Ch. 1 - 3 Smartbook Strat
Which elements form part of a company's strategic plan? (Choose every correct answer.) Basic business model Intended competitive moves Past accomplishments Company direction
Basic business model Intended competitive moves Company direction
Which statement about the connection between good strategy and good execution is true? As long as a company has a strong strategy, successful execution is a sure thing. A company can enjoy long-term success with a weak strategy if the execution is strong and aggressive. The marker of good management is a solid strategy that focuses on customer value above all else. Good management consists of good strategy and good strategy execution.
Good management consists of good strategy and good strategy execution.
What choices must managers consider when committing to a company strategy for competing against rival companies? (Choose every correct answer.) How to capitalize on growth opportunities How to respond to market conditions How to attract customers How to hide the company's structural weakness
How to capitalize on growth opportunities How to respond to market conditions How to attract customers
A company mission statement should do which of the following? (Choose every correct answer.) Identify the company's customers or markets Establish the company's own identity Describe where the company expects to head in the future Specify what services and products the company offers
Identify the company's customers or markets Establish the company's own identity Specify what services and products the company offers
Business strategy, in contrast to corporate strategy, involves which of the following? (Choose every correct answer.) Managing all the businesses owned by a corporation Improving the performance of individual business units Strengthening the market position of individual business units Establishing a competitive advantage through cross-business synergies
Improving the performance of individual business units Strengthening the market position of individual business units
Who would be most often involved in the crafting and implementation of functional strategies? (Choose every correct answer.) The CEO of the corporation The people in charge of each function The general manager of the business Top executives in the corporation
The people in charge of each function The general manager of the business
What is the purpose of the fit test? To weed out managers who fail to meet the company's standards To identify products that will most likely perform well in the company's target market To determine how well a strategy matches the company's situation To identify which employees are qualified for a specific project
To determine how well a strategy matches the company's situation
A strategy that changes in response to new market conditions and challenges is known as ______. a differentiation strategy a static strategy an evolving strategy a proactive strategy
an evolving strategy
A measurement system that links financial performance goals with strategic goals is called a ______. stretch objective leading indicator balanced scorecard company strategy
balanced scorecard
The actions that a company takes in accordance with its established business practices make up its ______ strategy, in contrast with actions the company takes in response to changing market conditions. realized deliberate differentiation emergent
deliberate
The key for a company to achieve competitive advantage is either to provide superior value to customers or to deliver value more ______. collaboratively subtly efficiently forcefully
efficiently
Actions taken in response to new strategic maneuvers by rival firms or other unanticipated market circumstances make up a company's ______ strategy. Multiple choice question. abandoned emergent proactive deliberate
emergent
Organizing and guiding a new business activity is called ______. capitalism monopoly industrialization entrepreneurship
entrepreneurship
A typical company's strategy is often both ______, meaning that it plans ways to improve the company's competitiveness, and ______, meaning that it responds to unforeseen market conditions. reactive; proactive reactive; deliberate proactive; reactive emergent; proactive
proactive; reactive
What is a company slogan? A short paragraph that describes the company's history and accomplishments A brief phrase that summarizes the company's vision A sentence that identifies the company's products or services A catchphrase invented and repeated by employees to convey their feelings about the company
A brief phrase that summarizes the company's vision
Which of the following are developed during the first stage in crafting a company strategy? (Choose every correct answer.) A mission statement A set of core values A loyal customer base A strategic vision
A mission statement A set of core values A strategic vision
What is a stretch objective? A managerial tactic that involves adding numerous goods and services to what the company has traditionally offered A goal that can be adjusted to accommodate changing conditions A performance target that will require significant effort to achieve A performance strategy that seeks to include as many personnel as possible
A performance target that will require significant effort to achieve
Which performance indicators are signs of a winning strategy? (Choose every correct answer.) Above-average financial performance Increased market share Growing number of employees Gains in competitive position
Above-average financial performance Increased market share Gains in competitive position
Financial objectives are important for doing which of the following? (Choose every correct answer.) Achieving shareholder satisfaction Increasing revenue Increasing profit margins Developing effective communication within an organization Attaining higher labor productivity
Achieving shareholder satisfaction Increasing revenue Increasing profit margins
Within the hierarchy of a company, a number of strategies are likely to have been developed and implemented by various people. Under what circumstances will the company perform most effectively? (Choose every correct answer.) All the strategies are unified. Top executives clearly communicate a company's strategy to company personnel. Each unit works independently, doing whatever best suits that unit. All employees understand the company's long-term direction.
All the strategies are unified. Top executives clearly communicate a company's strategy to company personnel. All employees understand the company's long-term direction.
What will a typical strategic plan accomplish? (Choose every correct answer.) Allocate resources that will help implement the plan Explore the history of the company in some detail Be written in vague, broad language to allow managers to adapt it as needed Establish a time period for accomplishing goals
Allocate resources that will help implement the plan Establish a time period for accomplishing goals
What are strategic objectives primarily concerned with? (Choose every correct answer.) An organization's market standing An organization's financial performance An organization's competitive position An organization's employee relations
An organization's market standing An organization's competitive position
What are two characteristics of a broad differentiation strategy? Appealing to a niche market Offering products at the lowest possible prices Appealing to a wide range of consumers Offering products or services that are difficult to imitate
Appealing to a wide range of consumers Offering products or services that are difficult to imitate
Which three companies have broad differentiation strategies that have allowed them to maintain long-term competitive advantages? Apple Johnson & Johnson Walmart BMW
Apple Johnson & Johnson BMW
What aspect of a company's operations is usually the easiest thing for competitors to duplicate? Specialized capabilities that the company has developed The company's experience Expertise of the company's personnel Attributes of the company's products or services
Attributes of the company's products or services
What are three of the most reliable ways a company can distinguish itself in the marketplace, build customer loyalty, and achieve a competitive advantage? Broad differentiation strategy Low-cost provider strategy Focused low-cost strategy Broad imitation strategy
Broad differentiation strategy Low-cost provider strategy Focused low-cost strategy
Which of the following should a manager do to implement a strategic plan? (Choose every correct answer.) See that lower-level strategies are well conceived and consistent Build and strengthen competitive capabilities Identify operating strategies with strategic significance Motivate employees Direct organizational change Develop a vision and mission statement
Build and strengthen competitive capabilities Motivate employees Direct organizational change
What are some of the ways that companies typically implement a competitive strategy? (Choose every correct answer.) By isolating the managerial staff By focusing on quality By delivering superior customer service By diversifying product lines
By focusing on quality By delivering superior customer service By diversifying product lines
What are the two basic ways that companies achieve competitive advantage over their business rivals? By producing products or services at a lower cost By delivering higher perceived value to customers By designing more effective advertisements By appealing to a larger target market
By producing products or services at a lower cost By delivering higher perceived value to customers
A company's ultimate success or failure is fundamentally tied to how well its management team does which of the following? (Choose every correct answer.) Charts the company's direction Facilitates internal operating excellence Copies other companies' successful strategies Develops competitively effective strategies
Charts the company's direction Facilitates internal operating excellence Develops competitively effective strategies
What are two basic approaches in company strategy to improve chances of success in competing against rivals? Clearly differentiate a company from its rivals. Always aim for a low-cost strategy. Soften ethical guidelines. Establish a position in an uncrowded market.
Clearly differentiate a company from its rivals. Establish a position in an uncrowded market.
When management discovers that there are strategic conflicts among the various levels of an organization, what should management do? (Choose every correct answer.) Consider which low-level strategies might be changed to accommodate high-level strategies. Ensure all conflicts are resolved. Not make changes unless the units are in direct competition with each other. Adapt high-level strategies to incorporate more appealing ideas from lower levels.
Consider which low-level strategies might be changed to accommodate high-level strategies. Ensure all conflicts are resolved. Adapt high-level strategies to incorporate more appealing ideas from lower levels.
A business strategy becomes unethical when it involves what elements? (Choose every correct answer.) Deceitfulness Unusual competitive advantage Unreasonable damage to the environment Disreputable behavior
Deceitfulness Unreasonable damage to the environment Disreputable behavior
An organization should set performance targets for which of the following? (Choose every correct answer.) Each of the organization's individual work units Each of the organization's product lines Each of the organization's separate businesses Each of the organization's top managers only
Each of the organization's individual work units Each of the organization's product lines Each of the organization's separate businesses
When a company strives to achieve an extreme stretch goal but fails because the goal was simply too difficult, what will most likely happen? The effort will nevertheless produce changes that will improve the company's performance. Employees will become more confident because at least they tried. The company will have established a strong sense of teamwork. Employees will lose their motivation.
Employees will lose their motivation.
A company mission statement should do which of the following? (Choose every correct answer.) Describe where the company expects to head in the future Establish the company's own identity Identify the company's customers or markets Specify what services and products the company offers
Establish the company's own identity Identify the company's customers or markets Specify what services and products the company offers
Who is the target audience of an organization's strategic vision statement? Everyone in the organization Top executives exclusively Clients and investors Only mid-level managers
Everyone in the organization
Which of the following are true about how the content of a company's strategic plan is typically shared with different audiences? (Choose every correct answer.) A copy with detailed explanations is handed out to every employee of the company. Excerpts of the plan are posted on the company website. A summary of the plan is published in the company's annual report. The plan is circulated to the managers within the company.
Excerpts of the plan are posted on the company website. A summary of the plan is published in the company's annual report. The plan is circulated to the managers within the company.
Which statements are true about companies where core values are taken seriously? (Choose every correct answer.) There is wide latitude about if and when personnel are held accountable for embodying the values. Executives demonstrate the values in their own behavior. Executives attempt to make the values an integral part of the corporate culture. Only lower-level personnel are expected to embrace the values.
Executives demonstrate the values in their own behavior. Executives attempt to make the values an integral part of the corporate culture.
Members of an organization are most likely to support a new strategic vision if the document does which of the following? (Choose every correct answer.) Explains where the organization is going and why Is explained by top executives to as many people as possible Is distributed throughout the organization Is presented to higher-level managers only
Explains where the organization is going and why Is explained by top executives to as many people as possible Is distributed throughout the organization
True or false: The crafting and implementing of company strategy is exclusively a function of the top management of an organization. True False
False
When setting objectives, which types of performance targets must be established? (Choose every correct answer.) Financial Operational Functional-area Strategic
Financial Strategic
The balanced-scorecard approach measures which of the following? (Choose every correct answer.) Team spirit Financial objectives Corporate debt Strategic objectives
Financial objectives Strategic objectives
Which of the following are the components of a fit test that help evaluate how well a company's strategy matches its situation? (Choose every correct answer.) Internal fit External fit Aesthetic fit Dynamic fit Performance fit
Internal fit External fit Dynamic fit
Which statements are true of a company's strategic vision? (Choose every correct answer.) It is crafted by the company's top managers. It explains why the vision makes sound business sense. It steers the organization in a specific direction. It achieves its effectiveness by being broad and vague.
It is crafted by the company's top managers. It explains why the vision makes sound business sense. It steers the organization in a specific direction.
What is one key characteristic of a focused low-cost strategy? It seeks to differentiate its products from those of rivals. It seeks to give customers the most value for their money by meeting key quality features or performance. It seeks to sell to a broad market segment. It seeks to sell to a narrow market niche.
It seeks to sell to a narrow market niche.
Which statements about a company's goal-setting process are true? (Choose every correct answer.) It should be a top-down process. It should coordinate the efforts of each organizational unit. It should involve a bottom-up process. It should involve all organizational units within the company.
It should be a top-down process. It should coordinate the efforts of each organizational unit. It should involve all organizational units within the company.
Which statements are true of a company's strategic vision? (Choose every correct answer.) It steers the organization in a specific direction. It explains why the vision makes sound business sense. It is crafted by the company's top managers. It achieves its effectiveness by being broad and vague
It steers the organization in a specific direction. It explains why the vision makes sound business sense. It is crafted by the company's top managers.
In what ways does a competitive advantage benefit a business? (Choose every correct answer.) Larger profits Greater success in the marketplace Smaller payroll More extensive product line
Larger profits Greater success in the marketplace
What company invented the business model for fast food restaurants? Multiple choice question. McDonald's Burger King Pizza Hut
McDonald's
Better financial performance typically results from which of the following? (Choose every correct answer.) Organizational complexity More competitive vitality Competitive advantage A stronger market standing
More competitive vitality Competitive advantage A stronger market standing
Which circumstances commonly require the modification of a company's strategy? (Choose every correct answer.) New market opportunities Meeting financial targets A shift in buyer needs Technological advances
New market opportunities A shift in buyer needs Technological advances
What entrepreneurial skills help managers craft and implement a successful company strategy? (Choose every correct answer.) Noticing signs that the business climate is changing Daring to be innovative Adjusting the strategy as conditions shift Making sure the company closely resembles its competitors
Noticing signs that the business climate is changing Daring to be innovative Adjusting the strategy as conditions shift
What are lagging indicators? Evaluations that reveal each employee's weaknesses Performance measurements resulting from decisions and activities in the past Clues that the company is falling behind its competitors Financial reports that are compiled at the end of the fiscal year
Performance measurements resulting from decisions and activities in the past
Which of the following should the organizational units within a company do? (Choose every correct answer.) Produce results that help the company achieve its performance targets Know their strategic role within the company See themselves as part of a team that includes the entire company Focus on their own goals and avoid involvement in the company's strategic vision
Produce results that help the company achieve its performance targets Know their strategic role within the company See themselves as part of a team that includes the entire company
What performance indicators reveal the most about the merits of a company's strategy? (Choose every correct answer.) Profitability and financial strength Competitive strength and market standing Short-term competitive advantage Resources and capabilities
Profitability and financial strength Competitive strength and market standing
Long-term objectives are intended to do which of the following? (Choose every correct answer.) Allow the company to start realizing more revenue within two months Focus on objectives one year into the future Prompt action now to improve the organization's performance later Prevent a nearsighted management philosophy
Prompt action now to improve the organization's performance later Prevent a nearsighted management philosophy
Which of the following are short-term objectives? (Choose every correct answer.) Quarterly objectives Five-year objectives Annual objectives Three-year objectives
Quarterly objectives Annual objectives
Operating strategies are designed to manage which of the following? (Choose every correct answer.) The overall operation of complex corporations Specific activities, such as Internet sales The businesses that together from a larger corporation Key units, such as distribution centers
Specific activities, such as Internet sales Key units, such as distribution centers
The general profit formula for fast-food restaurants as invented by McDonald's involves which of the following? (Choose every correct answer.) Strict specifications for ingredients Advertising and in-store promotions Standardized store design Commitment to corporate responsibility
Strict specifications for ingredients Advertising and in-store promotions Standardized store design
Sometimes a company's CEO is the main person who develops the organization's strategy. This most often happens in which of the following situations? (Choose every correct answer.) The CEO is the owner and manager of a small company. The CEO is the founder of a company that grew into a larger corporation. The CEO has particularly strong strategic leadership skills. The CEO works under the close supervision of a board of directors.
The CEO is the owner and manager of a small company. The CEO is the founder of a company that grew into a larger corporation. The CEO has particularly strong strategic leadership skills.
Who is ultimately responsible for the results that a company strategy produces? Multiple choice question. The chief operating officer (COO) The chief managing officer (CMO) The chief financial officer (CFO) The chief executive officer (CEO)
The chief executive officer (CEO)
Which of the following are NOT likely to happen if a company's financial objectives are met or exceeded? (Choose every correct answer.) The company's creditors will be pleased. The company will go into bankruptcy. Revenues will decrease. Senior executives will be fired.
The company will go into bankruptcy. Revenues will decrease. Senior executives will be fired.
Which factors do managers consider when establishing performance objectives? (Choose every correct answer.) The company's internal capabilities The strategic visions of rival businesses Economic conditions within the industry Competition from other businesses
The company's internal capabilities Economic conditions within the industry Competition from other businesses
What is described by a company's mission statement? (Choose every correct answer.) The company's aspirations The company's present purpose The company's future strategic course The company's present business
The company's present purpose The company's present business
A company's business model is comprised of which of the following? (Choose every correct answer.) Multiple select question. The cost of goods sold The customer value proposition The profit formula The competitive assets
The customer value proposition The profit formula
Who is primarily responsible for crafting and implementing business strategy in a multi-business organization? A low-level manager The CEO of the organization The head of each business unit The HR director of the organization
The head of each business unit
Top executives can unify the various strategies within a company by telling lower managers and other personnel about which of the following? (Choose every correct answer.) The organization's corporate structure and hierarchy of authority The major components of the corporate strategy The organization's vision The organization's objectives
The major components of the corporate strategy The organization's vision The organization's objectives
Why might top executives involve lower-level managers in crafting and implementing a company strategy? (Choose every correct answer.) The organization benefits when its various units compete fiercely against each other. The managers know more details about the operation of their specific operating units than the executives do. The company's operations are spread across various industries and geographic areas. The organization is so big and complex that top management cannot keep track of all the parts that make up the strategy.
The managers know more details about the operation of their specific operating units than the executives do. The company's operations are spread across various industries and geographic areas. The organization is so big and complex that top management cannot keep track of all the parts that make up the strategy.
While developing a strategic vision, a company's managers might change which of the following? (Check all that apply.) The markets in which the company will compete The amount of money the company will pay its sales staff The type of customers the company will serve The products the company will offer
The markets in which the company will compete The type of customers the company will serve The products the company will offer
Which of the following are true statements about crafting and executing strategy? (Choose every correct answer.) The process of crafting and executing strategies can be skipped if an enterprise has the good fortune of stumbling into the right market at the right time. Most companies can boast of success in the marketplace due to lucky breaks. The processes of crafting and executing strategies must go hand-in-hand if an enterprise is to be successful in the long run. High-performing enterprises are nearly always the product of astute, creative, and proactive strategy making.
The processes of crafting and executing strategies must go hand-in-hand if an enterprise is to be successful in the long run. High-performing enterprises are nearly always the product of astute, creative, and proactive strategy making.
Why do some companies state their core values but make little effort to ensure that individual personnel and the company in general will abide by them? The top management of the company strongly believes in its stated values. The statement about values serves only to make the company look good. Core values seldom help a company achieve its purposes. In most states it is illegal to require employees to demonstrate good character on the job.
The statement about values serves only to make the company look good. Need help? Review these concept resources.
Which of the following are reasons for crafting and executing strategies to be important managerial tasks? (Choose every correct answer.) They prohibit harassment and discrimination at workplace. They define a company's best practices. They establish a formula for improving performance. They provide a path to competitive advantage. They lay out the means for pleasing customers.
They establish a formula for improving performance. They provide a path to competitive advantage. They lay out the means for pleasing customers.
When do strategic actions fall into the "should not do" category? (Choose every correct answer.) They have a negative effect on customers, employees, and the surrounding community. They make the company look bad. They cause the company to capture so much market share that business rivals can barely compete. They cause a public backlash and accusations of being irresponsible.
They have a negative effect on customers, employees, and the surrounding community. They make the company look bad. They cause a public backlash and accusations of being irresponsible.
Why are stretch objectives helpful? (Choose every correct answer.) They prevent employees from settling for a comfortable level of performance. They motivate employees to be more productive. They allow the company some extra time to accomplish its goals when unexpected obstacles slow the work. They help an organization perform at its full potential.
They prevent employees from settling for a comfortable level of performance. They motivate employees to be more productive. They help an organization perform at its full potential.
Why do companies designate a set of core values? (Choose every correct answer.) To encourage certain beliefs, traits, and behavioral norms To avoid dealing with clients with undesirable ethics To guide the company as it pursues its vision and mission To guide the behavior of personnel
To encourage certain beliefs, traits, and behavioral norms To guide the company as it pursues its vision and mission To guide the behavior of personnel
When charting a company's direction, why do managers set objectives? To establish a strategic hierarchy for the entire company To help employees see the difference between the company's vision and mission To establish performance targets that the managers hope to achieve, using the company's mission and vision To help define the company's mission statement
To establish performance targets that the managers hope to achieve, using the company's mission and vision
What purposes are served by a company slogan? (Choose every correct answer.) To present the company's strategic vision with supporting details To help employees maintain focus on the company's purpose To motivate personnel to overcome obstacles To define the organization's direction
To help employees maintain focus on the company's purpose To motivate personnel to overcome obstacles To define the organization's direction
What is the purpose of a company's strategic vision? To predict what the market will look like in future decades To steer the company toward long-term growth and profits To expand the company's operations as broadly as possible To produce a catalog of all the company's products
To steer the company toward long-term growth and profits
True or false: It is easier for rivals to imitate a company's product line than it is for them to duplicate its capabilities. True False
True
Under what circumstances would an extreme stretch goal involving radical expectations be most likely to succeed? (Choose every correct answer.) When the company has plenty of resources available When the company's recent performance has been strong When most of the top managers have been replaced by new, younger recruits When employees are so demoralized that they are strongly motivated to change
When the company has plenty of resources available When the company's recent performance has been strong
Typically, a company's strategy making must ______. move from the business level to the corporate level begin at the top of a company begin at the lowest levels of a company and work its way upward move from mid-levels to the upper and the lower levels
begin at the top of a company
A blueprint that outlines the means for a company to deliver value to customers in a suitably profitable manner is known as its ______. proactive strategy emergent strategy strategic reaction business model
business model
A sound company strategy is essentially about ______ in comparison to company rivals. carrying less debt competing differently having a better trained workforce being faster to market
competing differently
When a business is more successful than its rivals at attracting customers and handling competition, it is said to have a(n) ______ advantage. competitive long-term marketing organizational
competitive
Strategic performance is measured by the rise and fall of a company's ______. competitiveness senior executives staff profit revenue
competitiveness
Honor, integrity, teamwork, superior customer service, and innovation are examples of company ______. functional-area strategies objectives core values operating strategies
core values
A company's approach to meeting or exceeding its customers' needs at a price they consider a good value is called the _____. customer value proposition business model profit formula value-price-cost strategy
customer value proposition
The profit (blank) is the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition.
formula
A toy-making business is part of a larger corporation that owns various other businesses. The toy-making business unit decides to increase its production of board games. This is an example of a(n) ______. differentiation strategy business strategy operating strategy functional-area strategy
functional-area strategy
To mobilize employee support for a new strategic vision for a company, executives should ______. summarize the plan on the internal company website rather than discussing it in person with all employees avoid discussing employee concerns and instead talk about the effort spent in creating the new vision remind employees that they failed to make the company prosper under the old system give convincing reasons for taking the organization in a new direction
give convincing reasons for taking the organization in a new direction
What are the best tactics for convincing lower-level managers and employees to support the company's strategic vision? (Choose every correct answer.) Sharing updates and progress reports Explaining why the company is taking a particular direction Avoiding arguments by revealing few details about the plan Emphasizing that employees must respect management's authority
haring updates and progress reports Explaining why the company is taking a particular direction
The manager of a plant that produces canned goods and is owned by a food and beverage company develops a strategy for updating its production lines while maintaining its quality controls. This is an example of a(n) ______. business strategy functional-area strategy corporate strategy operating strategy
operating strategy
A company's realized strategy is a combination of ______. emergent and reactive strategies predictive and responsive strategies deliberate and proactive elements proactive and reactive elements
proactive and reactive elements
Employees at various levels within an organization are best served by performance objectives that ______. relate to management only relate in a broad way to the entire organization relate to individual workers only relate specifically to what their departments are doing
relate specifically to what their departments are doing
To measure how well a company is moving in the intended direction, it is important to ______. set objectives include a checklist in the mission statement adjust core values to maximize profits rethink the basic guiding vision periodically
set objectives
The most reliable leading indicators are ______. core values that have become an essential component of the organization a robust company vision and mission statement strategic outcomes that measure competitiveness and market position financial statements over at least the past three to five years
strategic outcomes that measure competitiveness and market position
A sense of "where we are going" is called the company's ______. core values strategic vision performance objectives operational strategy
strategic vision
