the following market circumstances? A When buyers have a low degree of bargaining power and purchase the product frequently B When new and improved products are introduced frequently C When buyers incur low costs in switching to rival brands D When most competitors are resorting to clever advertising and promotions in an attempt to set apart their product offerings E When there are many ways to differentiate the product or service that have value to buyers
E
A company that is at a disadvantage in the marketplace because it lacks competitively valuable resources possessed by rivals A should adopt a new competitive strategy that might better match the circumstances of the marketplace. B should abandon strategy elements that have caused its weakness in the marketplace. C should undertake efforts to develop a distinctive competence. D is virtually blocked from using offensive strategies and must rely on defensive strategies. E nearly always is relegated to a trailing position in the industry.
E
A hit-and-run or guerrilla warfare type of offensive strategy involves A random offensive attacks used by a market leader to steal customers away from unsuspecting smaller rivals. B undertaking surprise moves to secure an advantageous position in a fast-growing and profitable market segment; usually the guerrilla signals rivals that it will use deep price cuts to defend its newly won position. C tactics that work best if the guerrilla is the industry's low-cost leader. D pitting a small company's own competitive strengths head-on against the strengths of much larger rivals. E surprising moves by small challengers that have neither the resources nor the market visibility to mount a full-fledged attack on industry leaders.
E
A hit-and-run or guerrilla warfare type offensive strategy A involves random offensive attacks used by a market leader to steal customers away from unsuspecting smaller rivals. B involves undertaking surprise moves to secure an advantageous position in a fast-growing and profitable market segment; usually the guerrilla signals rivals that it will use deep price cuts to defend its newly won position. C works best if the guerrilla is the industry's low-cost leader. D involves pitting a small company's own competitive strengths head-on against the strengths of much larger rivals. E involves unexpected attacks (usually by a small to medium-sized competitor) to grab sales and market share from complacent or distracted rivals.
E
Architects of mergers and acquisition strategies typically set sights on which of the following objectives? A Revamping a company's value chain B Facilitating the employment of both offensive and defensive strategies C Creating a more cost-efficient operation, expanding a company's geographic coverage, and extending a company's business into new product categories D Gaining quick access to new technologies or other resources and competitive capabilities, and leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities E Two answers are correct: creating a more cost-efficient operation, expanding a company's geographic coverage, and extending a company's business into new product categories, and gaining quick access to new technologies or other resources and competitive capabilities, and leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities.
E
Companies striving for global market leadership pursue strategic alliances or collaborative partnerships with foreign companies in order to A revamp the global industry value chain, raise needed financial capital from foreign banks, and wage price wars against foreign competitors. B exercise better control over efforts to revamp the global industry value chain and combat the bargaining power of foreign suppliers. C exercise better control over efforts to revamp the global industry value chain, insulate a company from the impact of the five competitive forces, and use the brand names of their partners to make sales to foreign buyers. D increase the bargaining power of foreign suppliers and help defend against the competitive threat of substitute products produced by foreign rivals. E get into critical country markets quickly, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations.
E
Examples of uniqueness drivers do not include A product features, design, and performance. B production R&D. C customer service. Dcontinuous quality improvement. E eliminating low value-added activities and work steps.
E
Options for attacking the high costs of items purchased from suppliers do not include A switching to lower-priced substitute inputs. B collaborating closely with suppliers to identify mutual cost-saving opportunities. C integrating backward into the business of high-cost suppliers and making the item in-house so as to better control the cost. D pressuring suppliers for more favorable prices. E raising prices to customers (in order to cover the high costs).
E
The biggest drawback of relying heavily on alliances and cooperative strategies is A that partners will not divide profits from the alliance in an equitable manner. B that strategic allies and partners frequently become rivals in the marketplace. C having to compromise the company's own priorities and strategies in reaching agreements with partners. D incurring excessive administrative expenses associated with engaging in collaborative efforts. E becoming dependent on other companies for essential expertise and capabilities.
E
The two pivotal factors that distinguish one competitive strategy from another boil down to A whether the company has a customer value proposition, profit formula, and collection of valuable resources, and whether the company's market target is broad or narrow. B whether the company focuses on low cost, and whether the company chooses offensive or defensive moves to counter its rivals. C whether the company chooses offensive or defensive moves to counter its rivals, and whether the company's market target is broad or narrow. D whether the company has to deal with strong competitive forces, and whether the company chooses offensive or defensive moves to counter its rivals. E whether the company's market target is broad or narrow, and whether the company is pursuing a competitive advantage linked to lower costs or differentiation.
E
What are the two ways a company can translate its low-cost advantage over rivals into attractive profit performance? A Eliminating or curbing nonessential activities and aggressive use of activity-based costing B Having a smaller labor force than rivals and outsourcing many value chain activities to suppliers with world-class technological capabilities C Doing a better job than its rivals in performing essential activities and utilizing more best practices than its rivals use D Pursuing the aggressive use of activity-based costing, utilizing more best practices than its rivals use, and having a narrower product line than its rivals offer E Eliminating or curbing nonessential activities and doing a better job than its rivals in performing essential activities
E
Which of the following is generally not considered to be a market opportunity for a company? A Expanding into new geographic markets B Expanding the company's product line to meet a broader range of customer needs C Expanding into areas that are most suited to the company's collection of capabilities and resource strengths D Sharply rising buyer demand for the industry's product E Increased trade barriers in attractive foreign markets
E
Which of the following is not an action that a company can take to do a better job than its rivals of performing value chain activities more cost-effectively? A Striving to capture all available economies of scale B Trying to operate facilities at full capacity C Taking full advantage of experience and learning curve effects D Improving supply chain efficiency E Redesigning products to eliminate features that might have market appeal, but excessively increase production costs
E
Which of the following statements is false? A A dynamic capability is the ability to modify, deepen, or reconfigure the company's existing resources and capabilities in response to changes in the environment or market. B A company's internal strengths should always serve as the basis for its strategy. C Managers must look toward correcting competitive weaknesses that make the company vulnerable, dampen profitability, or disqualify it from pursuing an attractive opportunity. D Managers need to keep close track of how cost effectively the company can deliver value to customers relative to its competitors. E Resources are harder to categorize than capabilities and more challenging to search for as a result.
E
