Competitive Advantage and Strategy Mid-Term

A company's "macro-environment" refers to

the strategically relevant factors outside a company's industry boundaries—economic conditions, political factors, socio-cultural forces, technological factors, environmental factors, and legal/regulatory conditions.

The spotlight in analyzing a company's resources, internal circumstances, and competitiveness includes such questions/concerns as:

what are the company's resource strengths and weaknesses and its external opportunities and threats.

The defining characteristic of a well-conceived strategic vision is

what it says about the company's future strategic course-"the direction we are headed and what our future product-market-customer-technology focus will be"

The defining characteristic of a well-conceived strategic vision is:

what it says about the company's future strategic course—"the direction we are headed and what our future product-market-customer-technology focus will be."

The real payoff of driving forces is to help managers understand:

what strategy changes are needed to prepare for the impacts of the driving forces.

A sustainable competitive advantage is gained:

when a company has durable competitive assets that are central to its strategy and superior to those of rival firms.

Rivalry increases

when buyer demand is growing fast or increasing.

The customer value proposition lays out the company's approach to:

satisfying customer wants and needs at a price customers will consider a good value.

Breaking down resistance to a new strategic vision typically requires that top management

frequently reiterate the basis for the new direction at company gatherings, address employee concerns and fears head-on, and provide updates and progress reports as events unfold

A company's business model

is management's storyline for how it will generate revenues ample to cover costs and produce a profit--absent the ability to deliver good profitability, the strategy is not viable and survival of the business is in doubt

A company's business model

is management's storyline for how the strategy will result in achieving the targeted strategic objectives

A Global Strategy

is one in which a company employs the same basic competitive approach in all countries where it operates, sells much the same products everywhere, strives to build global brands, and coordinates its actions worldwide with strong headquarters control.

Global Competition

is one in which a company employs the same basic competitive approach in all countries where it operates, sells much the same products everywhere, strives to build global brands, and coordinates its actions worldwide with strong headquarters control.

A Multi-domestic Strategy

is one in which a company varies its product offering and competitive approach from country to country in an effort to be responsive to differing buyer preferences and market conditions.

Multi-domestic Competition

is one in which a company varies its product offering and competitive approach from country to country in an effort to be responsive to differing buyer preferences and market conditions.

A Vertically Integrated Firm

is one that performs value chain activities along more than one stage of an industry's value chain system.

Market maneuvering among industry rivals

is ongoing and dynamic, with moves and countermoves of rivals producing a continually evolving competitive landscape that delivers winners and losers.

Corporate strategy for a diversified or multi-business enterprise

is orchestrated by senior corporate executives and centers around the kinds of initiatives the company uses to establish business positions in different industries and efforts to boost the combined performance of the businesses the company has diversified into

Corporate strategy for a diversified or multibusiness enterprise:

is orchestrated by senior corporate executives and centers around the kinds of initiatives the company uses to establish business positions in different industries and efforts to boost the combined performance of the set of businesses the company has diversified into and the means of capturing cross-business synergies and turning them into competitive advantages.

Business Strategy

is primarily concerned with strengthening the company's market position in a single business company or single business unit in a multibusiness corporation. The General managers and vice presidents usually make these decisions.

A company's overall strategy

is really a collection of strategic initiatives and actions devised by managers and key employees up and down the whole organizational hierarchy

A company's overall strategy:

is really a collection of strategic initiatives and actions devised by managers and key employees up and down the whole organizational hierarchy

Good strategy combined with good strategy execution:

is the clearest indicator of good management.

Vertical Scope

is the extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's internal value chain system, ranging from raw-material production to final sales and service activities.

A dynamic capability:

is the ongoing capacity to modify existing resources and capabilities to create new ones.

Horizontal Scope

is the range of product and service segments that a firm serves within its focal market.

The strategy-making, strategy-executing process

is usually delegated to members of a company's board of directors so as not to infringe on the time of busy executives

The two big drivers of outsourcing are:

that outsiders can often perform certain activities better or more cheaply, and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies).

One of the things that can be gleaned from a strategic group map of industry rivals is:

that some strategic groups are more favorably positioned than others because they confront weaker competitive forces and/or because they are more favorably impacted by industry driving forces.

The most telling signs of a well-managed company are:

good strategy-making combined with good strategy execution.

The payoffs of a clear vision statement do not include

greater ability to avoid strategic inflection points

A company's strategy consists of the action plan management is taking to

grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve performance objectives

The reason the world economy is globalizing at an accelerated pace is because: A. countries previously open to foreign companies have opened up their markets. B. countries that previously had market or mixed economies now embrace planned economies. C. information technology expands the importance of geographic distance. D. growth-minded companies are racing to build stronger competitive positions in the markets of more countries. E. All of these.

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

Driving forces analysis:

has practical value and is basic to the task of thinking strategically about where the industry is headed and how to prepare for the changes ahead.

Unrelated Businesses

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

Strategy-making is

more of a collaborative group effort that involves managers and key employees throughout the company.

39. An export strategy is vulnerable except when an exporter is: ␣ ␣

C. affected by adverse shifts occurring in currency exchange rates.

The "driving forces" in an industry A. are usually triggered by changing technology or stronger learning/experience curve effects. B. usually are spawned by growing demand for the product, the outbreak of price-cutting, and big reductions in entry barriers. C. are major underlying causes of change in industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions. D. appear when an industry begins to mature but are seldom present during early stages of the industry life cycle. E. are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.

C. are major underlying causes of change in industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.

16. The "driving forces" in an industry: A. are usually triggered by changing technology or stronger learning/experience curve effects. B. usually are spawned by growing demand for the product, the outbreak of price-cutting, and big reductions in entry barriers. C. are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions. D. appear when an industry begins to mature but are seldom present during early stages of the industry life cycle. E. are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.

C. are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.

The "driving forces" in an industry: A. are usually triggered by changing technology or stronger learning/experience curve effects. B. usually are spawned by growing demand for the product, the outbreak of price-cutting, and big reductions in entry barriers. C. are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions. D. appear when an industry begins to mature but are seldom present during early stages of the industry life cycle. E. are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.

C. are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.

24. A European-based company that makes all of its goods at a plant in Brazil and then exports the Brazilian- made goods to country markets in many different parts of the world: ␣ ␣

C. becomes less competitive in foreign markets when the Brazilian real gains in value against the . currencies of the countries to which the Brazilian-made goods are being exported.

A European-based company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets in many different parts of the world: A. is competitively disadvantaged when the euro declines in value against the Brazilian real. B. is competitively disadvantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C. becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported. D. is competitively advantaged when the euro appreciates in value against the Brazilian real. E. has no interest in whether the euro grows stronger or weaker versus the Brazilian real unless its chief competitors are other companies located in countries whose currency is also the euro.

C. becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported.

22. A European manufacturer that exports goods made at its European plants to the United States: ␣ ␣

C. becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar.

A European manufacturer that exports goods made at its European plants to the United States: A. is competitively disadvantaged when the euro declines in value against the U.S. dollar. B. is largely unaffected by fluctuating exchange rates between the euro and the U.S. dollar. It would, however, be affected if its plants were in the U.S. C. becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar. D. becomes more competitive in European markets when the euro declines in value against the U.S. dollar. E. has no interest in whether the euro grows stronger or weaker versus the U.S. dollar unless its chief competitors are other companies located in countries whose currency is also the euro.

C. becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar.

78. A think-global, act-global strategic theme puts emphasis on: ␣ ␣

C. building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and . capabilitiesfromonecountrytoanother.

10. One of the biggest strategic challenges to competing in the international arena includes: ␣

D.whether to offer a standardized product worldwide or a customized product offering in each different country market.

When an activity becomes something a company has learned to perform proficiently and capably, it is said to have:

a competence.

An industry contains one strategic group when all sellers:

pursue essentially identical strategies and have similar market positions.

Companywide Restructuring

(corporate restructuring) involves making major changes in a diversified company by divesting some businesses and/or acquiring others, so as to put a whole new face on the company's business lineup.

Corporate Venturing

(or new venture development) is the process of developing new business as an outgrowth of a company's established business operations. It is also referred to as corporate entrepreneurship or intrapreneurship since it requires entrepreneurial-like qualities within a larger enterprise.

4. List and briefly discuss at least three obligations of a company's board of directors in corporate governance and the strategy-making, strategy-executing process. Give examples.

- Oversee the company's financial accounting and financial reporting practices. Board members have a legal obligation to warrant the accuracy of the company's financial reports and protect shareholders. They also ensure they are following to accepted accounting principles. This also helps prevent fraud and misuse of funds. - Critically appraise and oversee the company's direction, strategy, and business approaches. Board members are also expected to guide management in choosing a strategic direction and to make independent judgments about the validity and wisdom of managements proposed actions. This duty is important especially when the company is failing to meet the specific strategies needs. An example is Phillips Electronics holding annual two to three day retreats for evaluating company long-term direction and various strategic proposals. - Evaluate the caliber of senior executives' strategy-making and strategy- executing skills. The board is responsible for making sure the CEO and or executive management is doing a good job of leading the company. They also need to analyze and see who is the next to succeed the CEO incase he steps down or leaves. - Institute a compensation plan for top executives that rewards them for actions and results that serve shareholder interests. Most boards have a compensation committee, composed of directors outside the company, to develop salary and compensation plan that rewards senior executives for boosting the company's long term performance on behalf of shareholders.

1. Draw the five forces model of competition and briefly describe the relevance of each of the five forces in determining the overall strength of competitive pressures a company faces. Which of the five competitive forces is typically the strongest? Give examples.

- Substitute products - Buyers - New entrants - Rival firms - Suppliers Strongest: rival firms competing for patronage of customers

good examples of substitutes product that triggers stronger competitive pressures?

-A salad as a substitute for French fries -Wireless phones as a substitute for wired telephones -Snowboards as a substitute for snow skis -Video-on-demand services from a cable TV company as a substitute for going to the movies

The following pairs of variables are likely to be useful in drawing a strategic group map

-Geographic market scope and degree of vertical integration -Brand name reputation and distribution channel emphasis -Product quality and product-line breadth -Price/perceived quality and image range and the extent of buyer appeal

93. Which one of the following is NOT one of the ways a company can strive to gain competitive advantage (or offset domestic disadvantages) by expanding into foreign markets? ␣

A. By competing in both developed and emerging country markets and/or by selling direct to foreign . buyers via the company's website.

A company's mission statement typically addresses which of the following questions?

"Who are we and what do we do?"

In crafting a strategy, management is in effect saying

"among all the many different business approaches and ways of competing we could have chosen, we have decided to employ this particular combination of competitive and operating approaches in moving the company in the intended direction, strengthening its market position and competitiveness, and boosting performance."

A company's mission statement should be sufficiently descriptive and includes which of the following?

All of these

A company resource weakness or competitive deficiency:

are shortcomings that constitute competitive liabilities.

The BEST example of a company resource is:

having proven technological expertise and an ability to churn out new and improved products on a regular basis.

An Acquisition Premium

is the amount by which the price offered exceeds the preacquisition market value of the target company.

Tangible resources do not include: A. physical resources. B. financial resources. C. human assets. D. technological assets. E. organizational resources.

C. human assets.

Which of the following is not something a company's strategy is concerned with?

Management's choices about how quickly and closely to copy the strategies being used by successful rival companies

11. What is the framework that comprises a set of major factors (that vary from country to country) that describe the nature of each country's business environment?

B. Porter's Diamond of National Competitive Advantage.

Any company that seeks competitive advantage by being a first-mover must ask several hard questions prior to executing its strategy. Which question would it NOT ask?

Did the company pour too many resources into getting ahead of the market opportunity?

What are the three criteria for determining whether a company has a winning strategy? Give examples?

• The fit test: how well the strategy fits the company's situation? The strategy has to fit with the external (market and competitive conditions) and internal (internal resources available) aspects of the companies overall situation. Examples: Disney Pixar • Competitive advantage test: is the strategy helping the company achieve a sustainable competitive advantage? The bigger and more durable the competitive advantage, the more powerful it is. Examples: Starbucks, Amazon, Apple, Nestle. • Performance test: Is the strategy producing good company performance? Strong company performance is key. There are to indicators that help with this: 1) Competitive strength and market standing 2) Profitability and finance strength Examples: Royal Bank of Canada, Microsoft, apple, Samsung, chevron, bank of china.

major questions to ask in thinking strategically about industry and competitive conditions in a given industry

-What strategic moves are rivals likely to make next? -What are the industry's key factors for future competitive success? -Is the outlook for the industry conducive to providing attractive profitability? -What are the driving forces in the industry, and what impact will these changes have on competitive intensity and industry profitability?

The following factors are relevant considerations in judging whether buyer bargaining power is relatively strong or relatively weak

-Whether certain customers offer sellers important market exposure or prestige -Whether customers are relatively well-informed about sellers' products, prices, and costs -Whether sellers' products are highly differentiated, making it troublesome or costly for buyers to switch to competing brands or to substitute products -Whether sellers pose little threat of forward integration into the product market of their customers and whether buyers pose a major threat to integrate backward into the product market of sellers

The competitive pressures on companies within an industry comes from those:

-associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry. -companies in other industries attempting to win buyers over to their substitute products. -associated with the threat of new entrants into the marketplace. -associated with the bargaining power of suppliers and customers.

The nature and strength of the competitive forces that prevail in an industry is generally a joint product of

-competition from rival sellers. -competition from potential new entrants. -competition from producers of substitute products. -competitive pressures stemming from the bargaining power of both suppliers and buyers.

Management is obligated to monitor new external developments, evaluate the company's progress, and make corrective adjustments in order to

...

The leadership challenges that top executives face in making corrective adjustments when things are not going well include

...

The obligations of an investor-owned company's board of directors in the strategy-making, strategy-executing process include

...

The primary role/obligations of a company's board of directors in the strategy-making, strategy-executing process include

...

The task of top executives in making corrective adjustments includes

...

Which one of the following is not among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned?

...

Assume a firm is at a cost disadvantage with rivals because of higher distributor/dealer costs than rivals. Identify three strategic moves that it can make to restore cost parity. Give examples.

1. A company's own internal activities a. Redesign the product and/or some of its components to eliminate high-cost components or facilitate speedier and more economical manufacture or assembly 2. Suppliers' part of the value chain system a. Supplier-related cost disadvantages can be attacked by pressuring suppliers for lower prices, switching to lower-priced substitute inputs, and collaborating closely with suppliers to identify mutual cost-saving opportunities b. Ex) just-in-time deliveries from suppliers can lower a company's inventory and internal logistics costs and may also allow suppliers to economize on their warehousing, shipping, and production scheduling cost 3. The forward - channel portion of the value chain system a. Pressure distributors, dealers, and other forward-channel allies to reduce their costs and markups b. Collaborate with them to identify win-win opportunities to reduce cost c. Change to a more economical distribution strategy, including switching to cheaper distribution channels

List seven factors that make rivalry among competing sellers weaker.

1. Buyer demand is growing rapidly 2. Buyer costs to switch brands are high. 3. The products of rival sellers are strongly differentiated and customer loyalty is high. 4. Fixed and storage costs are low. 5. Sales are concentrated among a few large sellers. 6. Rivals are similar in size, strength, objectives, strategy and country of origin. 7. Exit barriers are low

List seven factors that make rivalry among competing sellers stronger.

1. Buyer demand is growing slowly or delining 2. Buyer costs to switch brands are low 3. THe products of industry members are commodities or weakly differentiated 4. The firms in the industry have high fixed costs or high storage costs. 5. Competitors are numerous or are of roughly equal size and competitive strength. 6. Rivals have divers objectives, strategies and or countries of origin 7. Rivals face high EXIT barriers

3. Explain the difference between a company activity, capability, competence, a core competence, and a distinctive competence. Give examples

1. Company activity 2. Capability is the capacity of a firm to perform some internal activity competently (pg 84) a. Apple's product innovation capabilities are widely recognized as being far superior to those of its competitors 3. Competence is an activity that a company has learned to perform with proficiency - a capability, in other words (pg 90) a. 4. Core competence is an activity that a company performs proficiently and that is also central to its strategy and competitive success (pg 90) a. M3 Corporation has a core competence in product innovation - its record of introducing new products goes back several decades and new product introduction is central to 3M's strategy of growing its business 5. Distinctive competence is a competitively important activity that a company performs better than its rivals - it thus represents a competitively superior internal strength (pg 90) a. Walt Disney has a distinctive competence in feature film animation. b. A level of proficiency that rivals do not have

List the most widely encountered barriers to entry.

1. Cost advantages enjoyed by industry incumbents 2. Strong brand preferences and high degrees of customer loyalty. 3. Strong "network effects" in customer demand 4. High capital requirements. 5. The difficulties of building a network of distributors or dealers and securing adequate space on retailers shelves. 6. Restrictive government policies.

What are the six questions that comprise the task of evaluating a company's resources and competitive position?

1. How well is the company's present strategy working? 2. Do the company's resources and capabilities have sufficient competitive power to give it a sustainable advantage over competitors? 3. Is the company able to seize market opportunities and overcome external threats to its future well-being? 4. Are the company's cost structure and value proposition competitive? 5. On an overall basis, is the company competitively stronger or weaker than key rivals? 6. What strategic issues and problems merit front-burner managerial attention?

4. What is benchmarking and why is it a strategically important analytical tool? Give an example. What is meant by the term "best practices"? Why does it matter whether a company utilizes "best practices" in performing the activities comprising its value chain? Give an example.

1. Improving a company's internal activities based on learning other companies "best practices" 2. Sources of benchmarking information: a. Reports, grade groups, analysts & customers b. Visits to benchmark companies c. Data from consulting firms 3. Ethical conduct plays an important role with benchmarking Best practice is a method of performing an activity that consistently delivers superior results compared to other approaches. 1. Toyota managers got Xerox's idea for just-in-time inventory deliveries by studying how U.S. supermarkets replenished their shelves

The procedure for constructing a strategic group map involves

1. identifying the competitive characteristics that differentiate firms' market positions and competitive approaches. 2. plotting the firms on a two-variable or two-dimensional map, drawing circles around those firms occupying about the same strategy space, and making the size of the circles for each strategic group proportional to the size of its members' share of total industry sales revenues.

factors causing supplier bargaining power to be stronger

54. Which one of the following is NOT a factor in causing supplier bargaining power to be stronger? -The products/services needed from suppliers are in short supply. -Industry members can't integrate backward and self-supply themselves. -The item being supplied significantly enhances the quality or performance of the products of industry members. -Suppliers are not dependent on the industry for a large portion of their revenues.

Using the five-forces model of competition to determine what competition is like in a given industry involves A . building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining whether the collective impact of all five competitive forces is conducive to earning attractive profits. B. building the picture of competition in two steps: (1) determining which rival has the biggest competitive advantage and (2) assessing whether the competitive advantages possessed by various industry members allow most industry members to earn above-average profits. C. evaluating whether competition is being intensified or weakened by the industry's driving forces and key success factors. D. assessing whether the collective impact of all five forces is weak enough to allow industry members to go on the offensive or use a defensive strategy to insulate against fierce competitive pressures. E. gauging the overall strength of competition based on how many industry rivals are operating with a competitive advantage and how many are operating at a competitive disadvantage.

A . building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining whether the collective impact of all five competitive forces is conducive to earning attractive profits.

B) buyer needs and uses of the product are diverse.

A broad differentiation strategy generally produces the best results in situations where A) buyer brand loyalty is low. B) buyer needs and uses of the product are diverse. C) new and improved products are introduced only infrequently. D) most rivals are pursuing a differentiation strategy and are seeking to differentiate their products on most of the same features and attributes. E) price competition is vigorous.

Which of the following is NOT something a company's strategy is concerned with?

Management's choices about how quickly and closely to copy the strategies being used by successful rival companies.

D) the extra price the product commands exceeds the added costs of achieving the differentiation.

A broad differentiation strategy improves profitability when A) it is focused on product innovation. B) differentiating enhances product performance. C) the differentiating features appeal to sophisticated and prestigious buyers. D) the extra price the product commands exceeds the added costs of achieving the differentiation. E) the differentiator charges a price that is only fractionally higher than the industry's low-cost provider.

E) technological change is fast-paced and competition revolves around rapidly evolving product

A broad differentiation strategy works best in situations where A) technological change is slow-paced and new or improved products are infrequent. B) buyer needs and uses of the product are very similar. C) buyers incur low costs in switching their purchases to rival brands. D) buyers have a low degree of bargaining power and purchase the product frequently. E) technological change is fast-paced and competition revolves around rapidly evolving product features.

D) incorporating attractive or upscale attributes into its product offering at a lower cost than rivals.

A company achieves best-cost provider status by A) selling a product with the best cost at the best price. B) having the best cost (as compared to rivals) for each activity in the industry's value chain. C) providing buyers with the best attributes at the best cost. D) incorporating attractive or upscale attributes into its product offering at a lower cost than rivals. E) doing a better job than rivals of adopting the best operating practices.

E) it has some type of edge over rivals in attracting customers and coping with competitive forces.

A company achieves competitive advantage whenever A) it is the acknowledged market share leader. B) it is the industry's acknowledged technology leader. C) it has greater financial resources than its rivals. D) it has a well-known and well-regarded brand name, prefers offensive strategies to defensive strategies, and has a strong balance sheet. E) it has some type of edge over rivals in attracting customers and coping with competitive forces.

A) study buyer needs and behavior carefully to learn what buyers consider important, what they think has

A company attempting to be successful with a broad differentiation strategy has to A) study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for. B) incorporate more differentiating features into its product/service than rivals. C) concentrate its differentiating efforts on marketing and advertising (where almost all differentiating features are created). D) have a widely known and highly respected brand name image. E) provide a top-of-the-line product and sell it at premium prices.

C) it has some type of edge over rivals in attracting customers and coping with competitive forces.

A company can be said to have competitive advantage if A) it is the acknowledged leader in product quality. B) it has a different value chain than rivals. C) it has some type of edge over rivals in attracting customers and coping with competitive forces. D) it earns the largest profits of any firm in the industry. E) it has more resource strengths than weaknesses.

E) All of the above.

A company that succeeds in differentiating its product offering from those of its rivals can usually A) avoid having to compete on the basis of simply a low price. B) charge a price premium for its product. C) increase unit sales. D) gain buyer loyalty to its brand. E) All of the above.

C. all the strategically significant forces and factors outside a company's boundaries — general economic conditions, population demographics, societal values and lifestyles, technological factors, and governmental legislation and regulation.

A company's broad "macro-environment" refers to A. the industry and competitive arena in which the company operates. B. general economic conditions plus the factors driving change in the markets being served. C. all the strategically significant forces and factors outside a company's boundaries — general economic conditions, population demographics, societal values and lifestyles, technological factors, and governmental legislation and regulation. D. the competitive market environment that exists between a company and its competitors. E. the dominant economic features of a company's industry.

A) management's game plan for competing successfully—the specific efforts to please customers,offensive and defensive moves to counter the maneuvers of rivals, the responses to current market conditions, and the initiatives undertaken to improve the company's market position.

A company's competitive strategy deals with A) management's game plan for competing successfully—the specific efforts to please customers,offensive and defensive moves to counter the maneuvers of rivals, the responses to current market conditions, and the initiatives undertaken to improve the company's market position. B) what its strategy will be in such functional areas as R&D, production, sales and marketing, distribution, finance and accounting, and so on. C) its efforts to change its position on the industry's strategic group map. D) its plans for entering into strategic alliances, utilizing mergers or acquisitions to strengthen its market position, outsourcing some in-house activities to outside specialists, and integrating forward or backward. E) its plans for overcoming the five competitive forces.

Which one of the following statements is false?

A company's macro-environment includes all relevant external factors and influences that bear upon a company's decision to move to a different strategic group, change its strategic intent, or modify its objectives, strategy, or business model.

Which of the following statements about a company's realized strategy is true?

A company's realized strategy is typically a blend of deliberate/planned initiatives and emergent/unplanned reactive strategy elements.

Which of the following statements about a company's strategy is true?

A company's strategy is typically a blend of proactive and reactive strategy elements

D) buyers are large and have significant power to bargain down prices and buyers use the product in much the same ways.

A competitive strategy of striving to be the low-cost provider is particularly attractive when A) buyers are not very brand-conscious. B) most rivals are trying to be best-cost providers. C) there are many ways to achieve product differentiation that have value to buyers. D) buyers are large and have significant power to bargain down prices and buyers use the product in much the same ways. E) most rivals are pursuing focused low-cost or focused differentiation strategies.

C) price competition is especially vigorous and the offerings of rival firms are essentially identical,

A competitive strategy predicated on low-cost leadership tends to work best when A) there are widely varying needs and preferences among the various buyers of the product or service. B) there are many market segments and market niches, such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product. C) price competition is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products. D) buyers prefer that the products/services of competing sellers have widely varying attributes and prices. E) buyers have high switching costs and there is considerable diversity in how buyers use the product.

E) All of these.

A competitive strategy to be the low-cost provider in an industry works well when A) price competition among rival sellers is especially vigorous. B) there are few ways to achieve product differentiation that have value to buyers. C) buyers incur low costs in switching their purchases from one seller/brand to another. D) industry newcomers use low introductory prices to attract buyers and build a customer base. E) All of these.

What is a distinctive competence?

A competitively important activity that a company performs better than it's rivals - it thus represents a competitively superior resource strength.

What is a core competence?

A competitively important activity that a company performs better than other internal activities. (Central to a company's strategy adn competitiveness)

Which one of the following does not account for why a company's strategy evolves from one version to another?

A desire on the part of company managers to develop new strategy elements on the fly

Which one of the following is inaccurate as concerns a distinctive competence?

A distinctive competence is typically less restrictive for rivals to copy than a core competence.

Resource Fit

A diversified company exhibits Resource Fit when its business add to a company's overall resource strengths and have matching resource requirements and/or when the parent company has adequate corporate resources to support its business' needs and add value.

Parenting Advantage

A diversified firm has a parenting advantage when it is more able than other firms to boost the combined performance of its individual businesses through high-level guidance, general oversight, and other corporate-level contributions.

D) seeks to deliver superior value to buyers by satisfying their expectations on key quality/service/

A firm pursuing a best-cost provider strategy A) seeks to be the low-cost provider in the largest and fastest growing (or best) market segment. B) tries to have the best cost (as compared to rivals) for each activity in the industry's value chain. C) tries to outcompete a low-cost provider by attracting buyers on the basis of charging the best price. D) seeks to deliver superior value to buyers by satisfying their expectations on key quality/service/ features/performance attributes and beating their expectations on price (given what rivals are charging for much the same attributes). E) seeks to achieve the best costs by using the best operating practices and incorporating the best features and attributes.

C) with a product offering carefully designed to appeal to the unique preferences and needs of a narrow,

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

E) a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

A focused low-cost strategy can lead to attractive competitive advantage when A) buyers are looking for the best value at the best price. B) buyers are looking for a budget-priced product. C) buyers are price sensitive and are attracted to brands with low switching costs. D) demand in the target market niche is growing rapidly and a company can achieve a big enough volume to fully capture all the available scale economies. E) a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

E) serving buyers in the target market niche at a lower cost and lower price than rivals.

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

Every strategy needs: A. a distinctive element that attracts customers and produces a competitive edge. B. to include similar characteristics to rival company strategies. C. to pursue conservative growth built on historical strengths. D. to employ diverse and sundry operating practices for producing greater control over sales growth targets. E. to mimic the plans of the industry's most successful companies.

A. a distinctive element that attracts customers and produces a competitive edge.

Which of the following does NOT accurately characterize the differences between a localized multidomestic strategy and a global strategy? A. A global strategy entails extensive strategy coordination across countries and a multidomestic strategy entails little or no strategy coordination across countries. B. A global strategy often entails use of the best suppliers from anywhere in the world, whereas a multidomestic strategy may entail fairly extensive use of local suppliers (especially where use of local sources is required by host governments). C. A global strategy tends to involve use of similar distribution and marketing approaches worldwide, whereas a multidomestic strategy often entails adapting distribution and marketing to local customs and the culture of each country. D. A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide, whereas a multidomestic strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries. E. A global strategy relies upon the same technologies, competencies, and capabilities worldwide, whereas a multidomestic strategy often entails the use of somewhat different technologies, competencies, and capabilities as may be needed to accommodate local buyer tastes, cultural traditions, and market conditions.

A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide, whereas a multidomestic strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries.

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

A glocalization strategy.

Which of the following is NOT a potential benefit of cross-border strategic alliances or other cooperative arrangements between foreign and domestic companies? A. Gaining wider geographic coverage and access to attractive country markets through the foreign partner's familiarity with the market. B. Gaining better access to scale economies in production and/or marketing. C. Filling competitively important gaps in their technical expertise and/or knowledge of local markets. D. A greater ability to employ a global strategy (as opposed to a multicountry strategy). E. Sharing distribution facilities and dealer networks, thus mutually strengthening their access to buyers.

A greater ability to employ a global strategy (as opposed to a multicountry strategy).

B) either using its low-cost edge to underprice competitors and attract price sensitive buyers in large

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by A) cutting its price to levels significantly below the prices of rivals. B) either using its low-cost edge to underprice competitors and attract price sensitive buyers in large enough numbers to increase total profits or refraining from price-cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold. C) going all out to use its cost advantage to capture a dominant share of the market. D) spending heavily on advertising to promote its cost advantage and the fact that it charges the lowest prices in the industry-it can then use this reputation for low prices to build very strong customer loyalty, gain repeat sales year after year, and earn sustained profits over the long-term. E) outproducing rivals and thus having more units available to sell.

D) meaningfully lower overall costs than competitors.

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) meaningfully lower overall costs than competitors. E) higher unit sales than rivals.

Which of the following is NOT an accurate statement as concerns competing in the markets of foreign countries? A. A multi-country strategy is generally superior to a global strategy. B. There are country-to-country differences in consumer buying habits and buyer tastes and preferences. C. A company must contend with fluctuating exchange rates and country-to-country variations in host government restrictions and requirements. D. Product designs suitable for one country are often inappropriate in another. E. Market growth rates vary from country to country.

A multi-country strategy is generally superior to a global strategy.

Which one of the following does NOT account for WHY a company's strategy evolves from one version to another?

A need to promote stability and retain the status quo

Which of the following is NOT one of the strategy options for competing in the markets of foreign countries? A. A profit sanctuary strategy. B. An international strategy. C. A global strategy. D. A multicountry strategy. E. A transnational strategy.

A profit sanctuary strategy.

C) the offerings of rival firms are essentially identical, standardized, commodity-like products.

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when A) there are many ways to achieve product differentiation that buyers find appealing. B) buyers use the product in a variety of different ways and have high switching costs in changing from one seller's product to another. C) the offerings of rival firms are essentially identical, standardized, commodity-like products. D) entry barriers are high and competition from substitutes is relatively weak. E) the market is composed of many distinct segments with varying buyer needs and expectations.

What strategy is considered more conducive to transferring and leveraging subsidiary skills and capabilities across borders? A. A transnational strategy. B. An international strategy. C. A think-local, act-global strategy. D. A cross-border integrated strategy. E. A standardized integrated strategy.

A transnational strategy.

Why is it important for company managers to develop a worry list of strategic issues and problems that they need to address and to resolve? Why can't managers just skip this step and go directly to the task of choosing what strategy to employ?

A worry list is used to identify the specific issues/proboems that management needs to address, not to figure out what specific actions to take. Deciding what to do-which strategic actions to take and which strategic moves to make-comes later, i.e. when it is time to craft a company's strategy and choose form among various strategic alternatives.

Which one of the following statements is false? A) A company's macro-environment includes all relevant external factors and influences that bear upon a company's decision to move to a different strategic group, change its strategic intent, or modify its objectives, strategy, or business model. B) A company's strategy is increasingly effective the more it provides some insulation from competitive pressures and shifts the competitive battle in the company's favor. C) The task of driving forces analysis is to separate the major causes of industry change from the minor ones. D) Scouting competitors well enough to anticipate their next moves allows managers to prepare effective countermoves (perhaps even beat a rival to the punch) and to take rivals' probable actions into account in crafting their own best course of action. E) The degree to which an industry is attractive or unattractive is not the same for all industry participants or all potential entrants because the attractiveness of the opportunities an industry presents depends heavily on whether a company has the resource strengths and competitive capabilities to capture them.

A) A company's macro-environment includes all relevant external factors and influences that bear upon a company's decision to move to a different strategic group, change its strategic intent, or modify its objectives, strategy, or business model.

Winning a sustainable competitive edge over competitors generally hinges on which of the following?

A) Having a distinctive competitive product offering. B) Building competitively valuable expertise and capabilities not readily matched, and offering a distinctive product offering. C) Building experience, know-how, and specialized capabilities that have been perfected over a long period of time. D) Having "hard to beat" capabilities and impressive product innovation. E) All of these.

Evaluating a company's resources and competitive position does not include developing answers to which one of the following questions? A) How good is the company's value chain? B) Is the company competitively stronger or weaker than key rivals? C) What are the company's resource strengths and weaknesses and its external opportunities and threats? D) Are the company's prices and costs competitive? E) What strategic issues and problems merit front-burner managerial attention?

A) How good is the company's value chain?

Identify and explain the six questions to consider in evaluating a company's ability to compete successfully against market rivals. Give examples

A) How well is the present strategy working? B) Do the company's resources and capabilities have sufficient competitive power to give it sustainable advantage over competitors? C) Is the company able to seize market opportunities and overcome external threats to its future well being? (SWOT) D) Are the companies cost structure and value proposition competitive? E) On an overall basis, is the company competitively stronger or weaker than key rivals? F) What strategic issues and problems merit front-burner managerial attention?

In the course of crafting a strategy, it is common for management to:

A) abandon certain strategy elements that have grown stale or become obsolete. B) modify the current strategy when market and competitive conditions take an unexpected turn or some aspects of the company's strategy hit a stone wall. C) modify the current strategy in response to the fresh strategic maneuvers of rival firms. D) take proactive actions to improve this or that piece of the strategy. E) All of these.

Competitive pressures stemming from substitute products are weaker when A) buyers don't believe substitute products have equal or better features, and buyers' costs of switching to substitutes are relatively high. B) the industry consists of a relatively large number of rival sellers that are fairly equal in size and similar in competitive capability. C) entry barriers are moderately high but by no means prohibitive and there is a fairly small pool of entry candidates. D) a number of customers buy in large volumes and are in a strong bargaining position to win concessions from sellers. E) buyer loyalty to the products they are currently purchasing buyers' costs of switching to substitutes are relatively low.

A) buyers don't believe substitute products have equal or better features, and buyers' costs of switching to substitutes are relatively high.

Changing circumstances and ongoing managerial efforts to improve the strategy: A. account for Why a Companys Strategy Evolves over Time. B. explain why a company's strategic vision undergoes almost constant change. C. make it very difficult for a company to have concrete strategic objectives. D. make it very hard to know what a company's strategy really is. E. result in abandoned strategic visions.

A. account for Why a Companys Strategy Evolves over Time.

Which of the following does NOT represent a company resource?

Marketing and brand management

Strategic actions to eliminate a cost disadvantage A) can aim at lowering costs (1) in the suppliers' part of the industry value chain, (2) in a company's own internally-performed activities, and/or (3) in the forward channel portion of the value chain. B) work best when they aim at lowering the costs of performing those tasks and activities where the company has core competencies and distinctive competencies. C) work best when aimed at increasing the amount of the company's low-cost competitive assets and decreasing the amount of its high-cost competitive assets. D) are likely to be most effective when they are aimed at lowering the costs of the value chain activities that a company performs internally. E) are most likely to be successful when they involve efforts to concentrate more company resources and talents on those value chain activities where the company already has the lowest costs.

A) can aim at lowering costs (1) in the suppliers' part of the industry value chain, (2) in a company's own internally-performed activities, and/or (3) in the forward channel portion of the value chain.

Managers must be prepared to modify their strategy in response to:

A) changing circumstances that affect performance and their desire to improve the current strategy. B) competitor moves in the market and shifting needs of buyers. C) stagnating market and restrictive industrial opportunities. D) mounting evidence that the strategy is less effective. E) All of these

In identifying an industry's dominant economic features, there is a need to consider such things as A) market size and growth rate, the number of buyers, the scope of competitive rivalry, the number of rivals, demand-supply conditions, product innovation, the degree of product differentiation, the presence of scale economies and/or learning/experience curve effects, and the pace of technological change. B) the threat of additional entry into the industry and what the industry's key success factors are. C) the strength of competitive pressures from producers of substitute products and which competitors are in which strategic groups. D) the extent and importance of seller-supplier collaborative partnerships, the extent and importance of seller-buyer collaborative partnerships, and the bargaining leverage of sellers and buyers. E) All of these.

A) market size and growth rate, the number of buyers, the scope of competitive rivalry, the number of rivals, demand-supply conditions, product innovation, the degree of product differentiation, the presence of scale economies and/or learning/experience curve effects, and the pace of technological change.

For a company to translate performance of value chain activities into competitive advantage, it A) must be more cost efficient in how it performs value chain activities or better able to manage activities that add customer value. B) has to develop more core competencies than rivals by focusing primarily on R&D and market research. C) must be more adept than rivals in using benchmarking and activity-based costing. D) has to position itself in the strategic group where profit margins are highest. E) must adopt more best practices than rival firms.

A) must be more cost efficient in how it performs value chain activities or better able to manage activities that add customer value.

A company's strategy evolves over time as a consequence of:

A) the need to keep strategy in step with changing circumstances, market conditions, and changing customer needs and expectations. B) the proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy. C) the need to abandon some strategy features that are no longer working well. D) the need to respond to the newly initiated actions and competitive moves of rival firms. E) All of these.

Which one of the following does NOT account for WHY a company's strategy evolves from one version to another? A. A need to promote stability and retain the status quo B. The need to abandon some strategy elements that are no longer working well C. A need to respond to changing customer requirements and expectations D. A need to react to fresh strategic maneuvers on the part of rival firms E. The proactive efforts of company managers to improve obsolete aspects of the strategy

A. A need to promote stability and retain the status quo

Which of the following firms uses a deliberate strategy? A. A popular downtown theater that has been staging plays decides to begin booking rock and roll acts. B. An airline company cuts frills in order to cope with increasing fuel prices. C. An IT firm trims jobs during a recession. D. A smartphone company divests its tablet production branch after not gaining market share. E. An online jewelry site discontinues its line of turquoise rings due to lack of demand.

A. A popular downtown theater that has been staging plays decides to begin booking rock and roll acts.

A multinational company enters a new geographical location, considered an emerging market, with its established product line: laptops and tablets. Which of the following would NOT serve as a good strategic move to enhance profits? A. Creating a sales plan that aims to enhance initial sales and market share with low prices based on high operational costs B. Devising a marketing plan that aims at different customer segments with attractive advertisements and offers on products C. Implementing a diversification plan that aims at adding smartphones to the existing line of products D. Charting an acquisition plan that aims at acquiring small-scale companies looking for funding and with a similar product lineup E. Establishing a distribution plan that aims at setting up more supply outlets than any other rivals in the location

A. Creating a sales plan that aims to enhance initial sales and market share with low prices based on high operational costs

Telsteer Mobil, a smartphone manufacturer, is working on developing its next-generation products. It has decided on a strategy of focusing on a narrow buyer segment and outcompeting rivals by offering buyers customized product features for specialized needs and tastes. What basic strategic approach has Telsteer decided upon? A. Focused differentiation B. Best-cost provider C. Low-cost provider D. Broad differentiation E. Focused low-cost

A. Focused differentiation

Which of the following is true of a company's business model? A. It zeroes in on the customer value proposition and its related profit formula. B. It explains why the customer value proposition takes precedence over the related profit formula to generate optimum revenues. C. It details the ethical and socially responsible nature of the company's strategy. D. It explains how it intends to achieve the same market position as a rival. E. It is termed a winning model if it passes any one of the three strategy tests.

A. It zeroes in on the customer value proposition and its related profit formula.

Giving customers more value for the money by satisfying their expectations on key quality features, performance, and/or service attributes while beating their price expectations is a: A. best-cost provider strategy. B. focused low-cost strategy. C. focused differentiation strategy. D. broad differentiation strategy. E. low-cost provider strategy.

A. best-cost provider strategy.

The managerial purpose of setting objectives includes:

A. converting the strategic vision into specific performance targets—results and outcomes the organization wants to achieve. B. using the objectives as yardsticks for tracking the company's progress and performance. C. challenging and helping stretch the organization to perform at its full potential and deliver the best possible results. D. pushing company personnel to be more inventive and to exhibit more urgency in improving the company's financial performance and business position. E. All of these.

A company's mission statement should be sufficiently descriptive and should:

A. identify the company's services and products. B. specify the buyer's needs that the company seeks to satisfy. C. identify the customer or market that the company intends to serve. D. give the company its own identity. E. All of these.

A company achieves a competitive advantage when it: A. provides buyers with superior value compared to rival sellers or offers the same value at a lower cost. B. has a profitable business model. C. is able to maximize shareholder wealth. D. is consistently able to achieve both its strategic and financial objectives. E. has a strategy well-matched to its business model.

A. provides buyers with superior value compared to rival sellers or offers the same value at a lower cost.

A company's strategy in toto that tends to be a combination of proactive and reactive elements is known as its: A. realized strategy. B. emergent strategy. C. deliberate strategy D. visionary strategy. E. abandoned strategy.

A. realized strategy.

The competitive moves and business approaches a company's management is using to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve organizational objectives is referred to as its: A. strategy. B. mission statement. C. strategic intent. D. cost-price framework. E. market vision.

A. strategy.

Strategy is about competing differently than rivals, thus strategy success is about: A. the sources of sustained advantages and superior profitability. B. those emergent, unplanned, reactive, and adaptive plans that are more appropriate than deliberate or intended ones that drive the realized strategy. C. matching internal resources and capabilities to the industry environment. D. keeping the firm current with the rapid pace of change in the industry. E. replacing proactive and reactive measures by modified ongoing strategic elements to preserve company values.

A. the sources of sustained advantages and superior profitability.

The following ARE examples of a company's dynamic capability

A. A capacity to improve existing resources and capabilities B. Upgrades to R&D resources to drive product innovation C. A capacity to add new resources and capabilities to the competitive asset portfolio D. An ability to replace degraded resources with acquired capabilities

The following represent company resourceS?

A. A company's brand B. A productive input that is owned by the firm C. Marketing and brand management (INCORRECT) D. R&D teams E. A productive input that is controlled by the firm

Which of the following areas within a company's total value chain system can managers use to improve efficiency and effectiveness? A. A company's own internal activity segments, the suppliers' part, and the forward (distribution) channel portion of the value chain system B. A company's reinforced activities identified as efficiency measures for improved effectiveness C. Only the internal activity segments D. Only the suppliers' part E. Only the distributors' channel portion

A. A company's own internal activity segments, the suppliers' part, and the forward (distribution) channel portion of the value chain system

88. A strategy that incorporates elements of both multidomestic and global strategies is termed a "transnational" strategy, but sometimes it is referred to as what? ␣

A. A glocalization strategy.

7. Which of the following is NOT an accurate statement as concerns competing in the markets of foreign countries? ␣

A. A multi-country strategy is generally superior to a global strategy.

Which of the following is NOT one of the strategy options for competing in the markets of foreign countries? A. A profit sanctuary strategy B. An international strategy C. A global strategy. D. A multidomestic strategy E. A transnational strategy

A. A profit sanctuary strategy

57. Which of the following is NOT one of the strategy options for competing in the markets of foreign countries?

A. A profit sanctuary strategy.

What are value drivers? A. A set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect B. A firm's hidden success factor for creating over-the-top product features that will command the highest price in the industry C. A technique for easily identifying factors that validate a firm's performance D. A set of factors that verify the unique nature of a firm E. A set of guidelines for identifying the most promising upscale attributes to incorporate into a product

A. A set of factors (analogous to cost drivers) that are particularly effective in having a strong differentiation effect

What strategy is considered more conducive to transferring and leveraging subsidiary skills and capabilities across borders? A. A transnational strategy B. An international strategy C. A think-local, act-global strategy D. A cross-border integrated strategy E. A standardized integrated strategy

A. A transnational strategy

90. What strategy is considered more conducive to transferring and leveraging subsidiary skills and capabilities across borders?

A. A transnational strategy.

Domino's Pizza has a well-known slogan: "We'll deliver in 30 minutes or less, or it's free!" With it what has the pizza maker achieved? A. Built a unique customer value proposition B. Created a new delivery system C. Given a sense of exclusivity to its customers D. Coordinated with suppliers to better address customer needs E. Emphasized human resource management activities

A. Built a unique customer value proposition

Which of the following does NOT represent a company resource?

A. By strengthening the traditions that company executives are committed to maintaining B. Through deployment of a company's resources or some combination of its resources (INCORRECT) C. By talking openly about the problems of the present company and determining how new behaviors will improve performance D. By shifting from decentralized to centralized decision-making E. By urging company personnel to search outside the company for work practices and operating approaches that may be an improvement over what the company is presently doing

35. Which of the following factors does not determine whether to employ the entry strategy options? ␣ ␣

A. Cross-border transfer activities and home country advantages

Which of the following factors does NOT determine whether to employ entry strategy options? A. Cross-border transfer activities and home country advantages B. The nature of the firm's objectives C. Whether the firm has a full range of resources and capabilities needed to operate abroad D. Country-specific factors such as trade barriers E. Transaction costs involved (the cost of contracting with a partner and monitoring compliance with the terms of the contract)

A. Cross-border transfer activities and home country advantages

What supports competitive offensives in one market with resources and profits diverted from operations in another market? A. Cross-market subsidization B. A foreign market strategy C. A domestic-only company D. A home market offensive E. A multidomestic company

A. Cross-market subsidization

108.What supports competitive offensives in one market with resources and profits diverted from operations in another market?

A. Cross-market subsidization.

What is the foremost strategic issue that must be addressed by firms when operating in two or more foreign markets? A. Deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country B. Deciding on the appropriate level of sustainable profitability C. Deciding on the relative cost competitiveness of the home country D. Deciding on the degree of globalization to maintain expansion capabilities E. Deciding on the resources and capabilities of allies

A. Deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country

What is it called when a company sells its goods in foreign markets at prices that are below the prices at which it normally sells in its home market or well below its full costs per unit? A. Dumping practices B. Price-clearing system C. Clearance sale D. Discounting practices E. Competitive advantage

A. Dumping practices

110.What is it called when a company sells its goods in foreign markets at prices that are below the prices at which it normally sells in its home market or well below its full costs per unit?

A. Dumping practices.

Which of the following rivals make the best targets for an offensive attack? A. Firms with weaknesses in areas where the challenger is strong B. Companies that are financially strong and possess favorable competitive market positioning C. Large national firms with vast capabilities and intermittent trivial resource deficiencies D. Strong and financially secure market leaders E. Small local and regional firms with unrestrained capabilities

A. Firms with weaknesses in areas where the challenger is strong

The most powerful and widely used tool for diagnosing the principle competitive pressures in a market is the: A. Five Forces Model. B. SWOT. C. Competition Intensity Model. D. Dynamic Simulation Model. E. Competitor Profiling.

A. Five Forces Model.

29. Which of the following statements about fluctuating exchange rates and the related effects on companies competing in foreign markets is true?

A. Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets.

Which of the following statements about fluctuating exchange rates and the related effects on companies competing in foreign markets is true? A. Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets. B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Companies that are manufacturing goods in a particular country and are exporting much of what they produce lose out when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. D. The advantages of manufacturing goods in a particular country improve when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E. Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

A. Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets.

Benchmarking provides a company with which of the following? A. Hard evidence of cost competitiveness B. Proof of resource availability C. A company strategy D. Verification of total cost ownership E. Improvements to internal processes

A. Hard evidence of cost competitiveness

Benchmarking provides a company with which of the following? A. Hard evidence of cost competitiveness. B. Proof of resource availability. C. A company strategy. D. Verification of total cost ownership. E. Improvements to internal processes

A. Hard evidence of cost competitiveness.

Which one of the following is an accurate interpretation of the scores that result from doing a competitive strength assessment? A. High scores signal a strong competitive position and possession of a competitive advantage over companies with lower scores. B. High scores indicate that a company is a power-user of best practices while low scores signal minimal or ineffective adoption of best practices. C. The company with the lowest score has the lowest-cost value chain. D. The company with the lowest score has the strongest net competitive advantage over its rivals. E. High scores indicate which rivals are most vulnerable to competitive attack.

A. High scores signal a strong competitive position and possession of a competitive advantage over companies with lower scores.

Which of the following is not a good example of a marketing-related key success factor? A. High utilization of fixed assets B. A well-known and well-respected brand name C. Breadth of product line and product selection D. Clever advertising E. Courteous, personalized customer service

A. High utilization of fixed assets

Which of the following is NOT a major question to ask in thinking strategically about industry and competitive conditions in a given industry? A. How many companies in the industry have good track records for revenue growth and profitability? B. What strategic moves are rivals likely to make next? C. What are the industry's key factors for future competitive success? D. Is the outlook for the industry conducive to providing attractive profitability? E What are the driving forces in the industry, and what impact will these changes have on competitive intensity and industry profitability?

A. How many companies in the industry have good track records for revenue growth and profitability?

Which of the following is not a major question to ask in thinking strategically about industry and competitive conditions in a given industry? A. How many companies in the industry have good track records for revenue growth and profitability? B. What strategic moves are rivals likely to make next? C. What are the key factors for future competitive success? D. Does the outlook for the industry offer good prospects for profitability? E. What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability?

A. How many companies in the industry have good track records for revenue growth and profitability?

Which of the following is not a major question to ask in thinking strategically about industry and competitive conditions in a given industry? A. How many companies in the industry have good track records for revenue growth and profitability? B. What strategic moves are rivals likely to make next? C. What are the key factors for future competitive success? D. Does the outlook for the industry present the company with sufficiently attractive prospects for profitability? E. What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability?

A. How many companies in the industry have good track records for revenue growth and profitability?

Which of the following most accurately reflect a company's resource strengths? A. Its human, physical and/or organization assets; its skills and competitive capabilities; and achievements or attributes that enhance the company's ability to compete effectively B. The sizes of its unit sales, revenues, and market share vis-à-vis those of key rivals C. The sizes of its profit margins and return on investment vis-à-vis those of key rivals D. Whether it has more primary activities in its value chain than close rivals and a better overall value chain than these rivals E. Whether it has more core competencies than close rivals

A. Its human, physical and/or organization assets; its skills and competitive capabilities; and achievements or attributes that enhance the company's ability to compete effectively

Which of the following is NOT an accurate statement as concerns competing in the markets of foreign countries? A. Localizing a global company's product offerings country-by-country leads to low-cost advantage. B. There are country-to-country differences in consumer buying habits and buyer tastes and preferences. C. A company must contend with fluctuating exchange rates and country-to-country variations in host government restrictions and requirements. D. Product designs suitable for one country are often inappropriate in another. E. Market growth rates vary from country to country.

A. Localizing a global company's product offerings country-by-country leads to low-cost advantage.

The following ARE good examples of a company's resources

A. More intellectual capital and better e-commerce capabilities than rivals B. Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance product quality and performance C. Having higher earnings per share and a higher stock price than key rivals (incorrect) D. A well-known brand name and enjoying the confidence of customers E. A lower-cost value chain than rivals

For a company to translate performance of value chain activities into competitive advantage, it A. Must (1) develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers (2) be more cost efficient in how it performs value chain activities such that it has a low-cost advantage B. has to develop more core coompetencies than rivals. C. Must be more adept than rivals in using benchmarking and activity-based costing. D. has to position itself in the strategic group where profit margins are highest E. must adopt more best practices than rival firms.

A. Must (1) develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers (2) be more cost efficient in how it performs value chain activities such that it has a low-cost advantage

A drink manufacturer finds setting up a plant to make its own bottle caps expensive and technically difficult. Which of the following will be most helpful in solving the manufacturer's problem? A. Outsourcing B. Achieving economies of scale C. Lowering input costs D. Increasing bargaining power E. Going for a vertical integration with a distributor

A. Outsourcing

Which of the following is NOT one of the pitfalls of pursuing a differentiation strategy? A. Over-emphasizing efforts to strongly differentiate the company's product from those of rivals rather than being content with weak product differentiation B. Offering trivial improvements in quality, service, or performance features C. Overcharging for the differentiating features D. Adding so many frills and extra features that the product exceeds the needs of buyers E. Overspending on efforts to differentiate the company's product offering

A. Over-emphasizing efforts to strongly differentiate the company's product from those of rivals rather than being content with weak product differentiation

principal components of strategic significance in the PESTEL analysis

A. Political factors including the extent to which government intervenes in the economy B. Economic conditions that include the general economic climate and specific factors such as interest rates, inflation rate, and unemployment rate, as well as conditions in the stock and bond markets that can affect consumer confidence C. Socio-cultural forces including societal values, attitudes, cultural factors, and lifestyles that impact business D. Technological factors includes the pace of change and technical developments that have the potential for impacting society

Which of the following is generally not considered as a barrier to entry? A. Rapid market growth B. Sizable capital requirements and an array of regulatory requirements C. Strong buyer loyalty to existing brands D. Sizable economies of scale in production E. Difficulties in gaining access to distribution and securing adequate space of retailers' shelves

A. Rapid market growth

Which of the following is generally not considered as a barrier to entry? A. Rapid market growth B. Sizable capital requirements and an array of regulatory requirements C. Strong buyer loyalty to existing brands D. Sizable economies of scale in production E. Difficulties in gaining access to technological know-how

A. Rapid market growth

The following ARE analytical tools for revealing a company's competitiveness and for helping to match the strategy to the company's own particular circumstances?

A. Resource and capability analysis B. SWOT analysis C. Value chain analysis D. Bench-pressing analysis (wrong/not one) E. Competitive strength analysis

Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called A. SWOT analysis. B. competitive asset/liability analysis. C. competitive positioning analysis. D. strategic resource assessment. E. company resource mapping

A. SWOT analysis.

Which of the following is the result of a well-conceived and communicated strategic vision?

A. Senior executives solidify their own view of the firm's long-term direction. B. The risk of rudderless decision-making is minimized. C. Organizational members support the changes internally that will help make the vision a reality. D. Assists the organization in preparing for the future. E. All of these.

An organic foods manufacturer insists on portraying the cleanliness of its farms in its advertisements, charges a higher price for its products, and sells its products only through reputable distributors. What strategy is the manufacturer using to deliver superior value to customers? A. Signaling the value of the company's product offering to buyers B. Incorporating intangible features C. Incorporating tangible features D. Lowering the buyer's overall cost E. Lowering the overall bargaining power from suppliers

A. Signaling the value of the company's product offering to buyers

The following represent potential core competences

A. Skills in manufacturing a high-quality product at a low cost B. Know-how in creating and operating systems for cost-efficient supply chain management C. The capability to fill customer orders accurately and swiftly D. Having a wider product line than rivals (INCORRECT) E. The capability to speed new or next-generation products to the marketplace

What is the best technique for revealing the different market or competitive position that rival firms occupy in the industry? A. Strategic group mapping B. Global industry change C. Dynamic mapping analysis D. Distribution analysis E. None of these.

A. Strategic group mapping

Which of the following is NOT one of the ways that a company can achieve cost-efficient management of its value chain activities? A. Striving to ensure a corporate diversity policy is introduced with effective controls B. Using the company's strong bargaining power vis-à-vis suppliers or others in the value chain C. Being alert to the cost advantages of outsourcing or vertical integration D. Striving to capture all available economies of scale E. Motivating employees through incentives and company culture

A. Striving to ensure a corporate diversity policy is introduced with effective controls

A fast-food restaurant stocks bread, meat, sauces, and other main ingredients, but does not assemble and cook its burgers and sandwiches until a customer places an order. Which cost driver is the restaurant efficiently using to cut costs? A. Supply chain efficiencies B. Economies of scale C. Incentive systems and culture D. Bargaining power E. Capacity utilization

A. Supply chain efficiencies

Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity? A. The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average B. An assessment of which firms in the industry have the best and worst competitive strategies, whether the number of strategic groups in the industry is increasing or decreasing, and whether economies of scale and experience curve effects are a key success factor C. Whether there are more than five key success factors and more than five barriers to entry D. Constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group E. Whether the market leaders

A. The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average

Which of the following factors should a company consider when determining if an industry offers good prospects for attractive profits? A. The industry's growth potential, whether competition appears destined to become stronger or weaker, how the industry's driving forces might affect overall industry profitability, the company's competitive position relative to rivals, and the company's proficiency in performing industry key success factors B. An assessment of which firms in the industry have the best and worst competitive strategies, whether the number of strategic groups in the industry is increasing or decreasing, and whether economies of scale and experience curve effects are a key success factor C. Whether there are more than five key success factors and more than five barriers to entry D. Constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group E. Whether the market leaders enjoy competitive advantages and how hard it is to develop a strongly differentiated product

A. The industry's growth potential, whether competition appears destined to become stronger or weaker, how the industry's driving forces might affect overall industry profitability, the company's competitive position relative to rivals, and the company's proficiency in performing industry key success factors

The following are pertinent in identifying a company's present strategy

A. The key functional strategies (R&D, supply chain management, production, sales and marketing, HR, and finance) a company is employing B. Management's planned, proactive moves to outcompete rivals (via better product design, improved quality or service, wider product lines, and so on) C. The company's mission, strategic objectives, and financial objectives (wrong answer) D. Moves to respond and react to changing conditions in the macro-environment and in industry and competitive conditions E. The strategic role of its collaborative partnerships and strategic alliances with others

Which of the following is NOT an example of an external threat to a company's future profitability? A. The lack of a distinctive competence B. New legislation that entails burdensome and costly government regulations C. Slowdowns in market growth D. More intense competitive pressures E. The introduction of restrictive trade policies in countries where the company does business

A. The lack of a distinctive competence

Which of the following is not an example of an external threat to a company's future profitability? A. The lack of a distinctive competence B. New legislation that entails burdensome and costly government regulations C. Slowdowns in market growth D. More intense competitive pressures E. The introduction of restrictive trade policies in countries where the company does business

A. The lack of a distinctive competence

The following are examples of a threat to a company's future profitability and well-being

A. The likely entry of potent new competitors B. The lack of a well-known brand name with which to attract new customers and help retain existing customers (incorrect) C. Shifts in buyer needs and tastes away from the industry's product D. Costly new regulatory requirements E. Growing bargaining power on the part of the company's major customers and major suppliers

A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true? A. The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs. B. The manufacturer has efficiently capitalized on the experience and learning-curve effects within the company. C. The manufacturer has enhanced utilization by allowing depreciation and other fixed costs to be spread over a larger unit volume. D. The manufacturer has sacrificed quality by using a lower-cost input. E. The manufacturer has effectively reduced its operating costs by outsourcing its activities.

A. The manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs.

Which of the following is NOT one of the five typical sources of competitive pressures? A. The power and influence of industry driving forces B. The bargaining power of suppliers and seller-supplier collaboration C. The threat of new entrants into the market D. The attempts of companies in other industries to win customers over to their own substitute products E. The market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry

A. The power and influence of industry driving forces

Which of the following is not one of the five typical sources of competitive pressures? A. The power and influence of industry driving forces B. The bargaining power of suppliers and seller-supplier collaboration C. The threat of new entrants into the market D. The attempts of companies in other industries to win customers over to their own substitute products E. The market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry

A. The power and influence of industry driving forces

8. Which of the following is generally NOT considered a barrier to entry? A. The reaction of incumbent firms to rapid market growth B. High capital requirements and restrictive government policies C. Strong brand preferences and a high degree of customer loyalty D. Cost advantages due to the economies of scale in production enjoyed by incumbent firms E. Strong "network effects" in customer demand

A. The reaction of incumbent firms to rapid market growth

Which of the following is generally NOT considered a barrier to entry? A. The reaction of incumbent firms to rapid market growth B. High capital requirements and restrictive government policies C. Strong brand preferences and a high degree of customer loyalty D. Cost advantages due to the economies of scale in production enjoyed by incumbent firms E. Strong "network effects" in customer demand

A. The reaction of incumbent firms to rapid market growth

Which of the following factors represents the strategically relevant political factors in the macroenvironment that will influence the performance of all firms across the board? A. The strength of the federal banking system B. The exogenous forces related to the general environmental demand C. Social factors that could fuel a political agenda and create greater transparency D. Bailouts and energy policies that are industry-specific E. Tax policy, fiscal policy, and tariffs providing impetus for anti-trust matters

A. The strength of the federal banking system

30. A weaker U.S. dollar is an economically favorable exchange-rate shift for manufacturing plants based in the United States.

A. This is a true statement.

A weaker U.S. dollar is an economically favorable exchange-rate shift for manufacturing plants based in the United States. A. This is a true statement. B. No, the U.S. dollar must be stronger. C. Yes, because it provides for a weakened foreign demand for U.S.-made goods. D. Yes, because it makes such plants less cost competitive with foreign plants. E. Yes, because it provides incentives of foreign companies to locate manufacturing facilities in the U.S. to make goods for U.S. consumers.

A. This is a true statement.

Why do companies decide to enter a foreign market? A. To capture economies of scale in product development, manufacturing, or marketing B. To raise input costs through greater pooled purchasing power C. To decrease the rate at which they accumulate experience and move up the learning curve D. To concentrate risk within a broader base of countries, especially when sales are down in one area and the company can undermine sales elsewhere E. To exploit the natural resources found within its home market

A. To capture economies of scale in product development, manufacturing, or marketing

4. Why do companies decide to enter a market?

A. To capture economies of scale in product development, manufacturing, or marketing.

Which of the following is NOT a purpose of a defensive strategy? A. To increase the risk of having to defend an attack B. To weaken the impact of any attack that occurs C. To pressure challengers to aim their efforts at other rivals D. To help protect a competitive advantage E. To decrease the risk of being attacked

A. To increase the risk of having to defend an attack

For a company to have competitively potent resources and capabilities, they must:

A. be in sync with changes in the company's own strategy. B. be in sync with its efforts to achieve a resource-based competitive advantage. C. fully support company efforts to attract customers. D. combat competitors' newly launched offensives to win bigger sales and market shares. E. All of these. (CORRECT)

Which one of the following is not a reason why industry members are often motivated to enter into collaborative partnerships with key suppliers? A. To reduce the costs of switching suppliers B. To speed the availability of next-generation components C. To enhance the quality of parts and components being supplied and reduce defect rates D. To squeeze out important cost savings for both themselves and their suppliers E. To reduce inventory and logistics costs

A. To reduce the costs of switching suppliers

A competitively superior resource or capability is a company's A. True strategic asset providing a competitive advantage. B. Equally valuable substitute resource providing a competitive advantage. C. Assessment of the availability of superior substitutes. D. Unsurpassed worker productivity and product quality. E. Unique piecework incentive system providing a competitive advantage.

A. True strategic asset providing a competitive advantage.

Which of the following is NOT a viable strategy option for a local company in competing against global challengers? A. Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments B. Developing business models to exploit shortcomings in local distribution networks or infrastructures C. Taking advantage of low-cost labor and other competitively important local workforce qualities D. Transferring a company's expertise to cross-border markets and initiating actions to contend on a global scale E. Using acquisitions and rapid growth strategies to defend against expansion-minded multinationals

A. Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments

Which of the following is NOT one of the six questions that comprise the task of evaluating a company's resources and competitive position? A. What are the company's most profitable geographic market segments? B. How well is the company's present strategy working? C. How do a company's value chain activities impact its cost structure and customer value proposition? D. Is the company competitively stronger or weaker than key rivals? E. What strategic issues and problems merit front-burner managerial attention?

A. What are the company's most profitable geographic market segments?

Which of the following is not one of the six questions that comprise the task of evaluating a company's resources and competitive position? A. What are the company's most profitable geographic market segments? B. How well is the company's present strategy working? C. Are the company's cost structure and value proposition competitive? D. Is the company competitively stronger or weaker than key rivals? E. What strategic issues and problems merit front-burner managerial attention?

A. What are the company's most profitable geographic market segments?

Which of the following is NOT a question asked to deduce a marketing-related key success factor? A. What are the industry product R&D capabilities and expertise in product design? B. What basis do buyers choose between the competing brands of sellers? C. What product attributes and service characteristics are crucial? D. What resources must a company have to be competitive? E. What shortcomings are almost certain to put a company at a significant disadvantage?

A. What are the industry product R&D capabilities and expertise in product design?

In which of the following situations is employing a "think local, act local" multidomestic strategy highly questionable? A. When a company desires to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide B. When there are significant country-to-country differences in customer preferences and buying habits industry is characterized by big economies of scale and strong experience curve effects C. When the trade restrictions of host governments are diverse and complicated D. When there are significant country-to-country differences in distribution channels and marketing methods E. When host governments enact regulations requiring that products sold locally meet strictly defined manufacturing specifications or performance standards

A. When a company desires to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide

14. In which of the following circumstances are competitive pressures associated with the bargaining power of buyers NOT relatively strong?

A. When buyer demand is growing rapidly

In which of the following circumstances are competitive pressures associated with the bargaining power of buyers NOT relatively strong? A. When buyer demand is growing rapidly B. When buyers are relatively well-informed about sellers' products, prices, and costs C. When buyers pose a credible threat to integrate backward into the product market of sellers D. When sellers' products are weakly differentiated, making it easy for buyers to switch to competing brands E. When buyers have considerable discretion over whether and when they purchase the product

A. When buyer demand is growing rapidly

In which of the following circumstances are competitive pressures associated with the bargaining power of buyers not relatively strong? A. When buyer demand is growing rapidly B. When buyers are relatively well informed about sellers' products, prices, and costs C. When buyers pose a major threat to integrate backward into the product market of sellers D. When sellers' products are weakly differentiated, making it easy for buyers to switch to competing brands E. When buyers have considerable discretion over whether and when they purchase the product

A. When buyer demand is growing rapidly

Which of the following conditions acts to weaken buyer bargaining power? A. When buyers are unlikely to integrate backward into the business of sellers B. When buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs C. When the costs incurred by buyers in switching to competing brands or to substitute products are relatively low D. When the products of rival sellers are weakly differentiated and buyers have considerable discretion over whether and when they purchase the product E. When buyers are few in number and/or often purchase in large quantities

A. When buyers are unlikely to integrate backward into the business of sellers

Which of the following conditions acts to weaken buyer bargaining power? A. When buyers are unlikely to integrate backward into the business of sellers B. When buyers are well informed about sellers' products, prices, and costs C. When the costs incurred by buyers in switching to competing brands or to substitute products are relatively low D. When buyers have the ability to postpone purchases if they don't like the prices offered by sellers E. When buyers are few in number and/or often purchase in large quantities

A. When buyers are unlikely to integrate backward into the business of sellers

The following are reliable measures of how well a company's current strategy is working?

A. Whether the company's sales are growing faster, slower, or about the same pace as the industry as a whole, thus resulting in a rising, falling, or stable market share B. Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product (incorrect) C. The firm's image and reputation with its customers D. Whether its profit margins are rising or falling and how large its margins are relative to those of its rivals E. How well the firm stacks up against rivals on technology, product innovation, customer service, product quality, price, speed in getting newly developed products to market, and other relevant factors on which buyers base their choice of which brand to purchase

Whether a resource or capability can support a competitive advantage is determined by which two tests? A. Whether the resource or capability is competitively valuable and/or is something that rivals lack. B. Whether the resource or capability is rare and/or is hard to copy. C. Whether the resource or capability can be trumped and/or is hard to copy. D. Whether the resource or capability is competitively valuable and/or are there good substitutes available for the resource. E. Whether the resource or capability is hard to copy and/or can be trumped by different types of resources and capabilities.

A. Whether the resource or capability is competitively valuable and/or is something that rivals lack.

34. Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called: A. a SWOT analysis. B. a competitive asset/liability analysis. C. a competitive positioning analysis. D. a strategic resource assessment. E. a company resource mapping.

A. a SWOT analysis.

Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called: A. a SWOT analysis. B. a competitive asset/liability analysis. C. a competitive positioning analysis. D. a strategic resource assessment. E. a company resource mapping.

A. a SWOT analysis.

36. When an activity becomes something a company has learned to perform proficiently and capably, it is said to have: A. a competence. B. a competitive advantage over rivals. C. a key value chain proficiency. D. a distinctive capability. E. a resource advantage.

A. a competence.

When an activity becomes something a company has learned to perform proficiently and capably, the company is said to have: A. a competence. B. a competitive advantage over rivals. C. a key value chain proficiency. D. a distinctive capability. E. a resource advantage.

A. a competence.

101.Transferring core competencies and resource strengths from one country market to another is ␣ ␣

A. a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage.

Transferring core competencies and resource strengths from one country market to another is: A. a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage. B. best accomplished with a multidomestic strategy as opposed to a global strategy. C. feasible only with a global strategy; it can't be done with a multidomestic strategy. D. unlikely to result in a competitive advantage. E. nearly always the easiest and most sure-fire way to build competitive advantage in trying to compete successfully in foreign markets.

A. a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage.

The formation of a new corporation, jointly owned by two or more companies agreeing to share in the revenues, expenses, and control, is known as: A. a joint venture. B. a limited liability company. C. a partnership. D. sole proprietorship. E. an S corporation.

A. a joint venture.

For every emerging opportunity there exists: A. a market penetration curve, and this typically has an inflection point where the business model falls into place. B. an opportunity to achieve first-mover status, which depends on analyzing the competitive status curve where all the potential rivals are encoded. C. an emerging pitfall that is a counterpoint to the intended growth. D. a normal curve scenario which signifies the average growth curve will be opportunistic. E. an intense competition that constrains the company's prospects for rapid growth and superior profitability.

A. a market penetration curve, and this typically has an inflection point where the business model falls into place.

The difference between a resource and a capability is: A. a resource is a productive input or competitive asset, whereas a capability is the capacity of the firm to perform some internal activity competently. B. a resource is a reserve supply or back-up supply function, whereas a capability is the ability to manage the resource function. C. a resource is a mechanism used for carrying out some responsibility, whereas a capability possesses the ability to monitor the resource D. a resource represents the firm's fixed assets, whereas a capability defines whether the firm is competent to perform some function with these assets. E. a resource represents the firm's human assets, whereas a capability defines the skills and knowledge of these human resources.

A. a resource is a productive input or competitive asset, whereas a capability is the capacity of the firm to perform some internal activity competently.

To succeed in predicting the next strategic moves and countermoves of close or key rivals, it is useful to consider such indicators as: A. a rival's current strategy, objectives, capabilities, and assumptions about itself and the industry. B. a rival's market share, customer segmentation, business model, and product proposition. C. a rival's appetite as an acquisition candidate. D. a rival's geographic market, product offerings, and strategic grouping. E. All of these.

A. a rival's current strategy, objectives, capabilities, and assumptions about itself and the industry.

A company's resources can include:

A. a skill, specialized expertise, or competitively important capability. B. valuable human assets and intellectual capital. C. an achievement or attribute that puts the company in a position of market advantage. D. competitively valuable alliances or cooperative ventures. E. All of these. (CORRECT)

62. A multidomestic strategy represents: ␣ ␣

A. a think-local, act-local approach to international strategy.

Success with a best-cost provider strategy designed to outcompete high-end differentiators requires: A. achieving significantly lower costs in providing the upscale features. B. providing significantly better product attributes in order to justify a price above what low-cost leaders are charging. C. matching the company's resources and capabilities to a low-cost provider status. D. motivating buyers to purchase upscale features that match rivals. E. achieving the lowest costs in the industry.

A. achieving significantly lower costs in providing the upscale features.

39. Companies that seize opportunities in the marketplace are usually those that have been: A. actively waiting, staying alert with diligent market reconnaissance and preparing internally to capitalize on potential opportunities. B. the market winners in the past, because they have a proven record and are the best competitively. C. adopting every opportunity for understanding that not all opportunities will be successful and rewarded commensurately. D. first movers willing to accept business risk. E. All of these.

A. actively waiting, staying alert with diligent market reconnaissance and preparing internally to capitalize on potential opportunities.

The payoff of good scouting reports on rivals is an improved ability to: A. anticipate what moves rivals are likely to make next, thereby providing a valuable assist in outmaneuvering them in the marketplace. B. determine which rivals are in the best strategic group. C. figure out how many key success factors a rival has. D. determine whether a rival is gaining or losing market share. E. determine whether a rival has the best strategy and is the industry leader.

A. anticipate what moves rivals are likely to make next, thereby providing a valuable assist in

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

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

The best strategic alliances: A. are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit. B. are those whose purpose is to create an industry key success factor. C. are those which help a company move quickly from one strategic group to another. D. involve joining forces in R&D to develop new technologies, cheaper than a company could develop the technology on its own. E. aim at raising an industry's barriers to entry.

A. are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit.

The key success factors in an industry A. are the strategy elements, intangible assets, and competitive capabilities that most affect industry members' abilities to prosper in the marketplace. B. are determined by the industry's driving forces. C. hinge on how many different strategic groups the industry has. D. depend on how many rivals are trying to move from one strategic group to another. E. are a function of such considerations as how many firms are in the industry, how many have market shares above 5%, and whether the business models being used are similar or diverse.

A. are the strategy elements, intangible assets, and competitive capabilities that most affect industry members' abilities to prosper in the marketplace.

The key success factors in an industry: A. are those competitive factors that most affect industry members' abilities to prosper in the marketplace— the particular strategy elements, product attributes, operational approaches, resources, and competitive capabilities that spell the difference between being a strong competitor and a weak one, and between profit and loss. B. are determined by the industry's driving forces, which are essential to surviving and thriving in the industry. C. hinge on how many different strategic groups the industry has operating within the industry and their level of profitability and sustainable advantages. D. depend on how many rivals are trying to move from one strategic group to another without losing momentum. E. are a function of such considerations as how many firms are in the industry, how many have market shares above 5 percent, and whether the business models being used are similar or diverse.

A. are those competitive factors that most affect industry members' abilities to prosper in the marketplace— the particular strategy elements, product attributes, operational approaches, resources, and competitive capabilities that spell the difference between being a strong competitor and a weak one, and between profit and loss.

A vertical integration strategy can expand the firm's range of activities: A. backward into sources of supply and/or forward toward end users. B. backward into other industry business-lines and/or forward to suppliers of raw materials. C. to enable the supply chain the opportunity for expansion. D. to complement the industry's horizontal value chain line of profitability. E. to establish full integration by participating in a tapered integration (without the outsourced and in-house activities).

A. backward into sources of supply and/or forward toward end users.

For a particular company resource/capability to have real competitive power and perhaps qualify as a basis for competitive advantage, it should A. be hard for competitors to copy, be rare and something rivals lack, be competitively valuable, and not be easily trumped by substitute resource strengths possessed by rivals. B. be something that a company does internally rather than in collaborative arrangements with outsiders. C. be patentable. D. be an industry key success factor and occupy a prime position in the company's value chain. E. have the potential for lowering the firm's unit costs.

A. be hard for competitors to copy, be rare and something rivals lack, be competitively valuable, and not be easily

For a particular company resource/capability to have real competitive power and perhaps qualify as a basis for competitive advantage, it should: A. be hard to copy, be rare and something rivals lack, be competitively valuable, and not be easily trumped by substitute resource strengths possessed by rivals. B. be something that a company does internally rather than in collaborative arrangements with outsiders. C. be patentable. D. bean industry key success factor and occupy a prime position in the company's value chain. E. have the potential for lowering the firm's unit costs.

A. be hard to copy, be rare and something rivals lack, be competitively valuable, and not be easily trumped by substitute resource strengths possessed by rivals.

The road to competitive advantage begins with management's efforts to: A. build organizational expertise in performing certain competitively important value chain activities. B. understand the value chain activities providing opportunity for growth. C. build value-creating activities all along the value chain. D. ensure superiority over rivals in performing even unimportant tasks and activities extremely well. E. maintain the existing chain of activities to lower costs.

A. build organizational expertise in performing certain competitively important value chain activities.

Using the Five Forces model of competition to determine the character and strength of the competitive forces within a given industry involves: A. building the picture of competition in three steps: (1) identify the different parties involved, along with specific factors that bring about competitive pressures; (2) evaluate how strong the pressures stemming from each of the five forces are (strong, moderate or weak); and (3) determining whether the collective impact of the five competitive forces is conducive to earning attractive profits in the industry. B. building the picture of competition in two steps: (1) determining which rival has the biggest competitive advantage and (2) assessing whether the competitive advantages possessed by various industry members allow most industry members to earn above-average profits. C. evaluating whether competition is being intensified or weakened by the industry's driving forces and key success factors. D. assessing whether the collective impact of all five forces is weak enough to allow industry members to go on the offensive or use a defensive strategy to insulate against fierce competitive pressures. E. gauging the overall strength of competition based on how many industry rivals are operating with a competitive advantage and how many are operating at a competitive disadvantage.

A. building the picture of competition in three steps: (1) identify the different parties involved, along with specific factors that bring about competitive pressures; (2) evaluate how strong the pressures stemming from each of the five forces are (strong, moderate or weak); and (3) determining whether the collective impact of the five competitive forces is conducive to earning attractive profits in the industry.

Broad differentiation strategies generally work best in market circumstances where: A. buyer needs and uses of a product are diverse and not fully satisfied by a standardized product. B. most buyers have similar needs and use the product in the same 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 product switching costs are quite low. E. market competition revolves around slowly evolving product features.

A. buyer needs and uses of a product are diverse and not fully satisfied by a standardized product.

The competitive pressures from substitute products tend to be stronger when A. buyers are relatively comfortable with the quality and performance of substitutes and the costs to buyers of switching over to the substitutes are low. B. there are more than 10 sellers of substitute products. C. substitutes exhibit the latest in technological innovation. D. buyers have high psychic costs in severing existing brand relationships and establishing new ones. E. demand for the industry's product is not very price sensitive.

A. buyers are relatively comfortable with the quality and performance of substitutes and the costs to buyers of switching over to the substitutes are low.

An offensive to yield good results can be short if: A. buyers respond immediately (to a dramatic cost-based price cut or imaginative ad campaign). B. competition creates an appealing new product. C. the technology needs debugging. D. new production capacity needs to be installed. E. consumer acceptance of an innovative product takes time.

A. buyers respond immediately (to a dramatic cost-based price cut or imaginative ad campaign).

Using domestic plants as a production base for exporting goods to selected foreign country markets: A. can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets. B. can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country and does not have to compete head-to-head against strong host country competitors. C. can be a powerful strategy since a company can maintain a one-country production base allowing it to capitalize on company competencies and capabilities. D. can be a weak strategy when competitors are pursuing multi-country strategies. E. can be a powerful strategy because a company is not vulnerable to fluctuating exchange rates.

A. can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets.

Benchmarking involves: A. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities. B. checking whether a company has achieved more of its financial and strategic objectives over the past five years relative to the other firms it is in direct competition with. C. studying whether a company's resource strengths are more/less powerful than the resource strengths of rival companies. D. studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world-class competitive capabilities. E. comparing the best practices in one industry against the best practices in another industry.

A. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities.

Benchmarking involves A. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs of these activities. B. checking whether a company has achieved more of its financial and strategic objectives over the past five years relative to the other firms it is in direct competition with. C. studying whether a company's resource strengths are more/less powerful than the resource strengths of rival companies. D. studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world class competitive capabilities. E. comparing the best practices in one industry against the best practices in another industry.

A. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs of these activities.

Supplier bargaining power is weaker when A. good substitute inputs exist or new ones emerge. B. the cost of switching from one supplier to another is high. C. suppliers furnish a critical part or component. D. buying firms are looking for suppliers with good just-in-time supply capabilities. E. a few large suppliers are the primary sources of a particular item.

A. good substitute inputs exist or new ones emerge

A company's value-creating activities can offer a competitive advantage in one of two ways: A. contribute to greater efficiency and lower costs and provide a basis for differentiation. B. contribute expense savings and enhance product exclusivity. C. reduce cost disadvantages and market price anomalies. D. contribute customer experience value and conserve operating functionality. E. contribute to competitive assets and discontinue distinctive competencies.

A. contribute to greater efficiency and lower costs and provide a basis for differentiation.

The objective of a best-cost provider strategy is to: A. deliver superior value to value-conscious buyers at a comparatively lower price than rivals. B. offer buyers the industry's best-performing product at the best cost and best (lowest) price in the industry. C. attract buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. D. out-compete rivals using low-cost provider strategies. E. translate its best-cost status into achieving the highest profit margins of any firm in the industry.

A. deliver superior value to value-conscious buyers at a comparatively lower price than rivals.

The rivalry among competing firms tends to be more intense when A. demand for the product is growing slowly, one or maybe several industry members become dissatisfied with their market position, buyers have low switching costs, and when strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to build market share. B. the products/services of rival sellers are strongly differentiated and buyer demand is strong. C. rivals are relatively content with their market position. D. there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members. E. there are fewer firms in the industry that have unequal market shares.

A. demand for the product is growing slowly, one or maybe several industry members become dissatisfied with their market position, buyers have low switching costs, and when strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to build market share.

When evaluating whether an industry's environment presents a company with an above-average profitability and an attractive business opportunity, it primarily involves: A. determining the industry outlook for future profitability. B. determining which firms in the industry have a competitive advantage and how they got their advantage. C. determining the overall strength of the five competitive forces. D. constructing a strategic group map and assessing the attractiveness of the competitive position of each strategic group to determine the overall attractiveness of all the strategic groups. E. using value chain analysis to determine the relative cost positions of rival firms and to learn who the industry's low-cost producer is.

A. determining the industry outlook for future profitability.

For a company to translate its performance of value chain activities into competitive advantage, it must A. develop core competencies and maybe a distinctive competence over rivals and that are instrumental in helping it deliver attractive value to customers or else be more cost efficient in how it performs value chain activities. B. have more core competencies than rivals. C. have at least three distinctive competencies. D. have competencies that allow it to produce the highest quality product in the industry. E. have more competitive assets than competitive liabilities.

A. develop core competencies and maybe a distinctive competence over rivals and that are instrumental in helping it deliver attractive value to customers or else be more cost efficient in how it performs value chain activities.

Alliance management is considered an organizational capability and: A. develops over time, out of effort and learning. B. decreases a company's knowledge assets. C. creates successful strategic alliances. D. decreases a company's knowledge capabilities. E. rapidly transfers assets into the strategic alliance.

A. develops over time, out of effort and learning.

Best-cost provider strategies are appealing in those market situations where: A. diverse buyer preferences make product differentiation the norm and where a large number of value-conscious buyers can be induced to purchase mid-range products. B. a company is positioned between competitors who have ultra-low prices and competitors who have top-notch products in terms of both quality and performance. C. buyers are more quality-conscious than price-conscious. D. there are numerous buyer segments, buyer needs are diverse across these segments, only a few of the segments are growing rapidly, and sellers' products are strongly differentiated. E. buyers are more performance-conscious than value-conscious.

A. diverse buyer preferences make product differentiation the norm and where a large number of value-conscious buyers can be induced to purchase mid-range products.

28. A useful way to identify a company's resources is to view them as: A. divided into two main categories, tangible and intangible. B. every productive input or competitive asset except human assets and intellectual capital, which are considered capabilities or competencies. C. physical resources, such as the company's brand, image, and reputation assets. D. an inventory or a collection of the firm's strengths, weaknesses, opportunities, and threats. E. All of these.

A. divided into two main categories, tangible and intangible.

A useful way to identify a company's resources is to view them as: A. divided into two main categories, tangible and intangible. B. productive inputs or competitive assets, except human assets and intellectual capital, which are considered capabilities or competencies. C. physical resources, such as the company's brand, image, and reputation assets. D. an inventory or a collection of the firm's strengths, weaknesses, opportunities, and threats. E. intangible resources such as patents, copyrights, and technological processes.

A. divided into two main categories, tangible and intangible.

A competitively valuable resource or capability is a company's: A. enabling foundation of its business model. B. equally valuable substitute resource providing a competitive advantage. C. assessment of the availability of superior substitutes. D. unsurpassed worker productivity and product quality. E. unique piecework incentive system, providing a competitive advantage.

A. enabling foundation of its business model.

The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to: A. offer better goods at attractive prices. B. create attributes that appeal specifically to niche members. C. lower overall costs more than rivals in serving niche members. D. offer buyers something attractively different from competitors' offerings. E. offer the best product at the industry's lowest possible price.

A. offer better goods at attractive prices.

Sizing up a company's overall resource strengths and weaknesses A. essentially involves constructing a "strategic balance sheet" where the company's resource strengths represent competitive assets and its resource weaknesses represent competitive liabilities. B. is called benchmarking. C. is called competitive strength assessment. D. is focused squarely on ascertaining whether the company has more/less resource strengths than weaknesses. E. is called company resource mapping.

A. essentially involves constructing a "strategic balance sheet" where the company's resource strengths represent competitive assets and its resource weaknesses represent competitive liabilities.

Mergers and acquisitions are often driven by such strategic objectives as: A. expanding a company's geographic coverage or extending its business into new product categories. B. reducing the number of industry key success factors. C. reducing the number of strategic groups in the industry. D. facilitating a company's shift from a low-cost leadership strategy to a focused low-cost strategy. E. lengthening a company's value chain and thereby putting it in a better position to deliver superior value to buyers.

A. expanding a company's geographic coverage or extending its business into new product categories.

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

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

Vertical integration strategies: A. extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain. B. are one of the best strategic options for helping companies win the race for global market leadership. C. offer good potential to expand 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. area good strategy option for helping a company revamp its value chain and bypass low value-added activities.

A. extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain.

Cost-efficient management of a company's overall value chain activities requires that management: A. ferret out cost-saving opportunities in every part of the value chain. B. undertake an operations functionality redesign. C. establish sales productivity and operating practices guidelines. D. re-create rivals' assembly plant structuration savings. E. pursue a differentiation strategy that can be easily copied.

A. ferret out cost-saving opportunities in every part of the value chain.

The competitive threat that outsiders will enter a market is weaker when: A. financially strong incumbents send strong signals that they will launch strategic initiatives to combat the entry of newcomers. B. the industry is characterized by the lack of sizable scale economies and learning/experience curve effects. C. the industry's market growth is rapid. D. the capital requirements for entering the market are within acceptable levels to provide acceptable returns on investment. E. buyers have little loyalty to the brands and product offerings of existing industry members.

A. financially strong incumbents send strong signals that they will launch strategic initiatives to combat the entry of newcomers.

The competitive threat that outsiders will enter a market is weaker when A. financially strong industry members send strong signals that they will launch strategic initiatives to combat the entry of newcomers. B. the pool of entry candidates is large and some have resources that would make them formidable market contenders. C. the industry's market growth is rapid. D. newcomers can be expected to earn attractive profits. E. buyers have little loyalty to the brands and product offerings of existing industry members.

A. financially strong industry members send strong signals that they will launch strategic initiatives to combat the entry of newcomers.

The strategic impetus for forward vertical integration is to: A. gain better access to end users and better market visibility. B. achieve the same scale economies as wholesale distributors and/or retail dealers. C. control price at the retail level. D. bypass distributors and dealers and sell direct to consumers at the company's website. E. build a core competence in mass merchandising.

A. gain better access to end users and better market visibility.

112.Companies racing for global market leadership: ␣ ␣

A. generally have to consider establishing competitive positions in the markets of emerging countries.

Companies racing for global market leadership: A. generally have to consider establishing competitive positions in the markets of emerging countries. B. are well-advised to avoid all the risks and problems of competing in emerging country markets. C. seldom have the resource capabilities it takes to be effective in competing in emerging country markets and usually are at a strong competitive disadvantage to the domestic market leaders. D. can usually be expected to earn sizable profits quickly in emerging country markets. E. usually encounter very low barriers in entering the markets of emerging countries.

A. generally have to consider establishing competitive positions in the markets of emerging countries.

A core competence A. gives a company competitive capability and is a genuine company strength and resource. B. typically has competitive value, the amount of which is reflected in the physical and tangible assets on a company's balance sheet. C. usually is grounded in the technological expertise of a particular department or work group. D. is more difficult for rivals to copy than a distinctive competence. E. refers to a company's lowest-cost and most efficiently executed value-chain activity.

A. gives a company competitive capability and is a genuine company strength and resource.

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

A. glocalization strategy.

Which of the following is the result of a well-conceived and communicated strategic vision?

All of these

The competitive pressures from substitute products tend to be stronger when: A. good substitutes are readily available and priced above the market. B. there are more than 10 sellers of substitute products. C. the quality and performance and other attributes of the substitutes is viewed as being comparable or better in meeting buyer's requirements. D. buyers have high psychic costs in severing existing brand relationships and establishing new ones. E. Switching costs are high, thereby making it easier for the sellers of attractive substitutes to lure buyers to the offering.

A. good substitutes are readily available and priced above the market.

13. Supplier bargaining power is weaker when: A. good substitutes for supplier products/services exists. B. the cost of switching from one supplier to another is high. C. suppliers furnish a critical part or component. D. buying firms are looking for suppliers with good just-in-time supply capabilities. E. a few large suppliers are the primary sources of a particular item.

A. good substitutes for supplier products/services exists.

Supplier bargaining power is weaker when: A. good substitutes for supplier products/services exists. B. the cost of switching from one supplier to another is high. C. suppliers furnish a critical part or component. D. buying firms are looking for suppliers with good just-in-time supply capabilities. E. a few large suppliers are the primary sources of a particular item.

A. good substitutes for supplier products/services exists.

Low-cost leaders who have the lowest industry costs are likely to: A. have out managed rivals in finding ways to perform value chain activities more cost-effectively. B. be considering exiting the current product market and use their competitive low-cost strength to gain a competitive advantage in other product arenas. C. be favorites to win the game of strategy in the long run. D. understand that driving costs to the lowest possible level is the only way to sell cheap products to consumers. E. understand that they have lower bargaining power with suppliers than rivals who employ a different strategy.

A. have out managed rivals in finding ways to perform value chain activities more cost-effectively.

An example of how companies can revamp their value chain to reduce costs is to: A. have suppliers locate their plants close to companies' own facilities. B. continue to utilize traditional methods of distribution and sales. C. not make any changes in product manufacturing but change end distribution methods. D. increase extra services to increase staffing requirements. E. facilitate the learning curve by providing superior training to new employees.

A. have suppliers locate their plants close to companies' own facilities.

44. The advantages of using an acquisition strategy to pursue opportunities in foreign markets include: ␣ ␣

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

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

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

The advantages of using a franchising strategy to pursue opportunities in foreign markets include: A. having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees. B. being particularly well-suited to the global expansion efforts of companies with multidomestic strategies. C. allowing a company to achieve scale economies. D. being well suited to companies who employ cross-border transfer strategies. E. being well suited to the global expansion efforts of manufacturers.

A. having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees.

The range of product and service segments that the firm serves within its market is known as the firm's: A. horizontal scope. B. vertical integration. C. vertical scope. D. product outsourcing. E. joint venture partnership.

A. horizontal scope.

The competitive power of a company resource strength or competitive capability hinges on:

A. how hard it is for competitors to copy. B. whether it is rare and something rivals lack. C. whether it is really competitively valuable and has the potential to contribute to a competitive advantage. D. how easily it can be trumped by the substitute resources/capabilities of rivals. E. All of these. (CORRECT)

19. In analyzing driving forces, the strategist's role is to A. identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition, and (3) industry profitability. B. predict future marketing innovations and how fast the industry is likely to globalize. C. evaluate what stage of the life cycle the industry is in and when it is likely to move to the next stage. D. determine who is likely to exit the industry and what changes can be expected in the industry's strategic group map. E. forecast fluctuations in product demand and how buyer needs will most likely change.

A. identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition, and (3) industry profitability.

In analyzing driving forces, the strategist's role is to A. identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition, and (3) industry profitability. B. predict future marketing innovations and how fast the industry is likely to globalize. C. evaluate what stage of the life cycle the industry is in and when it is likely to move to the next stage. D. determine who is likely to exit the industry and what changes can be expected in the industry's strategic group map. E. forecast fluctuations in product demand and how buyer needs will most likely change.

A. identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition, and (3) industry profitability.

Which of the following signals would NOT warn challengers that strong retaliation is likely?

Announcing strong quarterly earnings potential to financial analysts.

A Strategic Alliance

is a formal agreement between two or more separate companies in which they agree to work cooperatively toward some common objective.

43. The steps of SWOT analysis are: A. identifying the company's resource strengths and weaknesses and its opportunities and threats, drawing conclusions about the company's overall situation, and translating the conclusions into strategic actions to improve the company's strategy. B. pinpointing the company's competitive assets, pinpointing its competitive deficiencies, and determining whether it enjoys a competitive advantage. C. determining whether the company has more competitive assets than competitive liabilities, determining whether the company has good market opportunities, and evaluating the seriousness of the threats to the company's future profitability. D. matching the company's strategy to its resource strengths, correcting the company's important resource weaknesses, and identifying the company's best market opportunities. E. benchmarking the company's strengths and weaknesses against those of key rivals, identifying its market opportunities and the external threats it faces, and determining the company's potential for establishing a competitive advantage over rivals.

A. identifying the company's resource strengths and weaknesses and its opportunities and threats, drawing conclusions about the company's overall situation, and translating the conclusions into strategic actions to improve the company's strategy.

The three steps of SWOT analysis are A. identifying the company's resource strengths and weaknesses and its opportunities and threats, drawing conclusions about the company's overall situation, and translating the conclusions into strategic actions to improve the company's strategy. B. pinpointing the company's competitive assets, pinpointing its competitive deficiencies, and determining whether it enjoys a competitive advantage. C. determining whether the company has more competitive assets than competitive liabilities, determining whether the company has good market opportunities, and evaluating the seriousness of the threats to the company's future profitability. D. matching the company's strategy to its resource strengths, correcting the company's important resource weaknesses, and identifying the company's best market opportunities. E. benchmarking the company's strengths and weaknesses against those of key rivals, identifying its market opportunities and the external threats it faces, and determining the company's potential for establishing a competitive advantage over rivals.

A. identifying the company's resource strengths and weaknesses and its opportunities and threats, drawing conclusions about the company's overall situation, and translating the conclusions into strategic actions to improve the company's strategy.

To determine how strong the threat of substitutes will be entails: A. identifying the relative price/performance relationship of the substitutes, the switching costs and the overall buyer demand for the substitute. B. identifying the attractiveness of other industries. C. measuring Coke as a substitute for Pepsi and applying dynamic simulation modeling techniques. D. adopting a substitute product concentration factor to the buyer volume. E. All of these.

A. identifying the relative price/performance relationship of the substitutes, the switching costs and the overall buyer demand for the substitute.

A well-conceived strategy is value creating producing excellence in company performance and is best when the gains are achieved.

A. in profitability and financial strength. B. in competitive strength and market standing. C. in developing distinctive competencies and sustainability. D. in developing a desirable competitive edge. E. All of these

Brands create customer loyalty, which in turn: A. increases the perceived cost of switching to another product. B. strengthens the product's quality. C. validates the motivation for alternate products. D. provides monetary incentive for using the product. E. allows a company to operate facilities at full capacity.

A. increases the perceived cost of switching to another product.

Potential entrants are more likely to be deterred from actually entering an industry when: A. incumbent firms are willing and able to be aggressive in defending their market positions against entry. B. incumbent firms are complacent. C. buyers are not particularly price sensitive and the industry already contains a dozen or more rivals. D. the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage. E. buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

A. incumbent firms are willing and able to be aggressive in defending their market positions against entry.

A company's resource weaknesses can relate to:

A. inferior or unproven skills, expertise, or intellectual capital in competitively important parts of the business. B. something that it lacks or does poorly in comparison to rivals. C. deficiencies in competitively important physical, organizational, or intangible assets. D. missing or competitively inferior capabilities in key areas. E. All of these. (CORRECT)

Driving forces analysis A. involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impact of the driving forces. B. identifies which strategic group is the most powerful. C. helps managers identify which industry member is likely to become (or remain) the industry leader and why. D. helps managers identify which key success factors are most likely to help their company gain a competitive advantage. E. helps managers identify which of the five competitive forces will be the strongest driver of industry change.

A. involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impact of the driving forces.

Driving forces analysis A. involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces. B. identifies which strategic group is the most powerful. C. helps managers identify which industry member is likely to become (or remain) the industry leader and why. D. helps managers identify which key success factors are most likely to help their company gain a competitive advantage. E. helps managers identify which of the five competitive forces will be the strongest driver of industry change.

A. involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces.

Driving forces analysis: A. involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces. B. identifies which strategic group is the most powerful. C. helps managers identify which industry member is likely to become (or remain) the industry leader and why. D. helps managers identify which key success factors are most likely to help their company gain a competitive advantage. E. helps managers identify which of the five competitive forces will be the strongest driver of industry change.

A. involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces.

A distinctive competence:

A. is a competitively important activity that a company performs better than its rivals. B. gives a company a competitively valuable capability that is unmatched by rivals. C. is a basis for sustainable competitive advantage. D. qualifies as a superior internal strength. E. All of these. (CORRECT)

A core competence: A. is a more competitively valuable strength than a competence because of the key role the activities play in the company's strategy. B. typically has competitive value, the amount of which is reflected in the physical and tangible assets on a company's balance sheet. C. usually is grounded in the technological expertise of a particular department or work group. D. is more difficult for rivals to copy than a distinctive competence. E. refers to a company's lowest-cost and most efficiently executed value-chain activity.

A. is a more competitively valuable strength than a competence because of the key role the activities play in the company's strategy.

Calculating competitive strength ratings for a company and its rivals using the industry's most telling measures of competitive strength or weakness A. is a way of determining which competitor has the biggest overall competitive advantage in the marketplace and which competitor is faced with the biggest overall competitive disadvantage. B. is the most reliable indicator of which industry member has the highest overall product quality. C. is a powerful way of revealing which competitors are in the best and worst strategic groups. D. is the most reliable indicator of which industry member has the lowest overall costs and is the low-cost leader. E. pinpoints which industry rivals are most insulated from the industry's driving forces.

A. is a way of determining which competitor has the biggest overall competitive advantage in the marketplace and which competitor is faced with the biggest overall competitive disadvantage.

Calculating competitive strength ratings for a company and its rivals using the industry's most telling measures of competitive strength or weakness: A. is a way of determining which competitor has the highest overall competitive advantage in the marketplace and which competitor is faced with the lowest overall competitive disadvantage. B. is the most reliable indicator of which industry member has the highest overall product quality. C. is a powerful way of revealing which competitors are in the best and worst strategic groups. D. is the most reliable indicator of which industry member has the lowest overall costs and is the low-cost leader. E. pinpoints which industry rivals are most insulated from the industry's driving forces.

A. is a way of determining which competitor has the highest overall competitive advantage in the marketplace and which competitor is faced with the lowest overall competitive disadvantage.

Activity-based costing A. is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost. B. involves using benchmarking techniques to develop cost estimates for the value chain activities of each major rival. C. is a powerful tool for identifying the different pieces of a company's value chain and classifying them as primary activities and support activities. D. involves determining which value chain activities represent variable costs and which represent fixed costs. E. is a tool for identifying the activities that cause a company's product to be strongly differentiated from the products of rivals.

A. is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost.

Activity-based costing: A. is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost. B. involves using benchmarking techniques to develop cost estimates for the value chain activities of each major rival. C. is a powerful tool for identifying the different pieces of a company's value chain and classifying them as primary activities and support activities. D. involves determining which value chain activities represent variable costs and which represent fixed costs. E. is a tool for identifying the activities that cause a company's product to be strongly differentiated from the products of rivals.

A. is an accounting system that assigns a company's expenses to whichever activity in a company's value chain is responsible for creating the cost.

46. With its focus on value-creating activities, the value chain: A. is an ideal tool for examining how a company delivers on its customer value proposition. B. preserves cost structure advantages. C. provides identification of customer differentiation shortfalls. D. is a recognized method for classifying the relevant support activities that are relevant to operations tasks. E. is crucial in understanding cost disadvantages and economies of scale and scope shortfalls.

A. is an ideal tool for examining how a company delivers on its customer value proposition.

15. A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers: A. is competitively unattractive from the standpoint of earning good profits. B. offers little ability to build a sustainable competitive advantage. C. is highly conducive to achieving strong product differentiation and high customer loyalty to the company's brand. D. offers moderate to good prospects for making a reasonable profit and building a sustainable competitive advantage. E. requires that industry members have a strongly differentiated product offering in order to be profitable.

A. is competitively unattractive from the standpoint of earning good profits.

A low-cost provider's product does NOT have to always: A. contain enough attributes to be attractive to prospective buyers. B. suggest strong rather than weak product differentiation. C. signal value to buyers. D. provide high margins per unit sold to bring in enough unit sales. E. be valuable and appealing to a wide range of buyers.

B. suggest strong rather than weak product differentiation.

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers: A. is competitively unattractive from the standpoint of earning good profits. B. offers little ability to build a sustainable competitive advantage. C. is highly conducive to achieving strong product differentiation and high customer loyalty to the company's brand. D. offers moderate to good prospects for making a reasonable profit and building a sustainable competitive advantage. E. requires that industry members have a strongly differentiated product offering in order to be profitable.

A. is competitively unattractive from the standpoint of earning good profits.

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers A. is competitively unattractive from the standpoint of earning good profits. B. offers little ability to build a sustainable competitive advantage. C. is highly conducive to achieving strong product differentiation and high brand loyalty. D. offers moderate to good prospects for achieving low costs and building a sustainable competitive advantage. E. requires that industry members have a strongly differentiated product offering in order to be profitable.

A. is competitively unattractive from the standpoint of earning good profits.

Properly managing the value chain activities in comparison to the rivals A. is one of the most dependable ways a company can build a competitive advantage over rivals. B. allows a company to avoid the impact of the five competitive forces. C. is one of the best ways for a company to avoid being impacted by the industry's driving forces. D. allows a company to move into a higher strategic group. E. helps neutralize external threats to a company's future business prospects.

A. is one of the most dependable ways a company can build a competitive advantage over rivals.

33. A dynamic capability: A. is the ongoing capacity to modify existing resources and capabilities to create new ones. B. is the improvement evaluation process for eliminating waste in the firm. C. is the functional and operating resources management process. D. is the ongoing capability to understand and establish rival commitment to resource alignment. E. All of these.

A. is the ongoing capacity to modify existing resources and capabilities to create new ones.

Every corporation should have a strong independent board of directors that:

A. is well informed about the company's performance and exercises their fiduciary duty to protect shareholders responsibly. B. guides management in choosing a strategic direction and to make independent judgments about the validity and wisdom of managements proposed strategic actions. C. evaluates the leadership skills of the CEO and other senior executives promote management actions the board believes are inappropriate or unduly risky. D. has the courage to curb management actions deemed inappropriate or unduly risky, curtails insight and advice to management. E. All of these.

70. The strength of a "think local, act local" multidomestic strategy is that: ␣ ␣

A. it matches a company's competitive approach to prevailing market and competitive conditions in each . country market, country by country.

The strength of a "think local, act local" multidomestic strategy is that: A. it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country. B. it employs strategies that are almost totally different from and also unrelated to its strategies in other countries. C. it operates independent plants, located in different countries, thus promoting greater achievement of scale economies. D. it avoids host country ownership requirements and import quotas. E. it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

A. it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country.

Organizational capabilities are virtually always: A. knowledge-based, residing in people and in the company's intellectual capital, or in organizational processes and systems, which embody tacit knowledge. B. more complex than resources and are exercised only through key personnel. C. require constant evaluation to ensure cooperative support from management. D. are easier and less challenging to categorize than resources because there are fewer to be concerned about. E. reflective of the industry's driving forces.

A. knowledge-based, residing in people and in the company's intellectual capital, or in organizational processes and systems, which embody tacit knowledge.

42. The primary lesson stemming from a SWOT analysis is that a company's strategy should: A. leverage resource strengths, capitalize on market opportunities, overcome important weaknesses, and defend against external threats. B. be aimed at opportunities that offer the best potential for improved profitability. C. seek aggressively to defend against those threats to the company's immediate profitability. D. be designed to place heavy demands on areas where the company has proven competencies to meet the threats head-on. E. concentrate on making the SWOT's four lists relevant for strategic discussion and planning.

A. leverage resource strengths, capitalize on market opportunities, overcome important weaknesses, and defend against external threats.

The higher the switching costs for industry members, the more it can: A. limit supplier bargaining power. B. provide a stronger bargaining power for suppliers. C. enhance the quality of parts and components being supplied, and in effect reduce defect rates. D. provide important cost savings for the collaborative supplier-seller relationship. E. All of these.

A. limit supplier bargaining power.

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

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

How much attention a company should devote to defending against external threats hinges on primarily on:

the compatibility of the pending threats to the company's competitive assets.

The objective of differentiation is to: A. offer customers something rivals can't, at least in terms of the level of satisfaction. B. develop strategies that are different from those of rivals. C. establish objectives that are measurable and meaningful when it comes to sales growth. D. offer customers a sustainable competitive advantage. E. offer a diverse range of comparable products with low switching costs.

A. offer customers something rivals can't, at least in terms of the level of satisfaction.

The market opportunities most relevant to a particular company are those that A. offer the best growth and profitability. B. provide a strong defense against threats to the company's profitability. C. hold the most potential for product innovation. D. provide avenues for taking market share away from close rivals. E. hold the most potential to reduce costs.

A. offer the best growth and profitability.

The market opportunities most relevant to a particular company are those that: A. offer the best prospects for growth and profitability. B. provide a strong defense against threats to the company's profitability. C. embrace the most potential for product innovation. D. provide avenues for taking market share away from close rivals. E. hold the most potential to reduce costs.

A. offer the best prospects for growth and profitability.

A dynamic capability is the: A. ongoing capacity to modify existing resources and capabilities to create new ones. B. improvement evaluation process for eliminating waste in the firm. C. functional and operating resources management process. D. ongoing capability to understand and establish a commitment to resource alignment. E. improvement evaluation process for repurposing waste in the firm.

A. ongoing capacity to modify existing resources and capabilities to create new ones.

The bargaining leverage of suppliers is greater when A. only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes. B. industry members incur low costs in switching their purchases from one supplier to another. C. industry members purchase in large quantities and thus are important customers of the suppliers. D. it makes good economic sense for industry members to vertically integrate backward. E. the supplier industry is composed of a large number of relatively small suppliers.

A. only a small number of suppliers exist and when it is difficult for industry members to switch to attractive substitutes.

The major avenues for achieving a cost advantage over rivals include: A. performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities. B. having a management team that is highly skilled in cutting costs. C. being a first-mover in adopting the latest state-of-the-art technologies, especially those relating to low-cost manufacture. D. outsourcing high-cost activities to cost-efficient vendors. E. paying lower wages and salaries than rivals

A. performing value chain activities more cost-effectively than rivals or revamping the firm's overall value chain to eliminate or bypass some cost-producing activities.

20. The difference between political risks and economic risks is that: ␣ ␣

A. political risks stem from instability or weakness in national governments, while economic risks stem . from the stability of a country's monetary system, and its economic and regulatory policies.

The difference between political risks and economic risks is that: A. political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies. B. political risks stem from stability in foreign business, while economic risks stem from an excess of property right protections. C. political risks stem from hostility to foreign currencies, while economic risks stem from the instability of the monetary system. D. political risks stem from exchange rate fluctuations, while economic risks stem from hostility to foreign business. E. political risks stem from the stability of a country's monetary system, while economic risks stem from instability in national business.

A. political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies.

The payoff of good scouting reports on rivals is improved ability to A. predict what strategic moves rivals are likely to make next, thereby allowing a company to prepare defensive countermoves and develop strategies to exploit rivals' missteps. B. determine which rivals are in the best strategic group. C. figure out how many key success factors a rival has. D. determine whether a rival is gaining or losing market share, whether rivals are increasing or decreasing R&D spending, and what new marketing promotions are in the works. E. determine whether a rival has the best strategy and is the industry leader.

A. predict what strategic moves rivals are likely to make next, thereby allowing a company to prepare defensive countermoves and develop strategies to exploit rivals' missteps.

The options for remedying a supplier-related cost disadvantage include: A. pressuring suppliers for more favorable prices, switching to lower-priced substitute inputs, and collaborating closely to identify mutual cost-saving opportunities. B. instituting forward vertical integration. C. shifting into the production of substitute products. D. shifting from a low-cost leadership strategy to a differentiation or focus strategy. E. cutting selling prices and trying to win a bigger market share.

A. pressuring suppliers for more favorable prices, switching to lower-priced substitute inputs, and collaborating closely to identify mutual cost-saving opportunities.

Resource and capability analysis is achieved by A. probing the caliber of a firm's competitive assets relative to those of rival firms. B. achieving price stability. C. analyzing only internal strengths and weaknesses through a matrix comparison model. D. cost-benefit analysis of the company's core product sales. E. Performing resource specific activities within the organization to allocate available capital.

A. probing the caliber of a firm's competitive assets relative to those of rival firms.

Resource and capability analysis is achieved by: A. probing the caliber of a firm's competitive assets relative to those of rival firms. B. attaining price stability. C. analyzing only internal strengths and weaknesses through a matrix comparison model. D. cost-benefit analysis of the company's core product sales. E. performing resource-specific activities within the organization to allocate available capital.

A. probing the caliber of a firm's competitive assets relative to those of rival firms.

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

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

A powerful tool for sizing up the company's competitive assets and determining whether they can provide the foundation necessary for competitive success in the marketplace is termed: A. resource and capability analysis. B. SWOT. C. competitive analysis. D. financial and asset management analysis. E. value chain analysis.

A. resource and capability analysis.

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

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

The two approaches that can make the process of uncovering and identifying a firm's capabilities more systematic are: A. resources assessment and the functional approach. B. strengths valuations and weaknesses estimations. C. sustainability resource allocation and resource bundling. D. cross-functional analysis and collaborative resource methodology. E. financial statement analysis and management support analysis.

A. resources assessment and the functional approach.

A company may develop an emergent strategy due to

A. strategic moves by rival firms. B. unexpected shifts in customer preferences. C. fast-changing technological developments. D. new market opportunities. E. All of these.

The keys to maintaining a broad differentiation strategy are to: A. stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features. B. charge a premium price that more than covers the extra costs of differentiating features and to convince customers to be brand loyal. C. out-innovate and out-advertise rivals. D. emphasize personalized customer service and to add as many differentiating features as possible. E. keep prices close to the average of all rivals and to spend heavily on new product R&D.

A. stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features.

A company attempting to be successful with a broad differentiation strategy has to: A. study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for. B. incorporate more differentiating features into its product/service than rivals. C. concentrate its differentiating efforts on marketing and advertising (where almost all differentiating features are created). D. over-differentiate so that product quality, features, or service levels exceed the needs of most buyers E. concentrate on offering advanced features, whether or not they have value to the customers, to create unique products

A. study buyer needs and behavior carefully to learn what buyers consider important, what they think has value, and what they are willing to pay for.

When firms are involved in a mix of in-house and outsourced activity in any given stage of the vertical chain, it is called: A. tapered integration. B. partial integration. C. full integration. D. forward integration. E. backward integration.

A. tapered integration.

Driving forces analysis helps managers identify whether: A. the collective impact of the driving forces will act to increase/decrease market demand, increase/ decrease competition, and raise/lower industry profitability in the years ahead. B. it will become more or less important to aim the company's strategy at being the industry's low-cost producer. C. the driving forces will have a bigger impact on company profitability than competitive forces. D. the industry is likely to become more or less vertically integrated and why. E. competitive advantages are likely to grow or diminish in importance.

A. the collective impact of the driving forces will act to increase/decrease market demand, increase/ decrease competition, and raise/lower industry profitability in the years ahead.

The intensity of rivalry among competing sellers does NOT depend on whether: A. the industry has more than two strong driving forces and whether the industry has more than two diverse and capable strategic groups. B. competitors are diverse in terms of long-term directions, objectives, strategies, and countries of origin. C. strong companies outside the industry have acquired weak firms in the industry and are launching aggressive moves to transform the acquired companies into strong market contenders. D. one or two rivals have particularly powerful and successful strategies to grow the business, attract and retain buyers, and develop a sustained competitive advantage. E. industry conditions attract industry members to use price cuts or other competitive weapons to boost total sales volume and market share.

A. the industry has more than two strong driving forces and whether the industry has more than two diverse and capable strategic groups.

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

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

103.Companies that compete on an international basis have a competitive advantage over their purely domestic rivals

B. to benefit from coordinating activities across different countries' domains.

Broad differentiation strategies are well-suited for market circumstances where: A. there are many ways to differentiate the product or service that have value to buyers. B. most buyers have the same needs and use the product in the same ways. C. technological changes are slow-paced. D. barriers to entry are high and suppliers have a low degree of bargaining power. E. price competition is especially vigorous.

A. there are many ways to differentiate the product or service that have value to buyers.

The bargaining leverage of suppliers is greater when: A. there suppliers products/services account for a small percentage of industry members' costs. B. industry members incur low costs in switching their purchases from one supplier to another. C. industry members account for a big fraction of supplier's sales. D. there is extensive seller-supplier collaboration. E. the supplier industry is composed of a large number of relatively small suppliers.

A. there suppliers products/services account for a small percentage of industry members' costs.

102.A key approach for a company to grow sales and profits in several country markets is to ␣ ␣

A. transfer its valuable competencies and resource strengths among these markets to aid in the . developmentofbroadercompetenciesandcapabilities.

A key approach for a company to grow sales and profits in several country markets is to: A. transfer its valuable competencies and resource strengths among these markets to aid in the development of broader competencies and capabilities. B. employ a multidomestic strategy rather than a global strategy. C. locate technical after-sale services close to buyers. D. minimize transportation costs among these markets. E. take advantage of less restrictive restrictions and requirements of host governments.

A. transfer its valuable competencies and resource strengths among these markets to aid in the development of broader competencies and capabilities.

A pitfall to avoid in pursuing a differentiation strategy is: A. trying to differentiate on the basis of attributes or features that are easily and quickly copied. B. choosing a product offering that supports buyers' indifference to rival brands' offerings. C. charging a premium price for the differentiating features. D. meeting and exceeding the meaningful gaps in quality, performance, service, and other attractive differentiating attributes offered by rivals. E. spending on activities to differentiate the company's product to enhance profitability.

A. trying to differentiate on the basis of attributes or features that are easily and quickly copied.

The options for remedying a supplier-related cost disadvantage include A. trying to negotiate more favorable prices with suppliers and switching to lower priced substitute inputs. B. forward vertical integration. C. shifting into the production of substitute products. D. shifting from a low-cost leadership strategy to a differentiation or focus strategy. E. cutting selling prices and trying to win a bigger market share.

A. trying to negotiate more favorable prices with suppliers and switching to lower priced substitute inputs.

For a company to translate its performance of value chain activities into competitive advantage, it must: A. undertake ongoing and persistent efforts to be cost-efficient and develop differentiation advantages. B. have more core competencies than rivals. C. have at least three distinctive competencies. D. have competencies that allow it to produce the highest-quality product in the industry. E. have more competitive assets than competitive liabilities.

A. undertake ongoing and persistent efforts to be cost-efficient and develop differentiation advantages.

The target market of a best-cost provider is: A. value-conscious buyers. B. brand-conscious buyers. C. price-sensitive buyers. D. middle-income buyers. E. young adults (in the 18-35 age group).

A. value-conscious buyers.

The real payoff of driving forces is to help managers understand: A. what strategy changes are needed to prepare for the impacts of the driving forces. B. the overall strength of the five competitive forces. C. whether the industry's strategic group map will be static or dynamic. D. what conditions exist in the economy at large. E. the extent to which rivals have more than two competitively valuable competencies or capabilities

A. what strategy changes are needed to prepare for the impacts of the driving forces.

A sustainable competitive advantage is gained: A. when a company has durable competitive assets that are central to its strategy and superior to those of rival firms. B. when a company has sufficient resources to expedite its strategy. C. when a company realizes its inherent weaknesses are transformable to advantages. D. when a company can stand out relative to rivals because of resource utilization. E. when a company has resources in well-populated geographical locations

A. when a company has durable competitive assets that are central to its strategy and superior to those of rival firms.

Rivalry increases: A. when buyer demand is growing fast or increasing. B. as it becomes more costly for buyers to switch brands. C. as the products of rival sellers becomes more strongly differentiated. D. when there is excess supply of unused production capacity, especially if high fixed costs exist. E. All of these.

A. when buyer demand is growing fast or increasing.

The rivalry among competing firms tends to be more intense: A. when demand for the product is growing slowly, buyers have low switching costs, and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals. B. when the products/services of rival sellers are more strongly differentiated and buyer demand is strong and growing rapidly. C. when rivals are relatively content with their market position. D. when there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members. E. the smaller the number of firms in the industry and the more unequal their market shares.

A. when demand for the product is growing slowly, buyers have low switching costs, and the actions of any one company to attract more customers and boost market share have strong direct impact on their rivals.

46. A Greenfield venture in a foreign market is one: ␣ ␣

A. where the company creates a wholly owned subsidiary business by setting up all aspects of the . operationuponenteringthemarketfromthegroundup.

Which one of the following is not among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned?

Directing senior executives as to what the company's long-term direction, objectives, business model, and strategy should be and, further, closely supervising senior executives in their efforts to implement and execute the strategy

A greenfield venture in a foreign market is one: A. where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up. B. where foreign facilities and marketing strategies are shared with local businesses. C. where the company learns through training by the foreign entity on how to compete. D. that supports exports into a foreign market by marketing indirectly thru local rivals. E. that offers lower risk and a faster path to financial returns.

A. where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up.

How valuable a low-cost leader's cost advantage is depends on: A. whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs. B. how easy it is for the low-cost leader to gain the biggest market share. C. the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs. D. the leader's ability to combine the cost advantage with a reputation for good quality. E. the low-cost leader's ability to be the industry leader in manufacturing innovation so as to keep lowering its manufacturing costs.

A. whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs.

12. The strength of competitive pressures that suppliers can exert on industry members is MAINLY a function of: A. whether needed inputs are in short supply and whether suppliers provide differentiated input that enhances performance of the product. B. whether suppliers self-manufacture what they supply or source their items from other manufacturers. C. the industry's position in the growth cycle. D. whether technological change in the businesses of suppliers is rapid or slow. E. whether the needs and expectations of supplier-seller relationships are changing slowly or rapidly.

A. whether needed inputs are in short supply and whether suppliers provide differentiated input that enhances performance of the product.

The strength of competitive pressures that suppliers can exert on industry members is MAINLY a function of: A. whether needed inputs are in short supply and whether suppliers provide differentiated input that enhances performance of the product. B. whether suppliers self-manufacture what they supply or source their items from other manufacturers. C. the industry's position in the growth cycle. D. whether technological change in the businesses of suppliers is rapid or slow. E. whether the needs and expectations of supplier-seller relationships are changing slowly or rapidly.

A. whether needed inputs are in short supply and whether suppliers provide differentiated input that enhances performance of the product.

Good competitive intelligence about the strategic direction and likely moves of key competitors allows a company to determine:

A. which competitor has the best strategy and which competitors have flawed or weak strategies. B. which rivals are poised to gain market share and which seem destined to lose market share. C. which rivals are likely to rank among the industry leaders on the road ahead. D. which rivals are likely to initiate fresh strategic moves and why. E. ALL OF THESE (CORRECT)

Calculating competitive strength ratings for a company and comparing them against strength ratings for its key competitors helps indicate A. which weaknesses and vulnerabilities of competitors the company might be able to attack successfully. B. which competitors are in profitable strategic groups and which competitors are in unprofitable strategic groups. C. which competitors are employing offensive strategies and which competitors are employing defensive strategies. D. which competitors are likely to make money and which are likely to lose money in the years ahead. E. what the industry's key success factors are.

A. which weaknesses and vulnerabilities of competitors the company might be able to attack successfully.

Calculating competitive strength ratings for a company and comparing them against strength ratings for its key competitors helps indicate: A. which weaknesses and vulnerabilities of competitors the company might be able to attack successfully. B. which competitors are in profitable strategic groups and which competitors are in unprofitable strategic groups. C. which competitors are employing offensive strategies and which competitors are employing defensive strategies. D. which competitors are likely to make money and which are likely to lose money in the years ahead. E. what the industry's key success factors are.

A. which weaknesses and vulnerabilities of competitors the company might be able to attack successfully.

53. What makes cross-border alliances an attractive strategic means of gaining a foothold in foreign markets?

A..Alliances provide the flexibility to readily disengage when the purpose has been served or the benefits . prove elusive and also provide the firm with some degree of autonomy and operating control, as well as independence.

56. What is the foremost strategic issue that must be addressed by firms when operating in two or more foreign markets? ␣

A..Deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country.

73. In which of the following situations is employing a "think local, act local" multidomestic strategy highly questionable? ␣

A..When a company desires to transfer competencies and resources across country boundaries and is . striving to build a single, uniform competitive advantage worldwide.

42. The advantages of using a franchising strategy to pursue opportunities in foreign markets include: ␣ ␣

A..having franchisees bear most of the costs and risks of establishing foreign locations and requiring the . franchisor to expend only the resources to recruit, train, and support and monitor franchisees.

118.Which of the following is NOT a viable strategy option for a local company in competing against global challengers? ␣

A.Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments.

36. Using domestic plants as a production base for exporting goods to selected foreign country markets: ␣ ␣

A.can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets.

Which of the following is NOT a typical reason that many alliances prove unstable or break apart?

Disagreement over how to divide the profits gained from joint collaboration.

49. Strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms are a potentially fruitful means for the partners to:

ANSWER IS E ALL OF THESE.. A. enter additional country markets and compete on a more global scale while still preserving their independence. B. gain better access to scale economies in production and/or marketing. C. fill competitively important gaps in their technical expertise and/or knowledge of local markets. D. share distribution facilities and dealer networks, thus mutually strengthening their access to buyers. E. All of these.

115.Which of the following is an option for tailoring a company's strategy to fit unusual circumstances presented in developing-country markets? ␣

ANSWER IS E ALL OF THESE: A. Prepare to compete on the basis of low price. B. Modify aspects of a company's business model and/or strategy to accommodate local customs. C. Attempt to modify the local market to do business in the manner that the company uses elsewhere. D.Avoid markets where it is impractical or uneconomic to do business in such a way as to accommodate local circumstances. E. All of these.

109.What does the World trade Organization (WTO) do primarily?

ANSWER IS E ALL OF THESE: A. Promotes fair trade practices. B. Actively polices dumping. C. Deals with the rules of trade between nations. D. Helps producers, exporters, and importers conduct business. E. All of these.

114.One of the most viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets includes: ␣

ANSWER IS E ALL OF THESE: A. Trying to change the local market to better match the way the company does business elsewhere. B. Being prepared to modify aspects of the company's business model to accommodate local circumstances. C. Preparing to compete on the basis of low price. D Staying away from those emerging markets where it is impractical to modify the company's business . modeltoaccommodatelocalcircumstances. E. All of these.

54. The risks of strategic alliances often include partners discovering they have: ␣ ␣

ANSWER IS E ALL OF THESE: A. conflicting objectives and strategies. B. deep differences of opinion about how to proceed operationally and strategically. C. important differences in corporate values. D. misunderstandings about appropriate ethical standards. E. All of these.

71. A "think local, act local" multidomestic strategy works particularly well when: ␣ ␣

ANSWER IS E ALL OF THESE: A. host governments enact regulations requiring that products sold locally meet strictly defined . manufacturingspecificationsorperformancestandards. B. there are significant country-to-country differences in customer preferences and buying habits. C.diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country to country. D. there are significant country to country differences in distribution channels and marketing methods. E. All of these.

82. A "think global, act global" approach to crafting a global strategy involves: ␣ ␣

ANSWER IS E ALL OF THESE: A. pursuing the same basic competitive strategic theme (low cost, differentiation, best cost, and focused) . inallcountrieswherethefirmdoesbusiness. B selling much the same products under the same brand names everywhere and expanding into most, if . not all, nations where there is significant buyer demand. C. integrating and coordinating the company's strategic moves worldwide. D. utilizing the same competitive capabilities, distribution channels, and marketing approaches worldwide. E. All of these.

33. The primary strategic options for entering foreign markets, depends on the firm's wherewithal to: ␣ ␣

ANSWER IS E ALL OF THESE: A. rely on strategic alliances or joint ventures with foreign companies. B. maintain a national (one-country) production base and exporting goods to foreign markets. C.adopt a licensing approach with foreign firms to produce and distribute one's products or to use the company's technology. D. employ a franchising strategy. E. All of these.

96. In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations when:

ANSWER IS E ALL OF THESE: A. there are significant scale economies in performing an activity. B. the costs of manufacturing or other activities are significantly lower in some geographic locations than in others. Cwhen there is a steep learning or experience curve associated with performing an activity in a single . location (thus making it economical to serve the whole world market from just one or maybe a few locations). D.certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. E. All of these.

52. Which of the following is the role played by local managers within experienced multinational companies?

ANSWER IS E ALL OF THESE: A.To contribute needed understanding of local market conditions, local buying habits, and local ways of doing business. B. To run the local operations for the company. C. To understand how "the system" works to detour the hazards of collaborative alliances with local companies. D. To serve as conduits for the flow of information between the corporate office and local operations. E. All of these.

98. Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous ␣

ANSWER IS E ALL OF THESE: A. when high transportation costs make it expensive to operate from central locations. B. whenever buyer-related activities are best performed in locations close to buyers. C if diseconomies of large size exist, thereby making it more economical to perform an activity on a . smallerscaleinseveraldifferentlocations. D when it is desirable to hedge against (1) the risks of fluctuating exchange rates, (2) supply interruptions . or (3) adverse political developments. E. All of these.

77. A global strategy is one in which a company: ␣ ␣

ANSWER IS E, ALL OF THESE: A. employs the same basic competitive approach in all countries where it operates. B. sells much of the same products everywhere. C. strives to build global brands. D. coordinates its actions worldwide with strong headquarters control represents a think-global, act-global approach. E. All of these.

What does the scope of the firm refer to?

The range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses

C) performing value chain activities more cost-effectively than rivals and finding ways to eliminate or

Achieving a cost advantage over rivals entails A) concentrating on the primary activities portion of the value chain and outsourcing all support activities. B) being a first-mover in pursuing backward and forward integration and controlling as much of the industry value chain as possible. C) performing value chain activities more cost-effectively than rivals and finding ways to eliminate or bypass some cost-producing activities altogether. D) minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs. E) producing a standard product, redesigning the product infrequently, and having minimal advertising.

A "think local, act local" multidomestic strategy works particularly well when: A. host governments enact regulations requiring that products sold locally meet strictly defined manufacturing specifications or performance standards. B. there are significant country-to-country differences in customer preferences and buying habits. C. diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country to country. D. there are significant country to country differences in distribution channels and marketing methods. E. All of these.

All of these

A global strategy is one in which a company: A. employs the same basic competitive approach in all countries where it operates. B. sells much of the same products everywhere. C. strives to build global brands. D. coordinates its actions worldwide with strong headquarters control represents a think-global, act-global approach. E. All of these.

All of these

Companies operating in an international marketplace have to respond to: A. whether to customize their offerings in each different country market to match the tastes and preferences of local buyers. B. whether to pursue a strategy of offering a mostly standardized product worldwide. C. how much to customize their offerings in each different country market to match the tastes and preferences of local buyers. D. the tensions between market pressures to localize a company's product offerings country by country and the competitive pressures to lower costs through greater product customization. E. All of these.

All of these

Competing in the markets of foreign countries entails dealing with such factors as: A. fluctuating exchange rates, country-to-country parallels in host government restrictions and requirements, and country-to-country variations in cultural, demographic, and market conditions. B. important country-to-country differences in consumer buying habits and buyer tastes and preferences. C. whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide. D. the fact that product designs suitable for one country are sometimes inappropriate in another. E. All of these.

All of these

In the course of crafting a strategy, it is common for management to

All of these

Strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms are a potentially fruitful means for the partners to: A. enter additional country markets and compete on a more global scale while still preserving their independence. B. gain better access to scale economies in production and/or marketing. C. fill competitively important gaps in their technical expertise and/or knowledge of local markets. D. share distribution facilities and dealer networks, thus mutually strengthening their access to buyers. E. All of these.

All of these

The competitiveness of any company's facilities in any country is partly dependent upon: A. whether exchange rate changes over time have a favorable or unfavorable cost impact. B. exchange rate movements, which are unpredictable, swinging, first one way and then another way. C. the government's currency growing weaker in relation to the currencies of the countries where the lower-cost imports are being made. D. a weak currency. E. All of these

All of these

The primary strategic options for entering foreign markets, depends on the firm's wherewithal to: A. rely on strategic alliances or joint ventures with foreign companies. B. maintain a national (one-country) production base and exporting goods to foreign markets. C. adopt a licensing approach with foreign firms to produce and distribute one's products or to use the company's technology. D. employ a franchising strategy. E. All of these.

All of these

The risks of strategic alliances often include partners discovering they have: A. conflicting objectives and strategies. B. deep differences of opinion about how to proceed operationally and strategically. C. important differences in corporate values. D. misunderstandings about appropriate ethical standards. E. All of these.

All of these

Which of the following is a frequently used strategic approach to setting a company apart form rivals and achieving a sustainable competitive advantage?

All of these

Which of the following is the role played by local managers within experienced multinational companies? A. To contribute needed understanding of local market conditions, local buying habits, and local ways of doing business. B. To run the local operations for the company. C. To understand how "the system" works to detour the hazards of collaborative alliances with local companies. D. To serve as conduits for the flow of information between the corporate office and local operations. E. All of these.

All of these

Winning a competitive edge over competitors generally hinges on which of the following?

All of these

Which of the following is an issue likely to be addressed by a company's business strategy?

All of these are pertinent in identifying a company's strategy.

A company that fails in managing their strategic alliance probably has not:

All of these.

A strategy of vertical integration can have both important strengths and weaknesses and depends on:

All of these.

All firms are subject to offensive challenges from rivals. The intent of the best defensive move is to:

All of these.

An alliance becomes "strategic" as opposed to just a convenient business arrangement when it serves strategic purposes such as when designed to help:

All of these.

Every corporation should have a strong independent board of directors that:

All of these.

In the course of crafting a strategy, it is common for management to:

All of these.

Once a company has decided to employ a particular generic competitive strategy, then it must make such additional strategic choices, such as:

All of these.

The managerial purpose of setting objectives includes:

All of these.

What outcomes do horizontal merger and acquisition strategies intend?

All of these.

When challenging a struggling rival, it can:

All of these.

Winning a sustainable competitive edge over competitors generally hinges on which of the following?

All of these.

Proven approaches to winning a sustainable competitive advantage include which of the following?

All of these. A. Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage. B. Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, or technological superiority. C. Developing competitively valuable resources and capabilities that rivals can't easily match, copy, or trump with capabilities of their own. D. Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche.

The business strategy is made up of key "functional" strategies except:

Alliance and partnerships as well as merger and acquisition growth strategies.

What makes cross-border alliances an attractive strategic means of gaining a foothold in foreign markets? A. Alliances provide the flexibility to readily disengage when the purpose has been served or the benefits prove elusive and also provide the firm with some degree of autonomy and operating control, as well as independence. B. Alliances are permanent arrangements and thus are considered a long-term strategic advantage. C. Alliances bind firms to "local" customary behavior, language, and cultural identities and operating practices. D. Alliances are not relevant compared to acquisition approaches for foreign entry. E. Alliances direct the firm's competitive energies to each other instead of toward mutual rivals, allowing advanced internal strategic responses to differences in operating practices.

Alliances provide the flexibility to readily disengage when the purpose has been served or the benefits prove elusive and also provide the firm with some degree of autonomy and operating control, as well as independence.

Which of the following is NOT an example of a company's dynamic capability?

An ability to keep antiquated resources by disregarding innovative capabilities

Which of the following is not a generic strategy option for entering into foreign markets? A. Maintaining a national (one-country) production base and exporting goods to foreign markets. B. Establishing a subsidiary via acquisition or opt for a de nova approach. C. Franchising and licensing strategies. D. Alliances or joint ventures strategies. E. An enterprise-wide strategy to take over local competition.

An enterprise-wide strategy to take over local competition.

Which of the following is false as concerns use of an export strategy to compete in foreign markets? A. One advantage of an export strategy is the ability to test the international waters before having to commit substantial sums to establishing operations in foreign countries—the amount of capital required to begin exporting is frequently quite minimal. B. Exporting carries the risk of being vulnerable to adverse shifts in currency exchange rates. C. An export strategy is especially well suited to accommodating the different needs and preferences of buyers in different countries. D. An export strategy may allow a company to gain additional scale economies from centralizing production in one or several giant plants. E. An export strategy is disadvantageous when costs in the country where the goods are being manufactured for export are higher than the costs in those locations where rivals have their plants.

An export strategy is especially well suited to accommodating the different needs and preferences of buyers in different countries.

Profit sanctuaries are found to differ by a company's strategy, such that: A. A domestic-only company has access to many profit sanctuary locations worldwide. B. An international competitor usually has a profit sanctuary in its home market and may have other sanctuaries in countries where it has a strong position and market share. C. A globally competitive company generally has a profit sanctuary outside its home market in countries where it is a market leader and enjoys a strong competitive position. D. A transnational company has profit sanctuaries in every country where it operates. E. All of these.

An international competitor usually has a profit sanctuary in its home market and may have other sanctuaries in countries where it has a strong position and market share.

8. Competing in the markets of foreign countries entails dealing with such factors as: ␣

Answer E All of the above: Afluctuating exchange rates, country-to-country parallels in host government restrictions and . requirements, and country-to-country variations in cultural, demographic, and market conditions. B. important country-to-country differences in consumer buying habits and buyer tastes and preferences. C whether to customize the company's offerings in each different country market or whether to offer a . mostlystandardizedproductworldwide. D. the fact that product designs suitable for one country are sometimes inappropriate in another. E. All of these.

15. The diamond framework is an aid in deciding/revealing:

Answer is E all of these A. the appropriate level of competition one can expect. B. the basis of the new rival's strengths. C. the countries where rivals will be weakest. D. the advantages of conducting particular business activities in that country. E. All of these.

The key questions stemming from the SWOT listings that can reveal relevant substance about the company's overall situation are as follows, except for:

Are the company's activities and dynamic capabilities adequate for capitalizing on the opportunities?

Which one of the following groups of characteristics is least likely to represent company strengths or competitive assets? A) Physical assets such as state-of-the-art plants, attractive real estate locations, and worldwide distribution facilities B) More plants than rivals, more employees than rivals, being in business more years than rivals, and smaller capital investment expenditures than rivals C) A well-known brand name, a highly motivated workforce, and the collective learning embedded in the organization D) Short development times in bringing new products to market, a strong dealer network, strong collaborative partnerships with key suppliers, and an experienced and capable workforce E) Proven quality control skills, good supply chain management capabilities, state-of-the-art systems for doing business via the Internet, and a strong balance sheet

B) More plants than rivals, more employees than rivals, being in business more years than rivals, and smaller capital investment expenditures than rivals

Which of the following is not one of the questions that needs to be answered in thinking strategically about a company's industry and competitive environment? A) What kinds of competitive forces are industry members facing, and how strong is each force? B) What emerging opportunities and threats are evident in the industry environment? C) What market positions do industry rivals occupy—who is strongly/weakly positioned and who is not? D) What are the key factors for future competitive success? E) What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability?

B) What emerging opportunities and threats are evident in the industry environment?

Which of the following is not a measure of the competitive power of a company's resource strengths? A) How hard it is for competitors to copy the resource strength B) Whether the company has more resources/capabilities than any other key rival C) Whether a company's resource is really competitively valuable D) How easily the resource or capability can be trumped by the substitute resources/capabilities of rivals E) Whether the resource or capability is rare and something rivals lack

B) Whether the company has more resources/capabilities than any other key rival

An industry's key success factors A) can best be determined by studying the strategies of those companies in the industry's best strategic group and those in the worst strategic group. B) are so important to competitive success that all firms in the industry must pay close attention to them or risk becoming an industry laggard or failure. C) are mainly a function of an industry's macro-environment and dominant economic features. D) can best be determined by identifying the similarities in the strategies of rival companies—those strategy elements that are most commonly found in the strategies of rivals can be considered key success factors. E) usually relate to technology and manufacturing-related capabilities and rarely to distribution or marketing capabilities.

B) are so important to competitive success that all firms in the industry must pay close attention to them or risk becoming an industry laggard or failure.

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 overall value chain activities relative to how efficiently competitors manage theirs. C) whether it does a better job of building its resource strengths more cost effectively than rivals. D) whether it possesses more core competencies and competitive capabilities than 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) how efficiently it manages its overall value chain activities relative to how efficiently competitors manage theirs.

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 and delivering value to customers. C) those activities a company performs that represent "best practices"—only best practice activities are capable of delivering value to customers and thus qualify to be part of a company's value chain. 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—it is these activities that underpin a company's efforts to create value for customers and shareholders.

B) the collection of activities it performs in the course of designing, producing, marketing, delivering, and supporting its product or service and delivering value to customers.

The competitive power of a company resource strength or competitive capability hinges on A. how hard it is for competitors to copy. B. whether it is rare and something rivals lack. C. whether it is really competitively valuable and having the potential to contribute to a competitive advantage. D. how easily it can be trumped by the substitute resources/capabilities of rivals. E. All of these.

E. All of these.

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 and delivering value to customers—these activities can be grouped into (a) the primary activities that are foremost in creating value for customers and (b) the related support activities that facilitate and enhance the performance of the primary activities. C) those activities a company performs that represent "best practices"—only best practice activities are capable of delivering value to customers and thus qualify to be part of a company's value chain. 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—it is these activities that underpin a company's efforts to create value for customers and shareholders.

B) the collection of activities it performs in the course of designing, producing, marketing, delivering, and supporting its product or service and delivering value to customers—these activities can be grouped into (a) the primary activities that are foremost in creating value for customers and (b) the related support activities that facilitate and enhance the performance of the primary activities.

To which of the following firms is the term "repeatedly evolving strategy" MOST applicable? A. A government agency that makes plans for a set period of time and implements them phase by phase through the tenure B. A mobile company, established in a saturated market, that aims at quarterly release of new products C. A new cosmetics manufacturer in a market that replicates the products of a competitor at a moderate quality and lower price D. A nationalized bank that lends at a lower interest rate but a zero processing fee in a market crowded with privatized banks running at high cost E. A firearms regulatory agency, set up by the government, that publishes industry standards for safety, reliability, and quality of arms and ammunition

B. A mobile company, established in a saturated market, that aims at quarterly release of new products

Which of the following airlines does NOT employ a low-cost provider strategy? A. Airline 1 offers low prices on short-distance flights and cuts down on meals during flights. B. Airline 2 offers low prices on long-distance flights and has long service times for its planes between flights. C. Airline 3 offers low prices on short-distance flights and improves flight carrier capacity through addition of seats by reducing distance between existing seats. D. Airline 4 offers low prices on short-distance flights and pays minimum wage rates to the flight crew. E. Airline 5 offers low prices on long-distance flights and charges fees for carry-on as well as checked luggage.

B. Airline 2 offers low prices on long-distance flights and has long service times for its planes between flights.

Consider the following three companies and their strategies. · Company A is an established database management company that acquires a well-reputed but small publishing house to enter the booming publishing industry. · Company B, a sports management house, declared bankruptcy during a recent recession but now has created a television network that airs regional sports events. · Company C, a package delivery business, is a startup based on delivery efficiency models created by a few students, and delivers almost all kinds of packages. Which of the following describes the use of strategies by these companies accurately? A. Company B employs an emergent strategy, whereas Companies A and C employ deliberate strategies. B. All three companies employ deliberate strategies. C. All three companies employ emergent strategies. D. Company C employs a deliberate strategy, Companies A and B employ emergent strategy. E. Companies A and C employ emergent strategies, Company B employs a deliberate strategy.

B. All three companies employ deliberate strategies.

A luxury bathtub manufacturer offered scented bubble bath foams and massage coupons as a gimmick when their bathtubs did not sell. Their bubble foam became famous among some women and led to a line of exclusive bath products for women. They established shops in various regional locations and roped in celebrities to market their products to enhance sales. Now its products are sold through retail outlets and online sites throughout the world. Which of the following is accurate? A. Offering scented bubble bath foams and massage coupons was an emergent strategy. B. Creating a sub-brand that offered exclusive bath products for women was an emergent strategy. C. Establishing shops in regional locations was an emergent strategy. D. Roping in celebrities to market their products was an emergent strategy. E. Creating a worldwide presence through retail outlets and online sites was an emergent strategy.

B. Creating a sub-brand that offered exclusive bath products for women was an emergent strategy.

FaberRoad, a respected courier brand, is fast losing its market share to competitors who do overnight deliveries of packages or offer lower prices. The company's research department has found that many customers care more about knowing exactly when a package will arrive than getting it the next day. Which strategy would best address the current state of FaberRoad and help it regain its market? A. Employing night delivery drivers at a high cost and maintenance charges B. Developing radio tags that could be attached to packages to allow for real-time tracking by customers' PCs and mobile phones C. Diversifying the different types of packages that can be transported and enabling booking through calls D. Acquiring small transportation companies with cheaper trucks and tempos, rebranding, and using them for deliveries E. Engaging in expensive advertising with new tag lines and famous celebrities to enhance its brand image in the market

B. Developing radio tags that could be attached to packages to allow for real-time tracking by customers' PCs and mobile phones

Which of the following pizza firms competing in a crowded market likely offers the best value proposition to its customers, based on the following sales pitches? A. Firm A: "The Tastiest Pizza You've Ever Had." B. Firm B: "Get fresh, hot pizza, delivered under 20 minutes-or it's free." C. Firm C: "Get your pizza at your doorstep-absolutely free delivery, anywhere." D. Firm D: "One pizza, 5 points: to be redeemed with a pan pizza upon reaching 50 points." E. Firm E: "Open you pizza box and find a free gift. Hurry! Free gifts for 100 lucky customers."

B. Firm B: "Get fresh, hot pizza, delivered under 20 minutes-or it's free."

Competitive pressures stemming from the threat of entry are weaker when: A. the incumbents do not enjoy preferential access to distribution channels (e.g., securing adequate space on retailer shelves). B. strong network effects exist. C. the industry outlook is risky or uncertain. D. incumbent firms have little ability to leverage distributors, dealers, and/or retailers to retain their business. E. the nature of the industry entails few scale economies.

C. the industry outlook is risky or uncertain.

Which of the following is NOT one of the managerial considerations in determining how to compete successfully? A. How can a company attract, keep, and please customers? B. How can a company modify its entire product line to emphasize its internal service attributes? C. How should a company respond to changing economic and market conditions? D. How should a company be competitive against rivals? E. How should a company position itself in the marketplace?

B. How can a company modify its entire product line to emphasize its internal service attributes?

A winning strategy must pass which three tests? A. The Dominant Market Test, the Sustainable Advantage Test, and the Profit Test B. The Fit Test, the Competitive Advantage Test, and the Performance Test C. The Sustainable Performance Test, the Fit Test, and the Profit Test D. The Performance Test, the Dominant Market Test, and the Fit Test E. The Fit Test, the Sustainable Advantage Test, and the Dominant Market Test

B. The Fit Test, the Competitive Advantage Test, and the Performance Test

Management's blueprint for how and why the company's business approaches will generate revenues sufficient to cover costs and produce attractive profits and returns on investment: A. best describes what is meant by a company's strategy. B. best describes what is meant by a company's business model. C. accounts for why a company's financial objectives are at the stated level. D. portrays the essence of a company's business purpose or mission. E. is what is meant by the term strategic intent.

B. best describes what is meant by a company's business model.

A regional electric scooter manufacturer sells its scooter at a lower price than other two-wheeler manufacturers. What will make the product most attractive for customers? A. low profit B. high value C. high cost D. low value E. low cost

B. high value

A company's business model: A. concerns the actions and business approaches that will be used to grow the business, conduct operations, and stake a competitor's market position. B. is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit. C. concerns what combination of moves in the marketplace it plans to make to outcompete rivals. D. deals with how it can simultaneously maximize profits and operate in a socially responsible manner that keeps its prices as low as possible. E. concerns how management plans to pursue strategic objectives, given the larger imperative of meeting or beating its financial performance targets.

B. is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit.

A company's strategy is NOT concerned with management's choices about how to: A. attract and please customers. B. stake out the same market position as successful rival companies. C. grow the business. D. compete successfully. E. conduct operations and improve the company's financial and market performance.

B. stake out the same market position as successful rival companies.

A company's realized strategy evolves from one version to the next due to: A. changing management direction because of understanding several appealing strategy alternatives. B. the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms. C. ongoing turnover in the managerial and executive ranks (new managers often decide to shift to a different strategy). D. pressures from shareholders to boost profit margins and pay higher dividends. E. the importance of keeping the company's business model fresh and up-to-date.

B. the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms.

72. A "think-local, act local" multidomestic strategy entails: ␣ ␣

B. .giving local managers considerable strategy-making latitude and often producing different product versions for different countries.

In a weighted competitive strength assessment, the sum of the weights should add up to A. 100%. B. 1.0. C. 10. D. 100. E. None of these.

B. 1.0.

In a weighted competitive strength assessment, the sum of importance weights should add up to: A. 100%. B. 1.00. C. 10. D. 100. E. 1000.

B. 1.00.

Which one of the following is inaccurate as concerns a distinctive competence? A. A distinctive competence is a competitively important activity that a company performs better than its competitors. B. A distinctive competence is typically less difficult for rivals to copy than a core competence. C. A distinctive competence can be a basis for sustainable competitive advantage. D. A distinctive competence can underpin and add real punch to a company's strategy. E. A distinctive competence gives a company competitively valuable capability that is unmatched by rivals.

B. A distinctive competence is typically less difficult for rivals to copy than a core competence.

Which of the following is NOT accurate as concerns a distinctive competence? A. A distinctive competence is a competitively important activity that a company performs better than its rivals. B. A distinctive competence is typically less restrictive for rivals to copy than a core competence. C. A distinctive competence can be a basis for sustainable competitive advantage. D. A distinctive competence qualifies as a superior internal strength. E. A distinctive competence enables delivering stand-out value to customers (in the form of lower prices, better product performance, or superior service).

B. A distinctive competence is typically less restrictive for rivals to copy than a core competence.

107.Profit sanctuaries are found to differ by a company's strategy, such that: ␣ ␣

B. An international competitor usually has a profit sanctuary in its home market and may have other . sanctuaries in countries where it has a strong position and market share.

In doing SWOT analysis and trying to identify a company's market opportunities, which of the following is NOT an example of a potential market opportunity that a company may have? A. Serving additional customer groups or market segments B. Growing buyer preferences for substitutes for the industry's product C. Acquiring rival firms or companies with attractive technological expertise or capabilities D. Expanding into new geographic markets E. Openings to win market share away from rivals

B. Growing buyer preferences for substitutes for the industry's product

Why does a U.S. company exporting wooden furniture manufactured in Malaysia to the European Union benefit from the decline in the value of ringgit against the euro? A. Because decline in the value of ringgit against euro raises the cost of furniture manufactured in Malaysia, making it less competitive in European markets B. Because decline in the value of ringgit against euro reduces the cost of furniture manufactured in Malaysia, making it more competitive in European markets C. Because decline in the value of ringgit against euro has no impact on the cost of furniture manufactured in Malaysia, both in Malaysian or European markets D. Because decline in the value of ringgit against euro makes European goods more competitive as compared to Malaysian goods E. Because decline in the value of ringgit against euro makes Malaysian goods less competitive in the U.S. market

B. Because decline in the value of ringgit against euro reduces the cost of furniture manufactured in Malaysia, making it more competitive in European markets

Which of the following statements is false? A. The higher a company's costs are above those of close rivals, the lmore competitively vulnerable it becomes. B. Because the value chains of rival companies tend to be quite similar, costs outside a company's own value chain do not affect whether it is a cost advantage or disadvantage vis-a-vis key rivals. C.A company's cost competitivenss depends not only on the costs of internally performed value chain activities but also on the costs of activities performed by its suppliers and forward channel allies. D. The stronger a company's financial performance and market position, the more likely it has a well-conceived, well-executed strategy. E. A competence is something a company is good at doing whereas a core competence is a proficiently performed internal activity that is central to a company's strategy and competitivenes.

B. Because the value chains of rival companies tend to be quite similar, costs outside a company's own value chain do not affect whether it is a cost advantage or disadvantage vis-a-vis key rivals.

Which one of the following is not part of conducting a SWOT analysis? A. Identifying a company's resource strengths and competitive capabilities B. Benchmarking the company's resource strengths and competitive capabilities against industry key success factors C. Identifying a company's market opportunities D. Drawing conclusions about the company's overall business situation—what is attractive and what is unattractive about the company's circumstances? E. Translating the results of the analysis into actions for improving the company's strategy and market position

B. Benchmarking the company's resource strengths and competitive capabilities against industry key success factors

In which of the following instances are industry members not subject to stronger competitive pressures from substitute products? A. The costs to buyers of switching over to the substitutes are low B. Buyers are dubious about using substitutes C. The quality and performance of the substitutes is well matched to what buyers need to meet their requirements D. Buyer brand loyalty is weak E. Substitutes are readily available at competitive prices

B. Buyers are dubious about using substitutes

9. In which of the following instances are industry members NOT subject to stronger competitive pressures from substitute products? A. The costs to buyers of switching over to the substitutes are low. B. Buyers are dubious about using substitutes. C. The quality and performance of the substitutes is well-matched to what buyers need to meet their requirements. D. Buyer brand loyalty is weak. E. Substitutes are readily available at competitive prices.

B. Buyers are dubious about using substitutes.

In which of the following instances are industry members NOT subject to stronger competitive pressures from substitute products? A. The costs to buyers of switching over to the substitutes are low. B. Buyers are dubious about using substitutes. C. The quality and performance of the substitutes is well-matched to what buyers need to meet their requirements. D. Buyer brand loyalty is weak. E. Substitutes are readily available at competitive prices.

B. Buyers are dubious about using substitutes.

Which of the following is NOT a factor that causes buyer bargaining power to be stronger? A. Some buyers are a threat to integrate backward into the business of sellers and become an important competitor. B. Buyers are small and numerous relative to sellers. C. Buyers have considerable discretion over whether and when they purchase the product. D. Buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs. E. The costs incurred by buyers in switching to competing brands or to substitute products are relatively low.

B. Buyers are small and numerous relative to sellers.

Which of the following companies is using cost drivers effectively to manage value chain activities cost efficiently? A. Company A orders large amounts of supplies and keeps them stocked till customer demand rises to prevent falling behind schedule in meeting customer needs. B. Company B uses just-in-time inventories and produces made-to-order products as and when customer demand rises. C. Company C collects customer requests first and starts processing them only after reaching a certain number. D. Company D routes all its supplies to a warehouse for storage and then transports them to individual factories for processing. E. Company E substitutes lower-cost inputs with high-quality, high-cost inputs to gain customer attention and loyalty.

B. Company B uses just-in-time inventories and produces made-to-order products as and when customer demand rises.

Which of the following can aid industries in identifying key success factors? A. Global distribution capabilities B. Crucial product attributes and service characteristics C. Low distribution costs D. Accurate filling of buyer orders E. Short delivery time capability

B. Crucial product attributes and service characteristics

What aspect of the diamond framework is MOST LIKELY responsible for GlenmarkPharma setting up manufacturing facilities in the United States, the world's largest market for pharmaceuticals? A. Licensing strategies B. Demand conditions C. Joint venture strategies D. Franchising strategies E. Firm strategy, structure, and rivalry

B. Demand conditions

Which one of the following is NOT an integral part of driving forces analysis? A. Determining whether forces are acting to cause fundamental changes in industry conditions and/or the industry's competitiveness B. Determining whether forces are acting to cause industry rivals to shift to a different strategic group C. Determining whether forces are acting to strengthen or weaken market demand D. Determining whether forces are acting to make competition more or less intense E. Determining whether forces are acting to raise or lower industry profitability

B. Determining whether forces are acting to cause industry rivals to shift to a different strategic group

In doing SWOT analysis and trying to identify a company's market opportunities, which of the following is not an example of a potential market opportunity that a company may have? A. Serving additional customer groups or market segments B. Growing buyer preferences for substitutes for the industry's product C. Acquiring rival firms or companies with attractive technological expertise or capabilities D. Expanding into new geographic markets E. Openings to win market share away from rivals

B. Growing buyer preferences for substitutes for the industry's product

Which of the following strategies identifies a multidomestic approach? A. Texas Instruments strongly encourages its trading partners to use the UN/EDIFACT standard. B. Hard Rock Cafes in Hawaii offer fish tacos and ahi tuna sandwich. C. Coca Cola's general market approach is controlled from Atlanta. D. Nestle established its own distribution network in China. E. Air Asia adapts its price to industry pressures.

B. Hard Rock Cafes in Hawaii offer fish tacos and ahi tuna sandwich.

In doing SWOT analysis, which of the following is NOT an example of a potential resource weakness or competitive deficiency that a company may have? A. Less productive R&D efforts than rivals B. Having a single, unified functional strategy instead of several distinct functional strategies C. Lack of a strong brand image and reputation (as compared to rivals) D. Higher overall unit costs relative to rivals E. Too narrow a product line relative to rivals

B. Having a single, unified functional strategy instead of several distinct functional strategies

In doing SWOT analysis, which one of the following is not an example of a potential resource weakness or competitive deficiency that a company may have? A. Less productive R & D efforts than rivals B. Having a single, unified functional strategy instead of several distinct functional strategies C. Lack of a strong brand image and reputation (as compared to rivals) D. Higher overall unit costs relative to rivals E. Too narrow a product line relative to rivals

B. Having a single, unified functional strategy instead of several distinct functional strategies

Which of the following is a good example of a manufacturing-related key success factor? A. Global distribution capabilities B. High labor productivity (especially if the production process has high labor content) C. Low distribution costs D. Accurate filling of buyer orders E. Short delivery time capability

B. High labor productivity (especially if the production process has high labor content)

A ketchup manufacturer convinces a supplier who makes vinegar to set up a nearby plant. Which of the following benefits will the ketchup manufacturer be least assured of? A. Improved value chain system B. Improved overall quality control C. Lower incoming shipping costs D. Just-in-time deliveries E. Reduced storage needs

B. Improved overall quality control

The competitive power of a company resource strength is not measured by which one of the following tests? A. Is the resource rare and something rivals lack? B. Is the resource strength something that a company does internally rather than in collaborative arrangements with outsiders? C. Is the resource strength easily trumped by the substitute resources/capabilities of rivals? D. Is the resource strength hard to copy? E. Is the resource strength competitively valuable, having the potential to contribute to a competitive advantage?

B. Is the resource strength something that a company does internally rather than in collaborative arrangements with outsiders?

The competitive power of a company's resource strength is NOT measured by which one of the following tests? A. Is the resource rare and something rivals lack? B. Is the resource strength something that a company has internally rather than in collaborative arrangements with outsiders? C. Is the resource strength easily trumped by the substitute resources/capabilities of rivals? D. Is the resource strength hard to copy? E. Is the resource strength competitively valuable, having the potential to contribute to a competitive advantage?

B. Is the resource strength something that a company has internally rather than in collaborative arrangements with outsiders?

79. What is the best way to achieving the efficiency potential of a global strategy? ␣ ␣

B. It requires that resources and best practices be shared, value chain activities be integrated, and . capabilities be transferred from one location to another as they are developed.

What is the best way to achieve the efficiency potential of a global strategy? A. It demands managerial attention to be focused on objective-setting specifically oriented toward production practices. B. It requires that resources and best practices be shared, value chain activities be integrated, and capabilities be transferred from one location to another as they are developed. C. It requires that the best identified resources and capabilities be centralized at headquarters. D. It requires value chain activities to be dispersed across many countries to elevate cost control management as a primary focus in all countries. E. It requires giving local managers considerable latitude for executing strategies for the country markets they are responsible for.

B. It requires that resources and best practices be shared, value chain activities be integrated, and capabilities be transferred from one location to another as they are developed.

Apollo Tires sets up a manufacturing unit in Mexico. Following this, Renault-Nissan signs a supply contract with the tire multinational. In which of the following ways is Renault-Nissan likely to gain from the pact? A. Different styles of management, organization, and strategy B. Knowledge sharing within same value chain system C. Availability of natural resources at low cost D. Growth potential and large size of the market E. Government policies in the host country

B. Knowledge sharing within same value chain system

When concentrating production in a few locations, which of the following can allow a manufacturer to lower unit costs, boost quality, or master a new technology more quickly? A. Significant scale economies B. Learning-curve effects C. Superior resources D. Profit sanctuaries E. Supporting industries

B. Learning-curve effects

The following ARE examples of an external threat to a company's future profitability

B. New legislation that entails burdensome and costly government regulations C. Slowdowns in market growth D. More intense competitive pressures E. The introduction of restrictive trade policies in countries where the company does business

67. Which of the following is the most unlikely element of a localized multidomestic strategy? ␣ ␣

B. Plants scattered across many host countries, each producing product versions for local area markets.

Which of the following is not a component of evaluating a company's resources and competitive position? A. Evaluating how well the present strategy is working B. Scanning the environment to determine a company's best and most profitable customers C. Assessing whether the company's costs and prices are competitive D. Evaluating whether the company is competitively stronger or weaker than key rivals E. Pinpointing what strategic issues and problems merit front-burner managerial attention

B. Scanning the environment to determine a company's best and most profitable customers

83. Which of the following is the most unlikely element of a "think global, act global" approach to crafting a global strategy?

B. Scattering plants across many countries, with each plant producing product versions for local area markets.

66. Which of the following is the most UNLIKELY element of a "think global, act global" approach to crafting a global strategy? A. Having minimal responsiveness to buyer tastes, cultural traditions, and market conditions in each country market B. Scattering plants across many countries, with each plant producing product versions for local area markets C. Utilizing the same competitive capabilities, distribution channels, and marketing approaches worldwide D. Requiring local managers in host countries to stick close to the chosen global strategy E. Selling much the same products under the same brand names worldwide

B. Scattering plants across many countries, with each plant producing product versions for local area markets

Which of the following is NOT one of the pitfalls of a low-cost provider strategy? A. Overly aggressive price-cutting B. Setting the industry's price ceiling to capture volume gains and achieve economies of scale C. Relying on an approach to reduce costs that can be easily copied D. Becoming too fixated on cost reduction E. Having the basis for the firm's cost advantage undermined by cost-saving technological breakthroughs that can be readily adopted by rival firms

B. Setting the industry's price ceiling to capture volume gains and achieve economies of scale

Which of the following is MOST likely to qualify as a driving force? A. Increases in price-cutting by rival sellers and the launch of major new advertising campaigns by one or more rivals B. Successful introduction of innovative new products or new ways to market products C. An increase in the prices of substitute products D. Decisions on the part of industry's three biggest competitors not to pursue a strategy of striving to be the industry's low-cost leader E. Decisions by one or more outsiders not to attempt to enter the industry

B. Successful introduction of innovative new products or new ways to market products

27. Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is NOT accurate? ␣

B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates.

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is NOT accurate? A. Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets. B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Exporters win when the currency of the country from which the goods are being exported grows weaker relative to the currencies of the countries that the goods are being exported to. D. The advantages of manufacturing goods in a particular country can be undermined when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E. Domestic companies under pressure from lower-cost imports are benefited when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates.

Which of the following statements regarding multidomestic competition is false? A. Buyers in different countries are attracted to different product attributes. B. The benefits from global integration and standardization are high. C. Industry conditions and competitive forces in each national market differ in important respects. D. The mix of competitors in each country market varies from country to country. E. Winning in one country market does not necessarily signal the ability to fare well in other countries.

B. The benefits from global integration and standardization are high.

Which of the following factors is NOT a relevant consideration in determining the strength of buyer bargaining power? A. The relationship between the buyer market and seller market B. The degree to which the seller is a manufacturer of goods and services in substantial quantities C. The degree to which buyers pose a credible threat to integrate backward into the product market of sellers D. The degree to which buyers are well-informed about a seller's products, prices and costs E. The degree to which industry goods are standardized and undifferentiated

B. The degree to which the seller is a manufacturer of goods and services in substantial quantities

Which of the following is not a factor that causes buyer bargaining power to be stronger? A. Some buyers are a threat to integrate backward into the business of sellers B. The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities C. Buyers have considerable discretion over whether and when they purchase the product D. Buyers are well informed about sellers' products, prices, and costs E. The costs incurred by buyers in switching to competing brands or to substitute products are relatively low

B. The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities

Which of the following is NOT an example of a threat to a company's future profitability and well-being? A. The likely entry of potent new competitors B. The lack of a well-known brand name with which to attract new customers and help retain existing customers C. Shifts in buyer needs and tastes away from the industry's product D. Costly new regulatory requirements E. Growing bargaining power on the part of the company's major customers and major suppliers

B. The lack of a well-known brand name with which to attract new customers and help retain existing customers

The competitive pressures on companies within an industry comes from those: A. associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry. B. companies in other industries attempting to win buyers over to their substitute products. C. associated with the threat of new entrants into the marketplace. D. associated with the bargaining power of suppliers and customers. E. All of these.

E. All of these.

Which of the following is not an example of a threat to a company's future profitability? A. Likely entry of potent new competitors B. The lack of a well-known brand name with which to attract new customers and help retain existing customers C. Shifts in buyer needs and tastes away from the industry's product D. Costly new regulatory requirements E. Growing bargaining power on the part of the company's major customers and major suppliers

B. The lack of a well-known brand name with which to attract new customers and help retain existing customers

How are a company's organizational capabilities developed and enabled? A. By strengthening the traditions that company executives are committed to maintaining B. Through deployment of a company's resources or some combination of its resources C. By talking openly about the problems of the present company and determining how new behaviors will improve performance D. By shifting from decentralized to centralized decision-making E. By urging company personnel to search outside the company for work practices and operating approaches that may be an improvement over what the company is presently doing

B. Through deployment of a company's resources or some combination of its resources

3. Which of the following is NOT a typical reason for companies to expand into the markets of foreign countries? ␣

B. To strengthen its capability to employ vertical integration strategies, especially those that involve partial . integration (building positions in selected stages of the industry's value chain).

97. In which of the following circumstances is it advantageous for a multinational competitor to concentrate its activities in a limited number of locations in order to build competitive advantage?

B. When a company has competitively superior patented technology that it can license to foreign partners.

Which one of the following does NOT intensify the competitive pressures associated with the threat of entry? A. When incumbent firms are unable or unwilling to launch competitive initiatives to strongly contest the entry of newcomers B. When industry members are struggling to earn good profits C. When entry barriers are relatively low and buyer demand for the product is growing fairly rapidly D. When existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence E. When newcomers can expect to earn attractive profits and a number of outsiders have the expertise and resources to hurdle whatever entry barriers exist

B. When industry members are struggling to earn good profits

Which one of the following does not intensify the competitive pressures associated with the threat of entry? A. When incumbent firms are unable or unwilling to launch competitive initiatives to strongly contest the entry of newcomers B. When industry members are struggling to earn good profits C. When entry barriers are relatively low D. When existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence E. When newcomers can expect to earn attractive profits and a number of outsiders have the expertise and resources to hurdle whatever entry barriers exist

B. When industry members are struggling to earn good profits

Which one of the following is not something that can be learned from doing a competitive strength assessment? A. The factors on which a company is competitively strongest and weakest vis-à-vis key rivals B. Whether a company should correct its weaknesses by adopting best practices and revamping the makeup of its value chain C. Which of the rated companies is competitively strongest and what size competitive advantage it enjoys D. Whether a company has a net competitive advantage or a net competitive disadvantage relative to key rivals (with the size of the advantage/disadvantage being 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. Whether a company should correct its weaknesses by adopting best practices and revamping the makeup of its value chain

Which of the following is NOT a reliable measure of how well a company's current strategy is working? A. Whether the company's sales are growing faster, slower, or about the same pace as the industry as a whole, thus resulting in a rising, falling, or stable market share B. Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product C. The firm's image and reputation with its customers D. Whether its profit margins are rising or falling and how large its margins are relative to those of its rivals E. Evidence of improvement in internal processes such as defect rate, order fulfillment, delivery times, days of inventory, and employee productivity

B. Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product

Which one of the following is not a reliable measure of how well a company's current strategy is working? A. Whether the company's sales are growing faster, slower, or about the same pace as the industry as a whole, thus resulting in a rising, falling, or stable market share B. Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product C. The firm's image and reputation with its customers D. Whether its profit margins are rising or falling and how large its margins are relative to those of its rivals E. How well the firm stacks up against rivals on technology, product innovation, customer service, product quality, price, speed in getting newly developed products to market, and other relevant factors on which buyers base their choice of which brand to purchase

B. Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product

Which of the following factors is not a relevant consideration in determining the strength of buyer bargaining power? A. Whether winning the business of prestigious customers gives a seller important market exposure and heightens its brand name B. Whether the seller is a manufacturer or a wholesaler/distributor C. Whether buyers pose a major threat to integrate backward into the product market of sellers D. Whether sellers' products are weakly differentiated, making it easy for buyers to switch to competing brands E. Whether collaborative partnerships and alliances between particular sellers and buyers put rivals lacking such collaborative relationships at a competitive disadvantage

B. Whether the seller is a manufacturer or a wholesaler/distributor

59. Which of the following statements regarding multidomestic competition is false? ␣ ␣

B. With multidomestic competition, the power and strength of a company's strategy and resource . capabilities in one country significantly enhance its competitiveness in other country markets.

During the 1980s, the YKK Group developed and manufactured all its fastening products within Japan. Which of the following aspects of the global strategy was YKK trying to achieve? A. YKK catered to homogenous buyer needs across countries and regions. B. YKK centralized its value chain thereby facilitating centralized control. C. YKK engaged in higher levels of R&D by spreading risks over higher-volume output. D. YKK sold the same products under the same brand name everywhere. E. YKK established a single plant to produce different versions of the same product.

B. YKK centralized its value chain thereby facilitating centralized control.

When a company has real proficiency in performing a competitively important value chain activity, it is said to have A. a distinctive competence. B. a core competence. C. a key value chain proficiency. D. a competitive advantage over rivals. E. a company competence.

B. a core competence.

The difference between a merger and an acquisition is that: A. a merger involves one company purchasing the assets of another company with cash, whereas an acquisition involves a company acquiring another company by buying all of the shares of its common stock. B. a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired). C. in a merger, the companies retain their original names, whereas in an acquisition the name of the company being acquired is changed to be the name of the acquiring company. D. a merger is a combination of three or more companies, whereas an acquisition is a pooling of interests of just two companies. E. a merger involves two or more companies deciding to adopt the same strategy, whereas an acquisition involves one company taking over the strategy-making function of another company.

B. a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired).

A linked and closely integrated set of competitive assets centered around one or more cross-functional capabilities is termed: A. organizational assets. B. a resource bundle. C. a resource capability. D. functional method compilation. E. an integrated asset advantage.

B. a resource bundle.

The extent to which firms are meeting objectives (good performance) suggests they: A. are likely to prosper in the future. B. are likely to continue their present strategy with only minor fine-tuning. C. are virtually certain to make fresh strategic moves. D. recognize "status quo" as the best course of action to adopt. E. realize refocusing will ensure competitive gains.

B. are likely to continue their present strategy with only minor fine-tuning.

Resource and capability analysis is designed to A. ascertain the internal market place of non-distinct divisions of the company. B. ascertain which of a company's resources and capabilities are competitively valuable. C. stimulate demand for a product. D. ascertain to what extent a competitor can sustain a competitive advantage. E. stimulate economic growth for companies within the industry.

B. ascertain which of a company's resources and capabilities are competitively valuable.

Resource and capability analysis is designed to: A. ascertain the internal marketplace of non-distinct divisions of the company. B. ascertain which of a company's resources and capabilities are competitively valuable. C. stimulate demand for a product. D. ascertain to what extent a competitor can sustain a competitive advantage. E. stimulate economic growth for companies within the industry.

B. ascertain which of a company's resources and capabilities are competitively valuable.

The Achilles heel (or biggest disadvantage/pitfall) of relying heavily on alliances and cooperative strategies is: A. that partners will not fully cooperate or share all they know, preferring instead to guard their most valuable information and protect their more valuable know-how. B. becoming dependent on other companies for essential expertise and capabilities. C. the added time and extra expenses associated with engaging in collaborative efforts. D. having to compromise the company's own priorities and strategies in reaching agreements with partners. E. the collaborative arrangements will not live up to expectations.

B. becoming dependent on other companies for essential expertise and capabilities.

Perceived value and signaling value are often an important part of a successful differentiation strategy because: A. of the standardization of buyer needs and preferences. B. buyers seldom will pay for value they don't perceive, no matter how real the value of the differentiating extras may be. C. buyer satisfaction cannot be achieved until a product's value is promoted through clever ads. D. differentiation is all about selling products to sophisticated buyers. E. there are no other ways to differentiate a product.

B. buyers seldom will pay for value they don't perceive, no matter how real the value of the differentiating extras may be.

The value chains of rival companies A. tend to be essentially the same—any differences are typically minor. B. can differ substantially, reflecting differences in the evolution of each company's own particular business, differences in strategy, and differences in the approaches being used to execute strategy. C. are fairly similar or fairly different, depending on how many activities are performed internally and how many are outsourced. D. can be either fairly similar or fairly different, depending on the extent to which each company's primary and support activities are comprised of fixed cost activities and variable cost activities. E. are fairly similar except when rival companies have quite different product designs.

B. can differ substantially, reflecting differences in the evolution of each company's own particular business, differences in strategy, and differences in the approaches being used to execute strategy.

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

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

The nature and strength of the competitive forces that prevail in an industry is generally a joint product of: A. competition from rival sellers. B. competition from potential new entrants. C. competition from producers of substitute products. D. competitive pressures stemming from the bargaining power of both suppliers and buyers. E. All of these.

E. All of these.

Strategic alliances are: A. the cheapest means of developing new technologies and getting new products to market quickly. B. collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective. C. a proven means of reducing the costs of performing value chain activities. D. best used to insulate a company from the impact of the five competitive forces. E. the best way to help insulate a firm from the adverse impacts of industry driving forces.

B. collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective.

95. To use location to build competitive advantage when competing in both domestic and foreign markets, a company must:

B. consider (1) whether to concentrate each activity it performs in a few select countries or to disperse . performance of the activity to many nations, and (2) in which countries to locate particular activities.

20. In identifying an industry's key success factors, strategists should: A. try to single out all factors that play a major role in shaping whether buyer demand grows rapidly or slowly. B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage. C. consider whether the number of strategic groups is increasing or decreasing and whether the five competitive forces are powerful or relatively weak. D. consider what it will take to overtake the company with the industry's overall best strategy. E. focus their attention on what it will take to capitalize on the impacts of the industry's driving forces.

B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage.

In identifying an industry's key success factors, strategists should A. try to single out all factors that play a major role in shaping whether buyer demand grows rapidly or slowly. B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage. C. consider whether the number of strategic groups is increasing or decreasing and whether the five competitive forces are powerful or relatively weak. D. consider what it will take to overtake the company with the industry's overall best strategy. E. focus their attention on what it will take to capitalize on impacts of the industry's driving forces.

B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage.

In identifying an industry's key success factors, strategists should: A. try to single out all factors that play a major role in shaping whether buyer demand grows rapidly or slowly. B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage. C. consider whether the number of strategic groups is increasing or decreasing and whether the five competitive forces are powerful or relatively weak. D. consider what it will take to overtake the company with the industry's overall best strategy. E. focus their attention on what it will take to capitalize on the impacts of the industry's driving forces.

B. consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage.

A production-based emphasis toward a low-cost provider strategy usually requires a company to strive for: A. product superiority. B. continuous cost reductions without sacrificing acceptable quality and essential features. C. small-scale production or custom-made products that match the tastes and requirements of niche members. D. appealing features and better quality at lower costs than rivals. E. whatever differentiating features buyers are willing to pay for.

B. continuous cost reductions without sacrificing acceptable quality and essential features.

Entering into strategic alliances and collaborative partnerships can be competitively valuable because: A. working closely with outsiders is essential in developing new technologies and new products in virtually every industry. B. cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology. C. they represent highly effective ways to achieve low-cost leadership and capture first-mover advantages. D. they are a powerful way for companies to build loyalty and goodwill among customers with diverse needs and expectations. E. they are quite effective in helping a company transfer the risks of threatening external developments to other companies.

B. cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology.

80. A "think global, act global" approach to strategy-making is preferable to a "think local, act local" approach when: ␣

B. country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy.

As a rule, the collective impact of competitive pressures associated with the five competitive forces: A. determines the strength of the industry's driving forces. B. determines the extent of the competitive pressure on industry profitability. C. means that fewer companies can achieve a competitive advantage via anything other than being the industry's low-cost leader. D. means there will be a larger number of competitive advantage opportunities for industry members. E. means there will be a greater number of industry key success factors.

B. determines the extent of the competitive pressure on industry profitability.

Which of the following is not a reason that industry rivals are often motivated to enter into strategic partnerships with key suppliers? A) To enhance the quality of parts and components being supplied and/or to reduce defect rates B) To speed the availability of next-generation components C) To reduce the bargaining power they face from buyers of their products D) To squeeze out important cost savings for both themselves and their suppliers E) To reduce inventory and logistics costs

C) To reduce the bargaining power they face from buyers of their products

Understanding where the company is competitive requires: A. determining whether a company has a cost-effective value chain. B. developing quantitative strength ratings for the company and key rivals on each industry key success factor and each pivotal resource, capability, and value chain activity. C. identifying a company's core competencies and distinctive competencies (if any). D. analyzing whether a company is well positioned to gain market share and be the industry's profit leader. E. developing quantitative measures of a company's chances for future profitability.

B. developing quantitative strength ratings for the company and key rivals on each industry key success factor and each pivotal resource, capability, and value chain activity.

104.Sharing and transferring resources and capabilities across borders may also contribute to the development of broader or deeper competencies and capabilities thereby helping a company achieve ␣

B. dominating depth in some competitively valuable area

Sharing and transferring resources and capabilities across borders may also contribute to the development of broader or deeper competencies and capabilities, thereby helping a company achieve: A. control over its resource capabilities. B. dominating depth in some competitively valuable area C. intensity of resource diversification. D. precision and compliance in resource agility and responsiveness E. direct investments in foreign countries.

B. dominating depth in some competitively valuable area

A rival's strategic moves and countermoves are both: A. indicators and a strategic sign for the visualization of strategic mapping techniques. B. enabled and constrained by the set of capabilities they have at hand and thus serve as a strong signal of future strategic actions. C. measured by the extent to which they can unveil strategic and financial objectives. D. responses to the broader definition of the industry opportunities. E. All of these.

B. enabled and constrained by the set of capabilities they have at hand and thus serve as a strong signal of future strategic actions.

Vertical integration can lower costs by: A. expanding supplier power. B. facilitating the coordination of production flows and avoiding bottlenecks. C. establishing the framework for operating. D. creating control factors across the value chain. E. accommodating shifting buyer preferences.

B. facilitating the coordination of production flows and avoiding bottlenecks.

A broad differentiation strategy generally produces the best results in situations where: A. buyer brand loyalty is low. B. few rival firms are following a similar differentiation approach. C. new and improved products are introduced only infrequently. D. most rivals are pursuing a differentiation strategy and are seeking to differentiate their products on most of the same features and attributes. E. perceived value of a product is not of great importance.

B. few rival firms are following a similar differentiation approach.

Mergers and acquisitions: A. are nearly always successful in achieving their desired purpose. B. frequently do not produce the hoped-for outcomes. C. are generally less effective than forming alliances or partnerships with these same companies. D. are highly risky because of the financial drain that comes from using the company's cash resources to pay for the costs of the merger or acquisition. E. are usually more successful in achieving cost reductions than in expanding a company's market opportunities.

B. frequently do not produce the hoped-for outcomes.

Information regarding the four components of the framework for Competitor Analysis can NOT: A. be gleaned from company press releases. B. gathered from rivals internal proprietary strategic information. C. assembled from website data (especially management reports and presentations given to financial analysts). D. observed from public information (especially annual reports and 10K financial reports). E. garnered from competitive intelligent departments assigned the task to monitor rivals.

B. gathered from rivals internal proprietary strategic information.

An industry's driving forces A. are generally determined by competitive pressures, the sizes of strategic groups, and the power of rival firms' competitive strategies. B. generally act in ways that will strengthen or weaken market demand, make competition more or less intense, and lead to higher or lower industry profitability. C. frequently cause a leveling off of industry growth and a reduction in the bargaining power of buyers. D. are normally triggered by ups and downs in the economy, higher or lower inflation rates, higher or lower interest rates, or important new strategic alliances. E. can be triggered by such factors as growing competitive pressures from substitute products, greater seller-supplier collaboration, and the efforts of rival firms to employ new or different offensive strategies.

B. generally act in ways that will strengthen or weaken market demand, make competition more or less intense, and lead to higher or lower industry profitability.

Evaluating the industry's driving forces, as a whole, requires understanding their influence on the attractiveness of industry environment and: A. generally are determined by the sizes of strategic groups and the power of rival firms' competitive strategies. B. generally are defined in ways that will strengthen or weaken market demand, competition, and industry profitability in future years. C. frequently cause a reduction in the bargaining power of buyers. D. normally are triggered by movement in the economy, higher or lower interest rates, or important new strategic alliances. E. can be triggered by such factors as growing competitive pressures from substitute products, and the efforts of rival firms to employ new or different offensive strategies.

B. generally are defined in ways that will strengthen or weaken market demand, competition, and industry profitability in future years.

A company's biggest vulnerability in employing a best-cost provider strategy is: A. relying too heavily on outsourcing. B. getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies. C. getting trapped in a price war with low-cost leaders. D. being timid in cutting its prices far enough below high-end differentiators to win away many of their customers. E. not having a sustainable distinctive competence in cost reduction.

B. getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.

58. Which of the following are NOT generic strategy options for competing in foreign markets? ␣ ␣

C. Cross-border transfer strategies and home-field advantage strategies.

Best Cost Provider Strategy:

is a hybrid of a low-cost provider and differentiation strategies that aim at providing desired quality/features/performance/service attributes while beating rivals on price.

A "think-local, act local" multidomestic strategy entails: A. offering a narrow product line aimed at serving buyers in the same segments of country markets worldwide. B. giving local managers considerable strategy-making latitude and often producing different product versions for different countries. C. adopting aggressive efforts to locate facilities in those country markets that have superior resources. D. pursuing strong product differentiation and competing in many buyer segments. E. extensive efforts to transfer a company's competencies and resource strengths from one country to another so as to keep entry costs into new country markets low.

B. giving local managers considerable strategy-making latitude and often producing different product versions for different countries.

Identifying the strategic issues and problems that merit front-burner managerial attention: A. is accomplished solely by analyzing the company's internal working environment. B. helps set management's agenda for taking actions to improve the company's performance and business outlook. C. is done solely by evaluating the company's own internal situation—its resources and competitive position—to help come up with a "worry list" of "how to...," "whether to...," and "what to do about..." D. is done solely as a basis for drawing conclusions about whether to stick with a company's present strategy or to modify it. E. is accomplished solely by analyzing the company's external environment.

B. helps set management's agenda for taking actions to improve the company's performance and business outlook.

The big risk of employing an outsourcing strategy is: A. causing the company to become partially integrated instead of being fully integrated. B. hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success. C. hurting a company's R&D capability. D. putting the company in the position of being a late mover instead of an early mover. E. increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain.

B. hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.

The competitive power of a company's core competence or distinctive competence depends on A. whether it helps differentiate a company's product offering from the product offerings of rival firms. B. how hard it is to copy and how easily it can be trumped by substitute resource strengths and competitive capabilities of rivals. C. whether customers are aware of the competence and view the competence positively enough to boost the company's brand name reputation. D. whether the competence is one of the industry's key success factors. E. whether the competence is technology-based or based on superior marketing know-how.

B. how hard it is to copy and how easily it can be trumped by substitute resource strengths and competitive capabilities of rivals.

14. The diamond framework can be used to reveal the answers to all of the following that are important for competing on an international basis EXCEPT: ␣

B. how to formulate an exit strategy to push foreign competitors out of the market on the basis of competing strengths.

The diamond framework can be used to reveal the answers to all of the following that are important for competing on an international basis EXCEPT: A. where foreign entrants into an industry are most likely to come from. B. how to formulate an exit strategy to push foreign competitors out of the market. C. which countries' foreign rivals are likely to be the weakest. D. how managers can decide which foreign markets to enter first. E. where to locate different value chain activities so they are the most beneficial.

B. how to formulate an exit strategy to push foreign competitors out of the market.

The most difficult part of benchmarking is A. the decision of whether to do it at all. B. how to gain access to information regarding rivals practices and costs. C. when to initiate the process. D. what information to utilize in the analysis process. E. when to stop the process and move forward with strategy.

B. how to gain access to information regarding rivals practices and costs.

The most difficult part of benchmarking is: A. the decision of whether to do it at all. B. how to gain access to information regarding rivals' practices and costs. C. when to initiate the process. D. what information to utilize in the analysis process. E. when to stop the process and move forward with strategy.

B. how to gain access to information regarding rivals' practices and costs.

A route to take in developing a differentiation advantage includes: A. incorporating product attributes and user features that raise the buyer's overall costs, but keep the price minimal. B. incorporating tangible features that add functionality, increase customer satisfaction with the product specifications, functions, and styling. C. signaling value by targeting sophisticated buyers. D. incorporating intangible features that enhance buyer satisfaction in economic ways. E. emphasizing high quality and performance of products through a standard and simple, no-fuss packaging.

B. incorporating tangible features that add functionality, increase customer satisfaction with the product specifications, functions, and styling.

Profit sanctuaries are found to differ by a company's strategy, such that a(n): A. domestic-only company has access to many profit sanctuary locations worldwide. B. international competitor usually has a profit sanctuary in its home market and may have other sanctuaries in countries where it has a strong position and market share. C. globally competitive company generally has a profit sanctuary outside its home market in countries where it is a market leader and enjoys a strong competitive position. D. transnational company has profit sanctuaries in every country where it operates. E. company competing in a few country markets has more profit sanctuaries.

B. international competitor usually has a profit sanctuary in its home market and may have other sanctuaries in countries where it has a strong position and market share.

23. A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets across the world:

B. is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported.

A government oil company is having trouble with the private refineries and transporters to whom it delegates important stages of production. It decides to become more active along the entire supply chain from locating deposits to retailing the fuel to consumers. Which of the following does it intend to achieve? A. Outsourcing B. Economies of scale C. Increase inputs D. Advanced production technology E. Vertical integration

E. Vertical integration

A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets across the world: A. is competitively disadvantaged when the U.S. dollar declines in value against the Brazilian real. B. is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C. becomes less competitive in foreign markets when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. D. is competitively advantaged when the U.S. dollar appreciates in value against the Brazilian real. E. is unaffected by changes in the valuation of foreign currencies against the Brazilian real—all that matters to a U.S. company is the valuation of the U.S. dollar against the Brazilian real.

B. is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported.

Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because: A. it identifies who the industry's current market share leaders are. B. it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals. C. good scouting reports help identify which rival is in which strategic group. D. it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes. E. it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

B. it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals.

Having good competitive intelligence about rivals' strategies, latest actions and announcements, resource strengths and weaknesses, and moves to improve their situation is important because A. it identifies who the industry's current market share leaders are. B. it helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves. C. good scouting reports help identify which rival is in which strategic group. D. it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes. E. it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

B. it helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves.

43. The big problem a franchisor faces is: ␣ ␣

B. maintaining quality control due to a lack of commitment to consistency and standardization

The big problem a franchisor faces is: A. allowing franchisees to achieve scale economies. B. maintaining quality control due to a lack of commitment to consistency and standardization. C. eliminating the costs and risks associated with establishing a foreign business location. D. sharing foreign facilities and marketing strategies with local businesses. E. achieving higher product quality and better product performance than with an export strategy.

B. maintaining quality control due to a lack of commitment to consistency and standardization.

A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by: A. underpricing rivals and attracting quality-sensitive buyers in great enough numbers. B. maintaining the present price, and using the lower-cost edge to earn a higher profit margin on each unit sold. C. going all out to use its cost advantage to capture a dominant share of the market. D. spending heavily on advertising to promote its cost advantage to build strong customer loyalty. E. out-producing rivals and thus having more available units for sale.

B. maintaining the present price, and using the lower-cost edge to earn a higher profit margin on each unit sold.

Merger and acquisition strategies: A. are nearly always superior alternatives to forming alliances or partnerships with these same companies. B. may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry. C. are a particularly effective way of pursuing a blue-ocean strategy and an outsourcing strategy. D. seldom are superior alternatives to forming alliances with these same companies because of the financial drain of using the company's cash resources to accomplish the merger or acquisition. E. are one of the best ways for helping a company strongly differentiate its product offering and use a differentiation strategy to strengthen its market position.

B. may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.

37. The advantages of using an export strategy to build a customer base in foreign markets include: ␣ ␣

B. minimizing its risk and direct investments requirements.

10. The lower the price of product substitutes, the higher their quality and performance and the lower the user's switching costs, the A. harder it is for the sellers of attractive substitutes to lure buyers to their offering. B. more intense the competitive pressures posed by substitute products. C. less intense the competitive pressures posed by substitute products. D. greater rival sellers experience strong bargaining power from both suppliers and influential customers. E. less rival sellers experience weak bargaining power from both suppliers and influential customers.

B. more intense the competitive pressures posed by substitute products.

The lower the price of product substitutes, the higher their quality and performance and the lower the user's switching costs, the A. harder it is for the sellers of attractive substitutes to lure buyers to their offering. B. more intense the competitive pressures posed by substitute products. C. less intense the competitive pressures posed by substitute products. D. greater rival sellers experience strong bargaining power from both suppliers and influential customers. E. less rival sellers experience weak bargaining power from both suppliers and influential customers.

B. more intense the competitive pressures posed by substitute products.

Which of the following is NOT one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits? A. Picking a good partner B. Recognizing that the alliance must benefit both sides C. Minimizing the amount of resources that the partners commit to the alliance D. Ensuring that both parties live up to their commitments E. Structuring the decision-making process so actions can be taken swiftly when needed

C. Minimizing the amount of resources that the partners commit to the alliance

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company: A. must first be a proficient manufacturer. B. must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality. C. must have excess production capacity so that it has an ample in-house ability to undertake additional production activities. D. needs to have a wide product line, so it can supply parts and components for many products. E. should have a distinctive competence in production process technology and at least a core competence in manufacturing R&D.

B. must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality.

Outsourcing strategies can offer such advantages as: A. increasing a company's ability to strongly differentiate its product and be successful with either a broad differentiation strategy or a focused differentiation strategy. B. obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure. C. speeding a company's entry into foreign markets. D. permitting greater use of strategic alliances and collaborative partnerships. E. giving a firm more direct control over the costs of value chain activities.

B. obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.

A company's competitive strength scores pinpoint its strengths and weaknesses against rivals and: A. suggest the company use its strengths to exploit its own competitive liabilities. B. point directly to the kinds of offensive/defensive actions it can use to exploit its competitive strengths and reduce its competitive liabilities. C. point directly to the company to use its weaknesses as offensive moves to challenge rivals' weaknesses. D. suggest receptivity for astute companies to drive their operating practices if the strength scores are very low. E. point directly to accepting the competitive strength scores on face value.

B. point directly to the kinds of offensive/defensive actions it can use to exploit its competitive strengths and reduce its competitive liabilities.

The risks of a focused strategy based on either low-cost or differentiation include the: A. chance that niche customers will bargain more aggressively for good deals than customers in the overall marketplace. B. potential for the preferences and needs of niche members to shift over time toward product attributes desired by buyers in the mainstream portion of the market. C. potential for the segment to be highly vulnerable to economic cycles. D. potential for segment growth to race beyond the production or service capabilities of incumbent firms. E. potential for the segment to become too specialized for other multi-segmented rivals to enter.

B. potential for the preferences and needs of niche members to shift over time toward product attributes desired by buyers in the mainstream portion of the market.

Quantitative measures of a company's competitive strength A. signal which competitor has the most distinctive competencies and which competitor has the fewest. B. provide useful indicators of how a company compares against key rivals, factor by factor and capability by capability—thus indicating whether the company has a net overall competitive advantage or disadvantage against each rival. C. reveal which competitors are in the best and worst strategic groups. D. show which industry rival has the best overall market opportunities and which competitor has the poorest market opportunities. E. pinpoint which industry rival is subject to the least amount of competitive pressures from the five competitive forces.

B. provide useful indicators of how a company compares against key rivals, factor by factor and capability by capability—thus indicating whether the company has a net overall competitive advantage or disadvantage against each rival.

Quantitative measures of a company's competitive strength: A. signal which competitor has the most distinctive competencies and which competitor has the fewest. B. provide useful indicators of how a company compares against key rivals, factor by factor and capability by capability—thus indicating whether the company has a net overall competitive advantage or disadvantage against each rival. C. reveal which competitors are in the best and worst strategic groups. D. show which industry rival has the best overall market opportunities and which competitor has the poorest market opportunities. E. pinpoint which industry rival is subject to the least amount of competitive pressures from the five competitive forces.

B. provide useful indicators of how a company compares against key rivals, factor by factor and capability by capability—thus indicating whether the company has a net overall competitive advantage or disadvantage against each rival.

Doing a competitive strength assessment entails A. determining whether a company has a cost-effective value chain. B. ranking the company against major rivals on each of the important factors that determine market success and ascertaining whether the company has a net competitive advantage or disadvantage versus major rivals. C. identifying a company's core competencies and distinctive competencies (if any). D. analyzing whether a company is well positioned to gain market share and be the industry's profit leader. E. developing quantitative measures of a company's chances for future profitability.

B. ranking the company against major rivals on each of the important factors that determine market success and ascertaining whether the company has a net competitive advantage or disadvantage versus major rivals.

Factors that cause the rivalry among competing sellers to be weak include A. low buyer switching costs and rival sellers that are relatively equal in size and capability. B. rapid growth in buyer demand and high buyer switching costs. C. a recent acquisition of a weak rivals by an industry outsider with the intent of turning the acquisition into a major contender. D. low barriers to entry and weakly differentiated products among rival sellers. E. slow growth in buyer demand and strongly differentiated products.

B. rapid growth in buyer demand and high buyer switching costs.

Factors that cause the rivalry among competing sellers to be weaker include: A. low buyer switching costs and rival sellers that are relatively equal in size and capability. B. rapid growth in buyer demand and high buyer switching costs. C. few industry rivals, causing any one company's actions to be easily anticipated and countered by its rivals. D. low barriers to entry and weakly differentiated products among rival sellers. E. slow growth in buyer demand and strongly differentiated products.

B. rapid growth in buyer demand and high buyer switching costs.

Factors that tend to result in weak rivalry among competing sellers include: A. less costly buyer switching costs and when low exit-barriers exist keep unprofitable firms from leaving the industry. B. rapid growth in buyer demand, high buyer costs to switch brands, and more strongly differentiated products. C. less strongly differentiated products among rival sellers. D. rivals that are quite diverse in terms of their strategies, objectives, and countries of origin. E. conditions where outsiders have recently acquired weak competitors and are challenged in migrating them into major contenders.

B. rapid growth in buyer demand, high buyer costs to switch brands, and more strongly differentiated products.

105.Companies that compete internationally are able to benefit from coordinating activities across different countries domains by: ␣

B. redirecting shipments to higher sales demand areas.

A company's strengths are important because they: A. pave the way for establishing a low-cost advantage over rivals. B. represent the quality of its competitive assets that enhance its competitiveness in the marketplace. C. provide extra muscle in helping lengthen the company's value chain. D. give it competitive protection against the industry's driving forces. E. provide extra organizational muscle in turning a core competence into a key success factor.

B. represent the quality of its competitive assets that enhance its competitiveness in the marketplace.

For a best-cost provider strategy to be successful, a company must have: A. excellent marketing and sales skills in convincing buyers to pay a premium price for the attributes/features incorporated in its product. B. resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes. C. access to greater learning/experience curve effects and scale economies than rivals. D. one of the best-known and most respected brand names in the industry. E. a short, low-cost value chain.

B. resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes.

A company's strategy is increasingly effective the more it can match the company strategy to competitive conditions, so the firm can: A. pursue avenues that expose the firm to as many of the different competitive pressures as possible. B. shift the competitive battle in favor of the firm by altering the underlying factors driving the five forces. C. pursue ways to identify and complement the five forces contradictions and inferences to attract competitive growth opportunities. D. pursue avenues that promote strategic thinking about how to contest competitor strengths and weaknesses and to create a checklist of potential profitability preferences. E. None of these.

B. shift the competitive battle in favor of the firm by altering the underlying factors driving the five forces.

SWOT analysis is a powerful tool for A. gauging whether a company has a cost competitive value chain. B. sizing up a company's resource capabilities and deficiencies, its market opportunities, and the external threats to its future well-being. C. evaluating whether a company is in the most appropriate strategic group. D. determining a company's competitive strength vis-à-vis close rivals. E. identifying the market segments in which a company is strongly positioned and weakly positioned.

B. sizing up a company's resource capabilities and deficiencies, its market opportunities, and the external threats to its future well-being.

35. SWOT analysis is a simple but powerful tool for: A. gauging whether a company has a cost-competitive value chain. B. sizing up a company's resources and capabilities, strengths and deficiencies, its market opportunities, and the external threats to its future well-being. C. evaluating whether a company is in the most appropriate strategic group. D. determining a company's competitive strength vis-à-vis close rivals. E. identifying the market segments in which a company is strongly positioned and weakly positioned.

B. sizing up a company's resources and capabilities, strengths and deficiencies, its market opportunities, and the external threats to its future well-being.

SWOT analysis is a simple but powerful tool for: A. gauging whether a company has a cost-competitive value chain. B. sizing up a company's resources and capabilities, strengths and deficiencies, its market opportunities, and the external threats to its future well-being. C. evaluating whether a company is in the most appropriate strategic group. D. determining a company's competitive strength vis-à-vis close rivals. E. identifying the market segments in which a company is strongly positioned and weakly positioned.

B. sizing up a company's resources and capabilities, strengths and deficiencies, its market opportunities, and the external threats to its future well-being.

Not all buyers of an industry's product have equal degrees of bargaining power with sellers, because: A. sellers in an industry provide similar products and generally their cost structures are different because of competitive advantages in their operation. B. some sellers may be less sensitive than others to price, quality, or service differences. C. along the various stages of the value chain sellers are conducive to earning attractive profits. D. the industry is a highly cohesive structure with limited fragmentation and few industry members. E. All of these.

B. some sellers may be less sensitive than others to price, quality, or service differences.

A company that does a first-rate job of managing its value chain activities relative to competitors A. is likely to have more distinctive competencies than rivals. B. stands a good chance of achieving competitive advantage by performing its value chain activities either more proficiently or at lower cost. C. is almost certainly going to have a longer and more profitable value chain. D. usually has strong proficiencies in activity-based costing and benchmarking. E. usually has the fewest primary activities and the lowest costs in the industry.

B. stands a good chance of achieving competitive advantage by performing its value chain activities either more proficiently or at lower cost.

The concept of strategic groups is relevant to industry and competitive analysis because: A. firms in the same strategic groups are rarely close competitors—a firm's closest competitors are usually in distant strategic groups. B. strategic group maps help identify how each competing firm is positioned and the relationship to their closest competitors. C. competition grows in intensity as the number and diversity of the strategic groups in an industry increases. D. the profit potential of firms in the same strategic group is usually very similar. E. competitive pressures tend to be weaker within strategic groups than across strategic groups.

B. strategic group maps help identify how each competing firm is positioned and the relationship to their closest competitors.

The two big drivers of outsourcing are: A. an increased ability to cut R&D expenses and an increased ability to avoid the problems of strategic alliances. B. that outsiders can often perform certain activities better or more cheaply, and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies). C. a desire to reduce the company's investment in fixed assets and the need to narrow the scope of the company's in-house competencies and competitive capabilities. D. the ability to avoid capital investments that accompany vertical integration and a desire to reduce the company's risk exposure to changing technology and/or changing buyer preferences. E. that a smaller in-house workforce and a low investment in intellectual capital will produce cost savings.

B. that outsiders can often perform certain activities better or more cheaply, and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies).

21. Identifying the strategic issues a company faces and compiling a "worry list" of problems and roadblocks is an important component of company situation analysis because: A. without a precise fix on what problems/issues a company confronts, managers cannot know what the industry's key success factors are. B. the "worry list" sets the management agenda for taking actions to improve the company's performance and business outlook. C. without a precise fix on what problems/roadblocks a company confronts, managers are less clear about what value chain activities to benchmark. D. the "worry list" helps company managers clarify their thinking about how best to modify the company's value chain. E. these issues and obstacles must be cleared before management can focus clearly on what is the best strategy for the company to pursue.

B. the "worry list" sets the management agenda for taking actions to improve the company's performance and business outlook.

Identifying the strategic issues a company faces and compiling a "worry list" of problems and roadblocks is an important component of company situation analysis because A. without a precise fix on what problems/issues a company confronts, managers cannot know what the industry's key success factors are. B. the "worry list" sets the management agenda for taking actions to improve the company's performance and business outlook. C. without a precise fix on what problems/roadblocks a company confronts, managers are less clear about what value chain activities to benchmark. D. the "worry list" helps company managers clarify their thinking about how best to modify the company's value chain. E. these issues and obstacles must be cleared before management can focus clearly on what is the best strategy for the company to pursue.

B. the "worry list" sets the management agenda for taking actions to improve the company's performance and business outlook.

The most powerful of the five competitive forces is usually A. the competitive pressures that stem from the ready availability of attractively priced substitute products. B. the competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage. C. the benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates. D. the competitive pressures associated with the potential entry of new competitors. E. the bargaining power and leverage that large customers are able to exercise.

B. the competitive pressures associated with rivalry among competing sellers in the industry for buyer patronage.

The most powerful of the five competitive forces is USUALLY: A. the competitive pressures that stem from the ready availability of attractively priced substitute products. B. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry. C. the benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates. D. the competitive pressures associated with the potential entry of new competitors. E. the bargaining power and leverage that large customers are able to exercise.

B. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.

4. The most powerful of the five competitive forces is USUALLY: A. the competitive pressures that stem from the ready availability of attractively priced substitute products. B. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry. C. the benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates. D. the competitive pressures associated with the potential entry of new competitors. E. the bargaining power and leverage that large customers are able to exercise.

B. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.

5. What makes the marketplace a competitive battlefield is: A. the race of industry members to build strong defenses against the industry's driving forces. B. the constant rivalry of firms to strengthen their standing with buyers and win a competitive edge over rivals. C. the ongoing race among rival sellers to have the highest-quality product. D. the ongoing efforts of industry members to introduce new and improved products/services at a faster rate than their rivals. E. the ongoing race among rivals to achieve the fastest rate of growth in revenues and profits.

B. the constant rivalry of firms to strengthen their standing with buyers and win a competitive edge over rivals.

What makes the marketplace a competitive battlefield is: A. the race of industry members to build strong defenses against the industry's driving forces. B. the constant rivalry of firms to strengthen their standing with buyers and win a competitive edge over rivals. C. the ongoing race among rival sellers to have the highest-quality product. D. the ongoing efforts of industry members to introduce new and improved products/services at a faster rate than their rivals. E. the ongoing race among rivals to achieve the fastest rate of growth in revenues and profits.

B. the constant rivalry of firms to strengthen their standing with buyers and win a competitive edge over rivals.

In analyzing the strength of competition among rival firms, an important consideration is: A. the potential for buyers to exercise strong bargaining power. B. the diversity of competitors in terms of long-term direction objectives, strategies, and countries of origin. C. the number of firms pursuing differentiation strategies versus the number pursuing low-cost leadership strategies and focus strategies. D. the extent to which some rivals have more than two competitively valuable competencies or capabilities. E .whether the industry is characterized by a strong learning/experience curve and whether the industry is composed of many or few strategic groups.

B. the diversity of competitors in terms of long-term direction objectives, strategies, and countries of origin.

Whether buyer-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of: A. the speed with which general economic conditions and interest rates are changing. B. the extent to which buyers can exercise enough bargaining power to influence the conditions of sale in their favor and whether strategic partnerships between certain industry members can adversely affect other industry members. C. how many buyers purchase all of their requirements from a single seller versus how many purchase from several sellers. D. the number of buyers versus the number of sellers. E. whether industry members are spending more or less on advertising.

B. the extent to which buyers can exercise enough bargaining power to influence the conditions of sale in their favor and whether strategic partnerships between certain industry members can adversely affect other industry members.

26. A company's resources and capabilities represent: A. the firm's net working capital and related determinants for measuring operating performance and capabilities. B. the firm's competitive assets, which are considered big determinants of its competitiveness and ability to succeed in the marketplace. C. whether the firm has the industry's most efficient value chain. D. management's source of funding of new strategic initiatives. E. All of these.

B. the firm's competitive assets, which are considered big determinants of its competitiveness and ability to succeed in the marketplace.

A company's resources and capabilities represent: A. the firm's net working capital and related determinants for measuring operating performance and capabilities. B. the firm's competitive assets, which are considered determinants of its competitiveness and ability to succeed in the marketplace. C. whether the firm has the industry's most efficient value chain. D. the management's source of funding of new strategic initiatives. E. positive trends with relevant cultural factors related to buyers' choices and product modifications

B. the firm's competitive assets, which are considered determinants of its competitiveness and ability to succeed in the marketplace.

As a rule, the stronger the collective impact of competitive pressures associated with the five competitive forces, A. the stronger are the industry's driving forces. B. the lower the combined profitability of industry members. C. the fewer companies that can achieve a competitive advantage via anything other than being the industry's low-cost leader. D. the larger the number of competitive advantage opportunities for industry members. E. the greater the number of industry key success factors.

B. the lower the combined profitability of industry members.

As a rule, the stronger the collective impact of competitive pressures associated with the five competitive forces, A. the stronger are the industry's driving forces. B. the lower the combined profitability of industry members. C. the fewer companies that can achieve a competitive advantage via anything other than being the industry's low-cost leader. D. the larger the number of competitive advantage opportunities for industry members. E. the greater the number of industry key success factors.

B. the lower the combined profitability of industry members.

76. A global strategy allows for: ␣ ␣

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

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

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

18. Cross-country variations in government policies and economic conditions affect: ␣ ␣

B. the opportunities available to foreign entrants and the risks of operating within that country.

45. A company's value chain identifies: A. the steps it goes through to convert its net income into value for shareholders. B. the primary activities and related support activities it performs in creating customer value. C. the series of steps it takes to get a product from the raw materials stage into the hands of end users. D. the activities it performs in transforming its competencies into distinctive competencies. E. the competencies and competitive capabilities that underpin its efforts to create value for customers and shareholders.

B. the primary activities and related support activities it performs in creating customer value.

A company's value chain identifies A. the steps it goes through to convert its net income into value for shareholders. B. the primary activities it performs in creating value for its customers and the related support activities. C. the series of steps it takes to get a product from the raw materials stage into the hands of end-users. D. the activities it performs in transforming its competencies into distinctive competencies. E. the competencies and competitive capabilities that underpin its efforts to create value for customers and shareholders.

B. the primary activities it performs in creating value for its customers and the related support activities.

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 serving the needs of buyers in 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 least money.

B. their concentrated attention on serving the needs of buyers in a narrow piece of the overall market.

A company's resource strengths are important because A. they pave the way for establishing a low-cost advantage over rivals. B. they represent its competitive assets and are big determinants of its competitiveness and ability to succeed in the marketplace. C. they provide extra muscle in helping lengthen the company's value chain. D. they give it competitive protection against the industry's driving forces. E. they provide extra organizational muscle in turning a core competence into a key success factor.

B. they represent its competitive assets and are big determinants of its competitiveness and ability to succeed in the marketplace.

Companies that compete on an international basis have a competitive advantage over their purely domestic rivals: A. to achieve a larger domestic interest by developing sufficient resource strengths and competitive capabilities for success. B. to benefit from coordinating activities across different countries' domains. C. solely for the benefit of their shareholders. D. that guarantees the generation of big profits, big returns on investment, and big cash surpluses after dividends are paid. E. to give full access to the proprietary technological expertise or other competitively valuable capabilities.

B. to benefit from coordinating activities across different countries' domains.

The marketing emphasis of a company pursuing a broad differentiation strategy usually is to: A. under-price rival brands with comparable features. B. tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features. C. out-advertise rivals and make frequent use of discount coupons. D. emphasize selling directly to end-users and promoting personalized customer service. E. communicate the product's ability to serve the customer's every need.

B. tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features.

A resource analysis A. is often based on cross-department combinations of intellectual capital and expertise. B. uses a company's valuable and rare resource strengths 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. uses a company's valuable and rare resource strengths and competitive capabilities to deliver value to customers that rivals have difficulty matching.

The extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system is known as: A. horizontal scale. B. vertical scope. C. outsourcing scope. D. cooperative scaled scope. E. focal scope.

B. vertical scope.

While there are many routes to competitive advantage, the two biggest factors that distinguish one competitive strategy from another are: A. whether a company can build a brand name and an image that buyers trust. B. whether a company's target market is broad or narrow and whether the company is pursuing a low cost or differentiation strategy. C. whether a company can achieve lower costs than rivals and whether the company is pursuing the industry's sales and market share leader's role. D. whether a company can offer the lowest possible prices and whether the company can get the best suppliers in the market. E. whether a company's overall costs are lower than competitors' and whether the company can achieve strong product differentiation.

B. whether a company's target market is broad or narrow and whether the company is pursuing a low cost or differentiation strategy.

Just how strong the competitive pressures are from substitute products depends on A. whether the available substitutes are strongly or weakly differentiated and whether buyers make purchases frequently or infrequently. B. whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes. C. whether the available substitutes are products or services. D. whether the producers of substitutes have ample budgets for new product R&D. E. the speed with which buyer needs and expectations are changing.

B. whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes.

Just how strong the competitive pressures are from substitute products depends on: A. whether the substitutes are strongly or weakly differentiated and whether the relative frequency of buyer purchases is high or low. B. whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes. C. whether the available substitutes are products or services. D. whether the producers of substitutes have ample budgets for new product R&D. E. the speed with which buyer needs and expectations are changing.

B. whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes.

44. One of the most telling signs of whether a company's market position is strong or precarious is: A. whether its product is strongly or weakly differentiated from rivals. B. whether its prices and costs are competitive with those of key rivals. C. whether it has a lower stock price than key rivals. D. the opinions of buyers regarding which seller has the best product quality and customer service. E. whether it is in a bigger or smaller strategic group than its closest rivals.

B. whether its prices and costs are competitive with those of key rivals.

One of the most telling signs of whether a company's market position is strong or precarious is A. whether its product is strongly or weakly differentiated from rivals. B. whether its prices and costs are competitive with those of key rivals. C. whether it has a lower stock price than key rivals. D. the opinions of buyers regarding which seller has the best product quality and customer service. E. whether it is in a bigger or smaller strategic group than its closest rivals.

B. whether its prices and costs are competitive with those of key rivals.

One of the most telling signs of whether a company's market position is strong or precarious is: A. whether its product is strongly or weakly differentiated from rivals. B. whether its prices and costs are competitive with those of key rivals. C. whether it has a lower stock price than key rivals. D. the opinions of buyers regarding which seller has the best product quality and customer service. E. whether it is in a bigger or smaller strategic group than its closest rivals.

B. whether its prices and costs are competitive with those of key rivals.

68. When a company operates in the markets of two or more different countries, its foremost strategic issue is

B. whether to vary the company's competitive approach to fit specific market conditions and buyer . preferences in each host country or whether to employ essentially the same strategy in all countries.

60. Multidomestic competition refers to situations where: ␣ ␣

B..competition in one national market is independent of competition in other national markets, and as a . consequence, there is—strictly speaking—no "international or world market."

Which of the following is NOT a reason why crafting a strategy to compete in one or more foreign markets is inherently complex? A. Because factors that affect industry competitiveness vary from country to country. B. Because of the potential for location-based advantages to conducting value chain activities in certain countries. C. Because different government policies and economic conditions make the business climate more favorable in some countries than others. D. Because of the risks for shifts in currency exchange rates. E. Because similarities in buyer tastes and preferences creates challenges in standardizing products and services.

Because similarities in buyer tastes and preferences creates challenges in standardizing products and services.

Which of the following is NOT a principal offensive strategy option?

Being the final competitor to market a next-generation product so as to guarantee the product is operationally sound.

C) putting a firm in position to win the business of price sensitive customers, set the floor on market price,

Being the overall low-cost provider in an industry has the attractive advantage of A) building strong customer loyalty and locking customers into its product (because customers have such high switching costs). B) giving the firm a very appealing brand image. C) putting a firm in position to win the business of price sensitive customers, set the floor on market price, and still earn a profit. D) putting the company in strong position to be more profitable than companies pursuing a differentiation strategy. E) greatly reducing the strong bargaining power of key suppliers.

Which of the following is not an analytical tool for revealing a company's competitiveness and for helping to match the strategy to the company's own particular circumstances?

Bench-pressing analysis

A company's realized strategy is made up of

Both deliberate/planned initiatives that have proven themselves in the marketplace and newly launched initiatives aimed at further boosting performance and emergent/reactive adjustments to unanticipated strategic moves by rivals, unexpected changes in customer preferences, and new market opportunities.

A) there are many ways to differentiate the product or service and many buyers perceive these differences

Broad differentiation strategies are well-suited for market circumstances where A) there are many ways to differentiate the product or service and many buyers perceive these differences as having value. B) most buyers have the same needs and use the product in the same ways. C) buyers are susceptible to clever advertising. D) barriers to entry are high and suppliers have a low degree of bargaining power. E) price competition is especially vigorous.

A) buyer needs and preferences are too diverse to be fully satisfied by a standardized product.

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 the same 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.

Winning a sustainable competitive edge over competitors does NOT hinge on which of the following?

Building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost

Buyers are in position to exert strong bargaining power in dealing with sellers when:

Buyers are price-sensitive due to the product representing a significant fraction of their purchases.

Which one of the following is NOT one of the ways a company can strive to gain competitive advantage (or offset domestic disadvantages) by expanding into foreign markets? A. By competing in both developed and emerging country markets and/or by selling direct to foreign buyers via the company's website. B. By dispersing its activities among various countries in a manner that lowers costs. C. By transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets. D. By dispersing its activities among various countries in a manner that helps achieve greater product differentiation and/or working to deepen/broaden its resource strengths and capabilities. E. By using cross-border coordination of its strategic moves in ways that a domestic-only competitor cannot.

By competing in both developed and emerging country markets and/or by selling direct to foreign buyers via the company's website.

17. When can companies gain competitive advantage over those rivals with plants in countries where costs are high? ␣

C When companies can build production facilities in low-cost countries (or source their products from . contractmanufacturersinthesecountries).

Competitive pressures associated with the threat of new entrants grow stronger when A) buyer demand is growing slowly and the pool of entry candidates is small. B) the number of customers for the industry's product is large and the product offerings of rival sellers are strongly differentiated. C) Existing industry members are looking to expand their market reach by entering product segments or geographic areas where they do not have a presence yet. D) there are not many competitors already in the industry, their products are highly differentiated, and buyers are brand loyal. E) a small percentage of companies in the industry are currently earning above-average profits, entry barriers are high, and buyers are not brand loyal.

C) Existing industry members are looking to expand their market reach by entering product segments or geographic areas where they do not have a presence yet.

Which one of the following is not helpful in identifying the components of a single-business company's strategy? A) Initiatives to build competitive advantage B) Efforts to expand or narrow geographic coverage C) The company's resource strengths and weaknesses D) The company's key functional strategies E) Efforts to build competitively valuable partnerships and strategic alliances with other enterprises within its industry

C) The company's resource strengths and weaknesses

Which of the following is not among the most common types of driving forces? A) Product innovation, marketing innovation, increasing globalization of the industry, and reductions in uncertainty and business risk B) Changes in the long-term industry growth rate, changes in who buys the product and how they use it, and growing buyer preferences for differentiated products C) Ups and downs in interest rates, changes in the number of seller-supplier collaborative alliances, and changes in overall industry profitability D) Emerging new Internet applications and capabilities, technological change, and the diffusion of technical know-how across more companies and more countries E) Changes in cost and efficiency, the entry or exit of major firms, and changing societal concerns, attitudes, and lifestyles

C) Ups and downs in interest rates, changes in the number of seller-supplier collaborative alliances, and changes in overall industry profitability

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) 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) Value chain analysis and benchmarking.

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) is a potent tool for improving a company's own internal activities that is based on learning how other companies perform them and borrowing "best practices". D) loses much of its managerial usefulness if it is done with the aid of third-party organizations who insist on protecting the confidentiality of individual company data; moreover, benchmarking is not used very often by companies because of "borderline" ethical considerations and because most of the time the information and data used in doing benchmarking studies has turned out to be unreliable and untrustworthy. E) entails calculating the costs of performing each of the primary and related support activities in a company's value chain.

C) is a potent tool for improving a company's own internal activities that is based on learning how other companies perform them and borrowing "best practices".

A core competence A) is a more durable company resource than a "distinctive competence." B) usually resides in a company's technology and physical assets (state-of-the-art plants and equipment, attractive real estate locations, modern distribution facilities, and so on) whereas a company competence usually resides in a company's human assets. C) may evolve into a distinctive competence, giving the company superiority over rivals in performing an important value chain activity D) is usually tied closely to the caliber of a company's manufacturing capability and/or its proprietary technology and know-how. E) is better suited to helping a company defend against external threats than in pursuing external market opportunities.

C) may evolve into a distinctive competence, giving the company superiority over rivals in performing an important value chain activity

Factors that cause the rivalry among competing sellers to be weak include: A) low buyer switching costs. B) slow growth in buyer demand. C) strong buyer loyalty, rapid growth in buyer demand, and so many industry rivals that any one company's actions have little impact on the businesses of its rivals. D) standardized or else weakly differentiated products among rival sellers. E) the presence of one or more rivals that are dissatisfied with their current position and market share.

C) strong buyer loyalty, rapid growth in buyer demand, and so many industry rivals that any one company's actions have little impact on the businesses of its rivals.

As a rule, the stronger the collective impact of the five competitive forces, A) the more strategic groups there are in an industry. B) the lower the number of industry key success factors. C) the lower the combined profitability of industry participants and the more "competitively unattractive" is the industry environment. D) the weaker the industry's driving forces. E) the higher the barriers to entry and the less likely it is that industry members will make fresh strategic moves very frequently.

C) the lower the combined profitability of industry participants and the more "competitively unattractive" is the industry environment.

Easy DriveIn, a fast food facility, offers products at lower prices than its competitors in the market and has a drive-through-only operation with no indoor seating. What strategy is Easy DriveIn using to gain competitive advantage? A. A low-cost provider strategy B. A broad differentiation strategy C. A focused low-cost strategy D. A focused differentiation strategy E. A best-cost provider strategy

C. A focused low-cost strategy

Which of the following is NOT a frequently used strategic approach to set a company apart from rivals and achieve a sustainable competitive advantage? A. Striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage B. Outcompeting rivals on the basis of differentiating features such as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority, or unusually good value for the money C. Focusing on a broad buyer segment and offering buyers a very low cost and highly customized attributes that meet their specialized needs better than rivals' products D. Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of satisfying the needs and tastes of buyers comprising the niche E. Developing a cost advantage based on offering more value for the money

C. Focusing on a broad buyer segment and offering buyers a very low cost and highly customized attributes that meet their specialized needs better than rivals' products

Adapting to new conditions like new innovations by competitors, fast-changing technological developments, and constantly evaluating what is working result in: A. an assured profitability strategy. B. a broad market entry strategy. C. an emergent strategy. D. unlimited revenue generation. E. a proactive strategy.

C. an emergent strategy.

Which of the following is defined as a formal agreement between two or more separate companies in which they agree to work cooperatively toward some common objective? A. Joint venture B. Vertical integration C. Strategic alliance D. Forward integration E. Outsourcing

C. Strategic alliance

Crafting a deliberate strategy involves developing strategy elements that: A. imitate as much of the market leader's strategy as possible so as not to end up at a competitive disadvantage. B. comprise a five-year strategic plan that is then fine-tuned during the remainder of the plan period; big changes in strategy are thus made only once every five years. C. consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods. D. deliberately eliminate the ongoing strategic elements and implement new planned initiatives. E. consist of adaptive change plans to new market situations along with abandoned redundant ongoing elements.

C. consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods.

A company's strategy and its quest for competitive advantage are tightly connected because: A. without a competitive advantage a company cannot become the industry leader. B. without a competitive advantage a company cannot have a profitable business model. C. crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance. D. a competitive advantage is what enables a company to achieve its strategic objectives. E. how a company goes about trying to please customers and outcompete rivals is what enables senior managers to choose an appropriate strategic vision for the company.

C. crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance.

A winning strategy is one that: A. builds strategic fit, is socially responsible, and maximizes shareholder wealth. B. is highly profitable and boosts the company's market share. C. fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance. D. results in a company becoming the dominant industry leader. E. can pass the ethical standards test, the strategic intent test, and the profitability test.

C. fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance.

A creative and distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage: A. is a reliable indicator that the company has a socially responsible business model. B. is achievable in emerging but not mature industries. C. is a company's most reliable ticket to above-average profitability. D. signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives. E. is the best indicator that the company's strategy and business model are well-matched and properly synchronized.

C. is a company's most reliable ticket to above-average profitability.

Crafting and executing a strategy is a top-priority managerial task because: A. it helps management create tight fits between a company's strategic vision and business model. B. it allows all company personnel, and especially senior executives, to know the answer to "who are we, what do we do, and where are we headed?" C. it is management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance. D. it provides clear guidance as to what the company's business model and strategic intent are, and helps keep managerial decision-making from being rudderless. E. it establishes how well executives perform these tasks and are the key determinants of executive compensation.

C. it is management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance.

A company's strategy stands a better chance of succeeding when: A. it is developed through a collaborative process involving all managers and staff from all levels of the organization. B. managers employ conservative strategic moves based on past experience and form an underlying basis of control. C. it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals. D. managers copy the strategic moves of successful companies in its industry. E. managers focus on meeting or beating shareholder expectations.

C. it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.

Which of the following is LIKELY to be viewed as a pro-business government policy from the perspective of companies competing on an international basis? A. Argentina increases its interest rate on loans to foreign entrants from 15% to 19%. B. The European Union imposes a 16% tariff on the import of agricultural produce. C. Australia introduces a permanent employer-sponsored visa program for skilled manpower. D. Denmark levies a per metric ton carbon tax on electricity. E. The Chinese government favors partial local ownership of foreign-owned companies.

C. Australia introduces a permanent employer-sponsored visa program for skilled manpower.

Which of the following do NOT qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions? A. Changes in who buys the product and how they use it, and changes in the long-term industry growth rate B. Changes brought about by the entry or exit of major firms, product innovation, and marketing innovation and cost efficiency. C. Changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration D. Changes in buyer preferences for differentiated products instead of mostly standardized or identical products E. Changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilities

C. Changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration

Which of the following is NOT a good example of a substitute product that triggers stronger competitive pressures? A. A salad as a substitute for French fries B. Wireless phones as a substitute for wired telephones C. Coca-Cola as a substitute for Pepsi D. Snowboards as a substitute for snow skis E. Video-on-demand services from a cable TV company as a substitute for going to the movies

C. Coca-Cola as a substitute for Pepsi

Which of the following is not a good example of a substitute product that triggers stronger competitive pressures? A. Artificial sweetener as a substitute for sugar B. Wireless phone service as a substitute for a landline telephone C. Coca-Cola as a substitute for Pepsi D. Digital cameras as substitutes for film cameras E. Video-on-demand services as a substitute for renting movies from a movie rental store

C. Coca-Cola as a substitute for Pepsi

Which of the following ways are employed by defending companies to fend off a competitive attack? A. Remain steadfast to current product features and models to ensure resources are not diverted toward unproductive efforts. B. Exclude volume discounts or better financing terms from the strategic response in order to maintain current profitability levels. C. Gain product line exclusivity to force competitors to use other distributors. D. Trimming the length of warranties to save money. E. Stay away from competitor's clients since their loyalty will not allow them to switch.

C. Gain product line exclusivity to force competitors to use other distributors.

Which of the following is typically the strategic impetus for forward vertical integration? A. Being able to control the wholesale/retail portion of the industry value chain B. Experiencing fewer disruptions in the delivery of the company's products to end users C. Gaining better access to end users and better market visibility D. Broadening the company's product line E. Allowing the firm access to greater economies of scale

C. Gaining better access to end users and better market visibility

Which of the following is NOT a good example of a company's resources? A. More intellectual capital and better e-commerce capabilities than rivals B. Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance product quality and performance C. Having higher earnings per share and a higher stock price than key rivals D. A well-known brand name and enjoying the confidence of customers E. A lower-cost value chain than rivals

C. Having higher earnings per share and a higher stock price than key rivals

Which of the following is not a good example of a company's strength? A. More intellectual capital and better e-commerce capabilities than rivals B. Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance product quality and performance C. Having higher earnings per share and a higher stock price than key rivals D. A well-known brand name and enjoying the confidence of customers E. A lower-cost value chain than rivals

C. Having higher earnings per share and a higher stock price than key rivals

Which of the following is not a relevant consideration in identifying an industry's dominant economic features? A. Market size and growth rate, the geographic scope of competitive rivalry, and demand-supply conditions B. The extent to which economies of scale and learning/experience curve effects are present C. How many strategic groups the industry has and which ones are most profitable and least profitable D. The number and sizes of buyers, the number of rivals, and the pace of product innovation E. The prevalence of vertical integration and the pace of technological change

C. How many strategic groups the industry has and which ones are most profitable and least profitable

Which of the following is NOT a good option for trying to remedy high internal costs vis-à-vis rivals' firms? A. Finding ways to detour around activities or items where costs are high B. Redesigning the product or some of its components to permit more economical manufacture or assembly C. Implementing aggressive strategic resource mapping to permit across-the-board cost reduction D. Outsourcing high-cost activities to vendors or contractors who can perform them more economically E. Relocating high-cost activities (like manufacturing) to geographic areas (like China or Latin America or Eastern Europe) where they can be performed more cheaply

C. Implementing aggressive strategic resource mapping to permit across-the-board cost reduction

Which of the following is not a good option for trying to remedy high internal costs vis-à-vis rivals firms? A. Investing in productivity-enhancing, cost-saving technological improvements B. Redesigning the product or some of its components to permit more economical manufacture or assembly C. Implementing aggressive strategic resource mapping to permit across-the-board cost reduction D. Outsourcing high-cost activities to vendors or contractors who can perform them more economically E. Relocating high-cost activities (like manufacturing) to geographic areas (like China or Latin America or Eastern Europe) where they can be performed more cheaply

C. Implementing aggressive strategic resource mapping to permit across-the-board cost reduction

Which of the following do not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions? A. Changes in who buys the product and how they use it, changes in the long-term industry growth rate, and changes in cost and efficiency B. Entry or exit of major firms, product innovation, and marketing innovation C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration D. Diffusion of technical know-how and changing societal concerns, attitudes, and lifestyles E. Changes in manufacturing processes brought on by technological change, increasing globalization of the industry, and new Internet capabilities

C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration

Which of the following do not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions? A. Changes in who buys the product and how they use it and changes in the long-term industry growth rate B. Entry or exit of major firms, product innovation, and marketing innovation C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration D. Growing buyer preferences for differentiated products instead of mostly standardized or identical products E. Changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilitie

C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration

Which of the following is NOT one of the ways that a company that a non-capital-intensive can achieve a cost advantage by revamping its value chain? A. Creating a direct sales force and bypassing activities and costs of distributors and dealers B. Conducting sales operations at the company's website C. Increasing production capacity and then striving hard to operate at full capacity D. Relocating facilities so as to curb the cost for shipping and handling activities E. Streamlining operations by eliminating low value-added or unnecessary work steps and activities

C. Increasing production capacity and then striving hard to operate at full capacity

When a company performs a particular competitively important activity truly well in comparison to its rivals, it is said to have: A. a company competence. B. a strategic resource. C. a distinctive competence. D. a core competence. E. a key success factor.

C. a distinctive competence.

22. Which of the following is NOT part of the task of identifying the strategic issues and problems that merit front-burner managerial attention? A. Analyzing the company's external environment B. Evaluating the company's own resources and competitive position C. Surveying a company's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces D. Developing a "worry list" of "how to...," "whether to...," and "what to do about..." E. Assessing what challenges the company must overcome to be financially and competitively successful in the years ahead

C. Surveying a company's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces

Which of the following is NOT part of the task of identifying the strategic issues and problems that merit front-burner managerial attention? A. Analyzing the company's external environment B. Evaluating the company's own resources and competitive position C. Surveying a company's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces D. Developing a "worry list" of "how to...," "whether to...," and "what to do about..." E. Assessing what challenges the company must overcome to be financially and competitively successful in the years ahead

C. Surveying a company's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces

Which of the following is not part of the task of identifying the strategic issues and problems that merit front-burner managerial attention? A. Analyzing the company's external environment B. Evaluating the company's own resources and competitive position C. Surveying a company's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces D. Developing a "worry list" of "how to...," "whether to....," and "what to do about....." E. Assessing what challenges the company has to overcome in order to be financially and competitively successful in the years ahead

C. Surveying a company's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces

86. The essential difference between a "think global, act global" and a "think global, act local" approach to strategy-making is that: ␣

C. The "think global, act local" approach gives local managers more latitude to make minor strategy . variations where necessary to better satisfy local buyers and to better match local market conditions.

Which of the following is an example of an export strategy? A. The popular Disney character Mickey Mouse can only be leased or rented for use by companies. B. Subway allows small-business owners to use its trademarks, services, and products for a fee. C. The Unites States is the world's largest producer and supplier of artificial fur. D. American Airlines' common stock, owned by AMR Corp., is not available for public purchase. E. Walmart earns a quarter of its revenue outside the United States.

C. The Unites States is the world's largest producer and supplier of artificial fur.

30. Which of the following is a clear representation of a company's capability? A. A company's brand B. A productive input that is owned or controlled by the firm C. The capacity of a firm to perform some activity D. An alliance or collaboration with another firm E. All of these.

C. The capacity of a firm to perform some activity

Which of the following is NOT pertinent in identifying a company's present strategy? A. The key functional strategies (R&D, supply chain management, production, sales and marketing, HR, and finance) a company is employing B. Management's planned, proactive moves to outcompete rivals (via better product design, improved quality or service, wider product lines, and so on) C. The company's mission, strategic objectives, and financial objectives D. Moves to respond and react to changing conditions in the macro-environment and in industry and competitive conditions E. The strategic role of its collaborative partnerships and strategic alliances with others

C. The company's mission, strategic objectives, and financial objectives

Which of the following is not pertinent in identifying a company's present strategy? A. The key functional strategies (R&D, supply chain management, production, sales and marketing, HR, and finance) a company is employing B. Management's planned, proactive moves to outcompete rivals (via better product design, improved quality or service, wider product lines, and so on) C. The company's mission, strategic objectives, and financial objectives D.Moves to respond and react to changing conditions in the macro-environment and in industry and competitive conditions E. The strategic role of its collaborative partnerships and strategic alliances with others

C. The company's mission, strategic objectives, and financial objectives

75. What are two drawbacks of a "think local, act local" multidomestic strategy? ␣ ␣

C. The hindering of a company's transfer of competencies and resources across country boundaries (since . somewhat different competencies and capabilities are likely to be employed in different host countries) and that it does not promote the building of a single unified competitive advantage in all country markets where a company competes.

Which one of the following is NOT a factor in causing supplier bargaining power to be stronger? A. The products/services needed from suppliers are in short supply. B. Industry members can't integrate backward and self-supply themselves. C. The item being supplied is a commodity. D. The item being supplied significantly enhances the quality or performance of the products of industry members. E. Suppliers are not dependent on the industry for a large portion of their revenues.

C. The item being supplied is a commodity.

Which of the following is not a relevant consideration in identifying an industry's dominant economic features? A. Market size and growth rate, the geographic scope of competitive rivalry, and demand-supply conditions B. How many strategic groups the industry has and which ones are most profitable and least profitable C. The number and sizes of buyers, the number of rivals, and the pace of product innovation D. The pace of technological change E. The current industry position in its life cycle to reveal the industry's growth prospects

C. The number and sizes of buyers, the number of rivals, and the pace of product innovation

Which one of the following is part of a company's macro-environment? A. Conditions outside the market. B. European culture, values, and lifestyles. C. The pace of technological change factors and legal and regulatory conditions. D. The industry and competitive environment arena outside the company's operating territory. E. The company's resource strengths, resource weaknesses, and competitive capabilities.

C. The pace of technological change factors and legal and regulatory conditions.

Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry? A. The variables chosen as axes for the map should indicate important differences among rival approaches. B. The variables chosen as axes for the map don't have to be either quantitative or continuous. They can be discrete variables. C. The variables chosen as axes for the map should be highly correlated. D. Several maps should be drawn if more than one pair of variables give different exposures to the competitive positioning relationships present in the industry structure. E. The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group.

C. The variables chosen as axes for the map should be highly correlated.

Which of the following is not an appropriate guideline for developing a strategic group map for a given industry? A. The variables chosen as axes for the map should indicate big differences in how rivals have positioned themselves to compete in the marketplace. B. The variables chosen as axes for the map can be quantitative, qualitative, or discrete and defined in terms of distinct classes and combinations. C. The variables chosen as axes for the map should be highly correlated. D. Several maps should be drawn if more than one pair of variables can help illuminate differences in the competitive positioning of industry members. E. The sizes of the circles on the map should be drawn proportional to the combined sales of the firms in each strategic group.

C. The variables chosen as axes for the map should be highly correlated.

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack? A. To alleviate their fears by committing to reduce the costs of value chain activities B. To cause the challenger to begin the attack instead of waiting C. To dissuade challengers from attacking or diverting them into using less threatening options D. To create collaborative relationships with challengers E. To insulate other firms from adverse impacts resulting from the challenge

C. To dissuade challengers from attacking or diverting them into using less threatening options

Which of the following is NOT a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products? A. To improve access to new markets B. To expedite the development of promising new technologies or products C. To enable greater opportunities for employee advancement D. To improve supply chain efficiency E. To overcome disadvantages of small production volumes that limit scale economies and low production costs

C. To enable greater opportunities for employee advancement

Which of the following is NOT one of the objectives of benchmarking? A. To identify the best practices in performing various value chain activities B. To learn how best practice companies achieve lower costs or better results in performing benchmarked activities C. To help construct a company value chain and identify which activities are primary and which are support activities D. To develop cross-company comparisons of the costs of performing specific value chain activities E. To take actions to improve a company's cost competitiveness when benchmarking reveals that its costs and results of performing an activity are not as good as what other companies have achieved

C. To help construct a company value chain and identify which activities are primary and which are support activities

Which of the following is not one of the objectives of benchmarking? A. To identify the best practices in performing various value chain activities B. To learn how best practice companies achieve lower costs or better results in performing benchmarked activities C. To help construct a company value chain and identify which activities are primary and which are support activities D. To develop cross-company comparisons of the costs of performing specific value chain activities E. To take actions to improve a company's cost competitiveness when benchmarking reveals that its costs and results of performing an activity are not as good as what other companies have achieved

C. To help construct a company value chain and identify which activities are primary and which are support activities

Which of the following is NOT a strategic disadvantage of vertical integration? A. Vertical integration boosts a firm's capital investment in the industry, thus increasing business risk if the industry becomes unattractive later. B. Vertical integration backward into parts and components manufacturing can impair a company's operating flexibility when it comes to changing out the use of certain parts and components. C. Vertical integration reduces the opportunity for achieving greater product differentiation. D. Forward or backward integration often calls for radically different skills and business capabilities than the firm possesses. E. Vertical integration poses all kinds of capacity-matching problems.

C. Vertical integration reduces the opportunity for achieving greater product differentiation.

In which 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 the products of rivals are weakly differentiated D. When there are many ways to differentiate a product or a service and many buyers perceive these differences valuable E. When technological change is fast-paced and competition revolves around rapidly evolving product features

C. When the products of rivals are weakly differentiated

Which of the following factors is NOT a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak? A. Whether certain customers offer sellers important market exposure or prestige B. Whether customers are relatively well-informed about sellers' products, prices, and costs C. Whether buyer needs and expectations are changing rapidly or slowly D. Whether sellers' products are highly differentiated, making it troublesome or costly for buyers to switch to competing brands or to substitute products E. Whether sellers pose little threat of forward integration into the product market of their customers and whether buyers pose a major threat to integrate backward into the product market of sellers

C. Whether buyer needs and expectations are changing rapidly or slowly

Which of the following factors is not a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak? A. Whether the number of buyers is small or if a customer is particularly important to the seller B. Whether buyers are relatively well informed about sellers' products, prices, and costs C. Whether buyer needs and expectations are changing rapidly or slowly D. Whether buyer demand is weak or strong and rapidly growing E. Whether buyers pose a credible threat of integrating backward into the business of sellers

C. Whether buyer needs and expectations are changing rapidly or slowly

Which of the following factors is not a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak? A. Whether certain customers offer sellers important market exposure or prestige B. Whether customers are relatively well informed about sellers' products, prices, and costs C. Whether buyer needs and expectations are changing rapidly or slowly D. Whether sellers' products are highly differentiated, making it troublesome or costly for buyers to switch to competing brands or to substitute products E. Whether sellers pose little threat of forward integration into the product market of their customers and whether buyers pose a major threat to integrate backward into the product market of sellers

C. Whether buyer needs and expectations are changing rapidly or slowly

Which one of the following is not a factor that affects the strength of supplier bargaining power? A. Whether needed inputs are in short or ample supply B. Whether industry members are a strong threat to integrate backward into the business of suppliers C. Whether industry members are struggling to make good profits because of slow-growing market demand D. Whether the costs of industry members to switch their purchases to alternative suppliers or substitutes are high or low E. Whether the item being supplied is a commodity that is readily available from many suppliers

C. Whether industry members are struggling to make good profits because of slow-growing market demand

Which one of the following is not a factor that affects the strength of supplier bargaining power? A. Whether needed inputs are in ample supply and are readily available from several different suppliers B. Whether industry members are a strong threat to integrate backward into the business of suppliers and self-manufacture their own requirements C. Whether industry members are struggling to make good profits because of slow-growing market demand D. Whether the costs of industry members to switch their purchases to alternative suppliers are high or low E. Whether the item being supplied is a commodity or is highly differentiated from supplier to supplier

C. Whether industry members are struggling to make good profits because of slow-growing market demand

Which 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 to focus on building competitive advantages B. Whether to employ the element of surprise as opposed to doing what rivals expect and are prepared for C. Whether to employ a market share leadership strategy D. Whether to display a strong bias for swift, decisive, and overwhelming actions to overpower E. Whether to create and deploy company resources to cause rivals to defend themselves

C. Whether to employ a market share leadership strategy

106.Profit sanctuaries are country markets or geographic regions where: ␣ ␣

C. a company derives substantial profits because of its protected market position or unassailable competitive advantage

Profit sanctuaries are country markets or geographic regions where: A. a company can rank the competitive advantage opportunities in each industry. B. a company possesses good strategic fit with other businesses and identifies the value chain where this fit occurs. C. a company derives substantial profits because of its protected market position or unassailable competitive advantage. D. a company creates substantial investment strategies because it is losing competitive advantage over competitors. E. a company invests its dividends in expanding its foreign market presence.

C. a company derives substantial profits because of its protected market position or unassailable competitive advantage.

The difference between a core competence and a distinctive competence is that: A. a distinctive competence refers to a company's strongest resource or competitive capability, whereas a core competence refers to a company's lowest-cost and most efficiently executed value-chain activity. B. a core competence usually resides in a company's base of intellectual capital, whereas a distinctive competence stems from the superiority of a company's physical and tangible assets. C. a core competence is a competitively and strategically relevant activity that a firm performs well compared to its other activities, whereas a distinctive competence is a competitively relevant activity a firm performs well compared to other rival firms. D. a core competence represents a resource strength, whereas a distinctive competence is achieved by having more resource strengths than rival companies. E. a core competence usually resides in a company's technology and physical assets, whereas a distinctive competence usually resides in a company's know-how, expertise, and intellectual capital.

C. a core competence is a competitively and strategically relevant activity that a firm performs well compared to its other activities, whereas a distinctive competence is a competitively relevant activity a firm performs well compared to other rival firms.

The difference between a core competence and a distinctive competence is that A. a distinctive competence refers to a company's strongest resource or competitive capability and a core competence refers to a company's lowest-cost and most efficiently executed value-chain activity. B. a core competence usually resides in a company's base of intellectual capital whereas a distinctive competence stems from the superiority of a company's physical and tangible assets. C. a core competence is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs, whereas a distinctive competence is a competitively relevant activity which a firm performs especially well in comparison to other firms with which it competes. D. a core competence represents a resource strength whereas a distinctive competence is achieved by having more resource strengths than rival companies. E. a core competence usually resides in a company's technology and physical assets whereas a distinctive competence usually resides in a company's know-how, expertise, and intellectual capital.

C. a core competence is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs, whereas a distinctive competence is a competitively relevant activity which a firm performs especially well in comparison to other firms with which it competes.

When a company has a proficiency in performing a strategically and competitively important value chain activity better than its rivals, it is said to have: A. a company competence. B. a core competence. C. a distinctive competence. D. a key value chain proficiency. E. a competitive advantage over rivals.

C. a distinctive competence.

When a company performs a particular competitively important activity truly well in comparison to its competitors, it is said to have A. a company competence. B. a strategic resource. C. a distinctive competence. D. a core competence. E. a key success factor.

C. a distinctive competence.

A think-global, act-global strategic theme puts emphasis on: A. executing a global domination strategy that focuses the company's resource strengths on entry strategies across all country boundaries. B. ensuring that value chain activities are defined by country-specific attributes to capitalize on economies of scale. C. building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another. D. elevating resources and capabilities developed on a country-by-country basis so as to capitalize on a country's uniqueness. E. implementing mass-customization techniques that can address local preferences efficiently.

C. building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another.

An industry's key success factors A. are a function of market share, entry barriers, economies of scale, degree of vertical integration, and industry profitability. B. vary according to whether an industry has high or low long-term attractiveness. C. can be determined through identifying an industry's dominant economic characteristics, assessing the five competitive forces, considering the impacts of the driving forces, comparing the market positions of industry members, and forecasting the likely next moves of industry rivals. D. can be determined from studying the "winning" strategies of the industry leaders and ruling out as potential key success factors the strategy elements of those firms considered to have "losing" strategies. E. depend on the relative competitive strengths of the industry leaders and how vulnerable they are to competitive attack.

C. can be determined through identifying an industry's dominant economic characteristics, assessing the five competitive forces, considering the impacts of the driving forces, comparing the market positions of industry members, and forecasting the likely next moves of industry rivals.

Opportunities to differentiate a company's product offering: A. are most reliably found in the R&D portion of the value chain. B. are typically located in the sales and marketing portion of the value chain. C. can exist in activities all along an industry's value chain. D. usually are tied to product quality and customer service. E. are most frequently attached to a company's manufacturing expertise and to its ability to achieve economies of scale in production.

C. can exist in activities all along an industry's value chain.

Pursuing continuous quality improvement as a uniqueness factor is sound because it: A. can create differentiation even if little tangible differentiation exists otherwise. B. bestows the first-mover-in-the-market advantage on companies practicing it. C. can often reduce product defects and improve economy of use. D. always provides a competitive advantage. E. provides wider product variety and selection through product versioning.

C. can often reduce product defects and improve economy of use.

Which of the following is a clear representation of a company's capability? A. a company's brand. B. a productive input that is owned or controlled by the firm C. capacity of a firm to perform some activity. D. an alliance or collaboration with another firm. E. All of these.

C. capacity of a firm to perform some activity.

Increasing globalization of the industry can be a driving force because: A. the products of foreign competitors are nearly always cheaper or of better quality than those of domestic companies. B. foreign producers typically have lower costs, greater technological expertise, and more product innovation capabilities than domestic firms. C. companies need to spread their operating reach into more and more country markets to meet consumer demand and take advantage of available operating activities. D. it results in companies having fewer competitors and a strategic group map with fewer circles. E. market growth rates go up, product innovation speeds up, and new firms are likely to enter the industry.

C. companies need to spread their operating reach into more and more country markets to meet consumer demand and take advantage of available operating activities.

A company that has competitive assets that are central to its company strategy and superior to those of rival firms creates a: A. long-term derivative strategy. B. cash flow feasibility analysis. C. competitive advantage over other companies. D. resource deployment strategic plan. E. cost underestimation and benefit overestimation.

C. competitive advantage over other companies.

A company that has competitive assets which are central to company strategy and superior to rival firms creates a A. long-term derivative strategy. B. cash flow feasibility analysis. C. competitive advantage over other companies. D. resource deployment strategic plan. E. cost underestimation and benefit overestimation.

C. competitive advantage over other companies.

94. To use location to build competitive advantage, a company that operates transnationally or globally must:

C. consider whether to concentrate each activity it performs in a few select countries or disperse . performance of the activity to many nations and consider in which countries to locate particular activities.

To use location to build competitive advantage, a company that operates transnationally or globally must: A. employ either an export strategy or a franchising strategy. B. scatter its production plants across many countries in different parts of the world so as to minimize transportation costs. C. consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities. D. locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs. E. concentrate all of its value chain activities in the one country that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

C. consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities.

The rivalry among competing sellers tends to be less intense when A. industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit sales. B. buyer demand is weak and many sellers have excess capacity and/or inventory. C. industry rivals are not particularly aggressive in drawing sales and market share away from rivals. D. rivals have diverse strategies and objectives and are located in different countries. E. rival sellers have weakly differentiated products.

C. industry rivals are not particularly aggressive in drawing sales and market share away from rivals.

A core competence:

is a more competitively valuable strength than a competence because of the key role the activities play in the company's strategy.

A company's value chain A. consists of the primary activities that it performs in seeking to deliver value to shareholders in the form of higher dividends and a higher stock price. B. depicts the internally performed activities associated with creating and enhancing the company's competitive assets. C. consists of two broad categories of activities: the primary activities that create customer value and the requisite support activities that facilitate and enhance the performance of the primary activities. D. concerns the basic process the company goes through in performing R&D and developing new products. E. consists of the series of steps a company goes through to develop a new product, get it produced and distributed into the marketplace, and then start collecting revenues and earning a profit.

C. consists of two broad categories of activities: the primary activities that create customer value and the requisite support activities that facilitate and enhance the performance of the primary activities.

A good example of vertical integration is a: A. global public accounting firm acquiring a small local or regional public accounting firm. B. large supermarket chain getting into convenience food stores. C. crude oil refiner purchasing a firm engaged in drilling and exploring for oil. D. hospital opening up a nursing home for the aged. E. railroad company acquiring a trucking company specializing in long-haul freight.

C. crude oil refiner purchasing a firm engaged in drilling and exploring for oil.

38. A company's resource weaknesses can relate to: A. inferior or unproven skills, expertise, or intellectual capital in competitively important parts of the business. B. something that it lacks or does poorly in comparison to rivals. C. deficiencies in competitively important physical, organizational, or intangible assets. D. missing or competitively inferior capabilities in key areas. E. All of these.

C. deficiencies in competitively important physical, organizational, or intangible assets.

Activity-based costing is used to A. determine whether the value chains of rival companies are similar or different. B. benchmark the costs of primary value chain activities against the costs of the support value chain activities. C. determine the costs of each primary and support activity comprising a company's value chain and thereby reveal the nature and make-up of a company's internal cost structure. D. determine the costs of each strategic action a company initiates. E. None of these accurately describes what activity-based costing is about.

C. determine the costs of each primary and support activity comprising a company's value chain and thereby reveal the nature and make-up of a company's internal cost structure.

Activity-based costing is used to evaluate a company's cost-competitiveness and: A. determine whether the value chains of rival companies are similar or different. B. benchmark the costs of primary value chain activities against the costs of the support value chain activities. C. determine the costs of each primary and support activity comprising a company's value chain and thereby reveal the nature and makeup of a company's internal cost structure. D. determine the costs of each strategic action a company initiates. E. analyze the costs of each primary activity.

C. determine the costs of each primary and support activity comprising a company's value chain and thereby reveal the nature and makeup of a company's internal cost structure.

Activity-based cost accounting aims at A. making cross-company comparisons of the costs of each value chain activity. B. dividing all company expenses into two categories: activities whose costs are variable and activities whose costs are fixed. C. determining the costs of each activity comprising a company's value chain by establishing expense categories for specific value chain activities and assigning costs to the activity responsible for creating the cost. D. determining the costs of each strategic action a company initiates. E. None of these accurately describes what activity-based costing is about

C. determining the costs of each activity comprising a company's value chain by establishing expense categories for specific value chain activities and assigning costs to the activity responsible for creating the cost.

To build a competitive advantage by out-managing rivals in performing value chain activities, a company must A. position itself in the industry's more favorably situated strategic group. B. develop resources strengths that will enable it to pursue the industry's most attractive opportunities. C. develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers or else be more cost efficient in how it performs value chain activities such that it has a low-cost advantage. D. outsource all of its value chain activities to world-class vendors and suppliers. E. eliminate its resource weaknesses

C. develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers or else be more cost efficient in how it performs value chain activities such that it has a low-cost advantage.

To build a competitive advantage by out-managing rivals in performing value chain activities, a company must: A. position itself in the industry's more favorably situated strategic group. B. develop resource strengths that will enable it to pursue the industry's most attractive opportunities. C. develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers. D. outsource all of its value chain activities to world-class vendors and suppliers. E. eliminate its resource weaknesses.

C. develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers.

Backward vertical integration can produce a: A. full integration when activities remain the domain of key suppliers. B. tapered integration if the firm consolidates all activities in-house. C. differentiation-based competitive advantage when activities enhance the performance of the final product. D. focused differentiation strategy when the market is broad and the product is a commodity. E. lower degree of flexibility in accommodating shifting buyer preferences.

C. differentiation-based competitive advantage when activities enhance the performance of the final product.

The competitive advantage of a best-cost provider is: A. having the best value chain in the industry. B. its brand name reputation. C. its capability to incorporate upscale or attractive attributes into its product offering at lower costs than rivals. D. a distinctive competence in delivering top-notch quality and customer service. E. a distinctive competence in supply chain management.

C. its capability to incorporate upscale or attractive attributes into its product offering at lower costs than rivals.

41. In order to gain value from the SWOT analysis, it is important that the company address the two most important parts of a SWOT analysis, which are: A. identifying the resource strengths and resource weaknesses. B. understanding the relationship between the strengths, weaknesses, opportunities, and threats and establishing criteria for remedying the company's shortfalls. C. drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into strategic actions. D. clarifying the firm's current position and ensuring the SWOT listings are complete. E. establishing a game plan to capitalize on the company's strengths and leverage the weaknesses in light of the available opportunities.

C. drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into strategic actions.

The production emphasis of a company pursuing a broad differentiation strategy usually involves: A. eliminating cost reduction and decreasing quality and essential features to boost profitability. B. strong efforts to be a leader in manufacturing process innovation. C. emphasis on building differentiating features that buyers are willing to pay for and includes wide selection and many product variations. D. the aggressive pursuit of economies of scale and experience-curve effects. E. developing a distinctive competence in zero-defect manufacturing techniques.

C. emphasis on building differentiating features that buyers are willing to pay for and includes wide selection and many product variations.

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to: A. combat the bargaining power of foreign suppliers and help defend against the competitive threat of substitute products produced by foreign rivals. B. help raise needed financial capital from foreign banks and use the brand names of their partners to make sales to foreign buyers. C. 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. D. help wage price wars against foreign competitors. E. exercise better control over efforts to revamp the global industry value chain.

C. 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.

Driving forces analysis: A. has speculative value because it compels the firm to drive strategic intent and collective choice into operating practices. B. has theoretical value because it allows managers to visualize the many different dimensions of the preferred forces that allow for industry functionality. C. has practical value and is basic to the task of thinking strategically about where the industry is headed and how to prepare for the changes ahead. D. has no real analytical value because the driving forces are already established in the marketplace and it is too late to make astute and timely strategy adjustments. E. All of these.

C. has practical value and is basic to the task of thinking strategically about where the industry is headed and how to prepare for the changes ahead.

The best example of a company resource is A. having higher earnings per share and a higher return on shareholders' equity investment than key rivals. B. being totally self-sufficient such that the company does not have to rely in any way on key suppliers, partnerships with outsiders, or strategic alliances. C. having proven technological expertise and ability to churn out new and improved products on a regular basis. D. having a larger number of competitive assets than competitive liabilities. E. having more built-in key success factors than rivals.

C. having proven technological expertise and ability to churn out new and improved products on a regular basis.

The BEST example of a company resource is: A. having higher earnings per share and a higher return on shareholders' equity investment than key rivals. B. being totally self-sufficient such that the company does not have to rely in any way on key suppliers, partnerships with outsiders, or strategic alliances. C. having proven technological expertise and an ability to churn out new and improved products on a regular basis. D. having a larger number of competitive assets than competitive liabilities. E. having more built-in key success factors than rivals.

C. having proven technological expertise and an ability to churn out new and improved products on a regular basis.

Each of the five generic strategies positions the company differently, EXCEPT when it concerns: A. its market and competitive environment. B. establishing a central theme for how the company will endeavor to outcompete rivals. C. having resources and capabilities that rivals have trouble duplicating. D. defining differences in terms of product line and production emphasis. E. defining differences in terms of marketing emphasis and the means of maintaining strategy.

C. having resources and capabilities that rivals have trouble duplicating.

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships to: A. discourage rival companies from merging with or acquiring the very companies that it is partnering with. B. reduce overall business risk and raise entry barriers into the newly emerging industry. C. help master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry. D. help defeat competitors that are employing broad differentiation strategies. E. enhance its chances of achieving global low-cost leadership.

C. help master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry.

55. Cross-border alliances between domestic and foreign firms are more effective in: ␣ ␣

C. helping establish a new beachhead of opportunity rather than in achieving and sustaining global market leadership.

11. Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of: A. whether the profits of suppliers are relatively high or low. B. the number of suppliers that each seller/industry member purchases from on average. C. how aggressively rival industry members are trying to differentiate their products. D. whether demand for supplier products is high and they are in short supply. E. whether the prices of the items being furnished by the suppliers are rising or falling.

C. how aggressively rival industry members are trying to differentiate their products.

16. One important concern a company has in trying to compete successfully in foreign markets is: ␣ ␣

C. how it can gain location-based competitive advantage in locating its various value chain activities.

The rivalry among competing sellers tends to be less intense when: A. industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit sales. B. buyer demand is weak and many sellers have excess capacity and/or inventory. C. industry rivals are not particularly aggressive or active in making fresh moves to improve their market standing and business performance. D. rivals have diverse strategies and objectives and are located in different countries. E. rival sellers have weakly differentiated products.

C. industry rivals are not particularly aggressive or active in making fresh moves to improve their market

A strategic group: A. consists of those industry members that are growing at about the same rate and have similar product line breadth. B. includes all rival firms having comparable profitability. C. is a cluster of industry members with similar competitive approaches and market positions in the market. D. consists of those firms whose market shares are about the same size. E. is made up of those firms having comparable profit margins.

C. is a cluster of industry members with similar competitive approaches and market positions in the market.

A strategic group A. consists of those industry members that are growing at about the same rate and have similar product line breadth. B. includes all rival firms having comparable profitability. C. is a cluster of industry rivals that have similar competitive approaches and market positions. D. consists of those firms whose market shares are about the same size. E. is made up of those firms having comparable profit margins.

C. is a cluster of industry rivals that have similar competitive approaches and market positions.

Companies often implement a transnational strategy because it: A. combines flexible coordination with the pursuit of conflicting objectives simultaneously. B. provides an easy mode of operating to transfer and share resources and capabilities across borders. C. is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner. D. is the least complex and easiest to implement of all the strategy choices. E. is capable of achieving an efficiency potential through centralized decision making and strong headquarter control.

C. is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner.

A "think local, act local" multidomestic type of strategy: A. is very risky, given fluctuating exchange rates and the propensity of foreign governments to impose tariffs on imported goods. B. is usually defeated by a "think global, act global" type of strategy. C. is more appealing when the country-to-country differences in buyer tastes, cultural traditions, and market conditions are diverse. D. is generally an inferior strategy when one or more foreign competitors are pursuing a global low-cost strategy. E. can defeat a global strategy if the "think local, act local" multicountry strategist concentrates its efforts exclusively in those foreign markets which have superior resources.

C. is more appealing when the country-to-country differences in buyer tastes, cultural traditions, and market conditions are diverse.

Identifying the primary and secondary activities that comprise a company's value chain A. indicates whether a company's resource strengths will ultimately translate into greater value for shareholders. B. reveals whether a company's resource strengths are well-matched to the industry's key success factors. C. is the first step in understanding a company's cost structure (since each activity in the value chain gives rise to costs). D. is called benchmarking. E. is called resource value analysis.

C. is the first step in understanding a company's cost structure (since each activity in the value chain gives rise to costs).

47. Identifying the primary activities and support activities that comprise a company's value chain: A. indicates whether a company's resource strengths will ultimately translate into greater value for shareholders. B. reveals whether a company's resource strengths are well-matched to the industry's key success factors. C. is the first step in understanding a company's internal cost structure since each activity in the value chain gives rise to costs. D. is called benchmarking. E. is called resource value analysis.

C. is the first step in understanding a company's internal cost structure since each activity in the value chain gives rise to costs.

89. Companies often implement a transnational strategy because: ␣ ␣

C. it is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner.

If a company doesn't possess stand alone resource strengths capable of contributing to competitive advantage: A. all potential for competitive advantage is lost. B. it is unlikely to survive in the marketplace and should exit the industry. C. it may have a bundle of resources that can be leveraged to develop a distinctive competence. D. it is virtually blocked from using offensive strategies and must rely on defensive strategies. E. its best strategic option is to revamp its value chain in hopes of creating stronger competitive capabilities.

C. it may have a bundle of resources that can be leveraged to develop a distinctive competence.

If a company doesn't possess standalone resource strengths capable of contributing to competitive advantage: A. all potential for competitive advantage is lost. B. it is unlikely to survive in the marketplace and should exit the industry. C. it may have a bundle of resources that can be leveraged to develop a distinctive competence. D. it is virtually blocked from using offensive strategies and must rely on defensive strategies. E. its best strategic option is to revamp its value chain in hopes of creating stronger competitive capabilities.

C. it may have a bundle of resources that can be leveraged to develop a distinctive competence.

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense EXCEPT when: A. an activity can be performed better or more cheaply by outside specialists. B. it allows a company to focus its entire energies on its core business. C. it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently. D. it reduces the company's risk exposure to changing technology and/or changing buyer preferences. E. it allows a company to leverage its key resources.

C. it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently.

Which of the following is NOT an example of a company that uses blue-ocean market strategy? A. eBay's online auction industry B. NetJets' fractional jet ownership C. Drybar's hair blowouts D. Cirque de Soleil's live entertainment E. Walmart's logistics and distribution

E. Walmart's logistics and distribution

In a weighted competitive strength analysis, each strength measure is assigned a weight based on A. its percentage share of total industry revenues. B. the importance of each competitive strength measure in building a sustainable competitive advantage. C. its perceived importance in determining a company's competitive success in the marketplace. D. its percentage share of total industry profits. E. what it takes to provide better analytical balance between the companies with high ratings and the companies with low ratings and thus get the sum of the weights to add up to 1.0.

C. its perceived importance in determining a company's competitive success in the marketplace.

In a weighted competitive strength analysis, each strength measure is assigned a weight based on: A. its percentage share of total industry revenues. B. its percentage share of total industry losses. C. its perceived importance in determining a company's competitive success in the marketplace. D. its percentage share of total industry profits. E. what it takes to provide better analytical balance between the companies with high ratings and the companies with low ratings and thus get the sum of the weights to add up to 1.0.

C. its perceived importance in determining a company's competitive success in the marketplace.

The generic types of competitive strategies include: A. market share growth provider, sales revenue leader strategy, and market share retention strategy. B. offensive strategies, defensive strategies, and counter maneuvers strategies. C. low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation strategies. D. low-cost/low-price strategies, high-quality/high-price strategies, and medium quality/medium price strategies. E. price leader strategies, price follower strategies, technology leader strategies, and first-mover strategies.

C. low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation strategies.

Which of the following does not represents a company resource? A. a company's brand. B. a productive input that is owned by the firm. C. marketing and brand management. D. R&D teams. E. a productive input that is controlled by the firm.

C. marketing and brand management.

The external market opportunities which are MOST relevant to a company are the ones that: A. can increase market share. B. are reinforced by the overall business strategy and reflect the business model. C. match up well with the firm's competitive assets, offer the best prospects for growth and profitability, and present the most potential for competitive advantage. D. qualify to correct its internal weaknesses and resource deficiencies. E. are relevant for defending against the external threats to its well-being.

C. match up well with the firm's competitive assets, offer the best prospects for growth and profitability, and present the most potential for competitive advantage.

The external market opportunities which are most relevant to a company are the ones that A. increase market share. B. reinforce its overall business strategy. C. match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability, and present the most potential for competitive advantage. D. correct its internal weaknesses and resource deficiencies. E. help defend against the external threats to its well-being.

C. match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability, and present the most potential for competitive advantage.

The competitive objective of a best-cost provider strategy is to: A. outmatch the resource strengths of both low-cost providers and differentiators. B. position the company outside the competitive arena of low-cost producers and differentiators. C. meet or exceed buyer expectations on key quality/performance/features/service attributes and beat their expectations on price (given what rivals are charging for much the same attributes). D. deliver superior value to buyers by doing such a good job of cost control that it ends up with the best cost (as compared to rivals) in performing each activity in its value chain. E. identify and concentrate on those differentiating features that are inexpensive to incorporate.

C. meet or exceed buyer expectations on key quality/performance/features/service attributes and beat their expectations on price (given what rivals are charging for much the same attributes).

Whether a broad differentiation strategy ends up enhancing a company's profitability depends mainly on whether: A. many buyers view the product's differentiating features as having value. B. most buyers have similar needs and use the product in the same ways. C. most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation. D. buyer switching costs are low and customer loyalty to any one brand is low. E. buyers are prone to shop the market for sellers offering the best price.

C. most buyers accept the customer value proposition as unique and the product can produce sufficient unit sales to cover the costs of achieving the differentiation.

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

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

Achieving a sure cost advantage over rivals entails: A. concentrating on the primary activities portion of the value chain and outsourcing all support activities. B. being a first-mover in pursuing backward and forward integration and controlling as much of the industry value chain as possible. C. selling a mostly standard product and increasing the scale of operation. D. minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs. E. producing a standard product, redesigning the product infrequently, and having minimal advertising.

C. selling a mostly standard product and increasing the scale of operation.

Which of the following factors does not determine whether to employ the entry strategy options? A. Cross-border transfer activities and home country advantages B. The nature of the firm's objectives C. Whether the firm has a full range of resources and capabilities needed to operate abroad D. Country-specific factors such as trade barriers E. Transaction costs involved (the cost of contracting with a partner and monitoring compliance with the terms of the contract)

Cross-border transfer activities and home country advantages

A competitive strategy predicated on low-cost leadership tends to work best when: A. there are widely varying needs and preferences among the various buyers of the product or service. B. there are many market segments and market niches, such that it is feasible for a low-cost leader to dominate the niche where buyers want a budget-priced product. C. price competition among rivals is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products. D. buyers prefer that the products/services of competing sellers have widely varying attributes and prices. E. buyers have high switching costs and there is considerable diversity in how buyers use the product.

C. price competition among rivals is especially vigorous and the offerings of rival firms are essentially identical, standardized, commodity-like products.

84. The approach of a firm using a "think global, act local" version of a global strategy entails: ␣ ␣

C. pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in . all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.

The approach of a firm using a "think global, act local" version of a transnational strategy entails: A. producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country. B. having little or no strategy coordination across countries. C. pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions. D. selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so buyers in each country market will think they are buying a locally made brand. E. selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country),but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market.

C. pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.

Being the overall low-cost provider in an industry has the attractive advantage of: A. building strong customer loyalty and locking customers into its product because customers have high switching costs. B. giving the firm a very appealing brand image. C. putting a firm in the best position to win the business of price-sensitive customers and earn profits by setting the floor on market price. D. putting the company in a strong position to be more profitable than companies pursuing a differentiation strategy. E. greatly reducing the strong bargaining power of rivals with the key distributors.

C. putting a firm in the best position to win the business of price-sensitive customers and earn profits by setting the floor on market price.

Relying on outsiders to perform certain value chain activities offers such strategic advantages as: A. ensuring more costly components or services. B. improving the company's inability to innovate by allying with "best-in-class" suppliers. C. reducing the company's risk exposure to changing technology and/or changing buyer preferences. D. increasing the firm's inability to assemble diverse kinds of expertise speedily and efficiently. E. reducing its information technology and operational costs so that organizational flexibility is maintained.

C. reducing the company's risk exposure to changing technology and/or changing buyer preferences.

The company with the highest rating on a given measure has an implied competitive edge on that specific measure, with the size of its edge: A. providing the company with an overall net competitive score that is reduced by the weighted measure. B. signaling a weak position and competitive disadvantage. C. reflecting the difference between its weighted rating and rivals' weighted ratings. D. reflecting an area of potential improvement in order to achieve a sustainable competitive advantage. E. requiring reevaluation of the weighted measure.

C. reflecting the difference between its weighted rating and rivals' weighted ratings.

Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when: A. virtually all buyers have strong brand attachments and are highly brand loyal. B. demand for the product is growing rapidly. C. sales are made to buyer groups with either strong bargaining power or high sensitivity. D. sellers are racing to add the latest and greatest performance features so as to attract the patronage of important or prestigious buyers. E. buyers are very quality conscious.

C. sales are made to buyer groups with either strong bargaining power or high sensitivity.

A Joint Venture

is a partnership involving the establishment of an independent corporate entity that the partners own and control jointly, sharing in its revenues and expenses.

Rivalry among competing sellers tends to be more intense when: A. competitors vary in size and capability, such that smaller firms must really struggle to even survive. B. buyer switching costs are high and market demand is growing rapidly. C. several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position. D. the products of rival sellers are strongly differentiated. E. All of these.

C. several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position.

29. A company's resource and capability analysis: A. represent its core competencies. B. are the most important parts of the company's value chain. C. signal whether it has the wherewithal to be a strong competitor in the marketplace. D. give it an excellent ability to insulate itself against the impact of the industry's driving forces. E. combine to give it a distinctive competence.

C. signal whether it has the wherewithal to be a strong competitor in the marketplace.

A company's resource and capability analysis A. represent its core competencies. B. are the most important parts of the company's value chain. C. signal whether it has the wherewithal to be a strong competitor in the marketplace. D. give it excellent ability to insulate itself against the impact of the industry's driving forces. E. combine to give it a distinctive competence.

C. signal whether it has the wherewithal to be a strong competitor in the marketplace.

The culture of a company can be a cost-efficient value chain activity because it can: A. allow for safeguarding internalized operating benefits. B. distinguish a company's capacity integration efforts. C. spur worker pride in productivity and continuous improvement. D. foster quality technological enhancements. E. increase a company's bargaining power with suppliers.

C. spur worker pride in productivity and continuous improvement.

An industry's key success factors can always be deduced by asking what factors: A. are a function of market share, entry barriers, and economies of scale, degree of vertical integration, and industry profitability that are advantageous. B. vary according to whether an industry has high or low long-term attractiveness. C. such as product attributes and service characteristics are crucial, and what resources and competitive capabilities are needed, and what shortcomings are evident to put a company at a competitive disadvantage. D. can be determined from studying the "winning" strategies of the industry leaders and ruling out as potential key success factors the strategy elements of those firms considered to have "losing" strategies. E. depend on the relative competitive strengths of the industry leaders and how vulnerable they are to competitive attack.

C. such as product attributes and service characteristics are crucial, and what resources and competitive capabilities are needed, and what shortcomings are evident to put a company at a competitive disadvantage.

A company requires a dynamically evolving portfolio of resources and capabilities to A. assist the strategic planning team in overall direction. B. sustain complex manufacturing systems as a strategic recoil. C. sustain its competitiveness and help drive improvements in its performance. D. sustain benefits of high market share as an interest in growth strategies. E. transform knowledge into a management style supporting competition in a globally diverse world.

C. sustain its competitiveness and help drive improvements in its performance.

A company requires a dynamically evolving portfolio of resources and capabilities to: A. assist the strategic planning team in overall direction. B. sustain complex manufacturing systems as a strategic recall. C. sustain its competitiveness and help drive improvements in its performance. D. sustain benefits of high market share as an interest in growth strategies. E. transform knowledge into a management style supporting competition in a globally diverse world.

C. sustain its competitiveness and help drive improvements in its performance.

The big danger or risk of a best-cost provider strategy is: A. that buyers will be highly skeptical about paying a relatively low price for upscale attributes/features. B. not establishing strong alliances and partnerships with key suppliers. C. that rivals with low-cost provider strategies will be able to steal away some customers on the basis of a lower price, and high-end differentiators will be able to steal away customers with the appeal of better product attributes. D. that it will be unable to achieve top-notch quality at a rock-bottom cost. E. becoming too highly integrated and not relying enough on outsourcing.

C. that rivals with low-cost provider strategies will be able to steal away some customers on the basis of a lower price, and high-end differentiators will be able to steal away customers with the appeal of better product attributes.

The essential difference between a "think global, act global" and a "think global, act local" approach to strategy-making is that: A. a "think global, act global" approach entails extensive strategy coordination across countries and a "think global, act local" approach entails little or no strategy coordination across countries. B. the former aims at implementing the same business model worldwide, whereas the latter aims at implementing customized business models to better match local market circumstances. C. the "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions. D. a "think global, act global" approach involves selling a mostly standardized product worldwide, whereas a "think global, act local" approach entails selling products that are highly differentiated from country to country. E. a "think global, act global" approach involves selling under a single brand name worldwide, whereas a "think global, act local" approach entails utilizing multiple brands (typically one for each different country or group of neighboring countries).

C. the "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions.

In mapping strategic groups: A. one strategic variable and one financial variable should be used as axes for the map. B. it is important for the variables used as axes to be highly correlated. C. the best variables to use as axes for the map are those that identify the competitive characteristics that delineate strategic approaches used in the industry. D. it is important to use price as the variable for the vertical axis. E. the primary objective is to determine which strategic groups are profitable and which are not.

C. the best variables to use as axes for the map are those that identify the competitive characteristics that delineate strategic approaches used in the industry.

The best quantitative evidence of whether a company's present strategy is working well is A. whether the company has more competitive assets than it does competitive liabilities. B. whether the company is in the industry's best strategic group. C. the caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer. D. whether the company has a shorter value chain than close rivals. E. whether the company is in the Fortune 500.

C. the caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.

The best quantitative evidence of whether a company's present strategy is working well is: A. whether the company has more competitive assets than it does competitive liabilities. B. whether the company is in the industry's best strategic group. C. the caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer. D. whether the company has a shorter value chain than close rivals. E. whether the company is in the Fortune 500.

C. the caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.

One important indicator of how well a company's present strategy is working is whether A. it has more core competencies than close rivals. 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 is customarily a first-mover in introducing new or improved products (a good sign) or a late-mover (a bad sign). 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. the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.

One important indicator of how well a company's present strategy is working is whether: A. it has more core competencies than close rivals. 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 is customarily a first-mover in introducing new or improved products (a good sign) or a late-mover (a bad sign). 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. the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.

Competitive pressures stemming from buyer bargaining power tend to be weaker when A. the number of buyers is small, such that each customer's business tends to be particularly important to a seller. B. buyer demand is growing slowly or maybe even declining. C. the costs incurred by buyers in switching to competing brands or to substitute products are relatively high. D. buyers are well informed about sellers' products, prices, and costs. E. the buyer group consists of a few large buyers and the seller group consists of numerous small firms.

C. the costs incurred by buyers in switching to competing brands or to substitute products are relatively high.

Competitive pressures stemming from buyer bargaining power tend to be weaker when: A. the number of buyers is small, such that each customer's business tends to be particularly important to a seller. B. buyer demand is growing slowly or maybe even declining. C. the costs incurred by buyers in switching to competing brands or to substitute products are relatively high. D. buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs. E. the buyer group consists of a few large buyers and the seller group consists of numerous small firms.

C. the costs incurred by buyers in switching to competing brands or to substitute products are relatively high.

Strategic group mapping is a visual technique for displaying: A. how many rivals are pursuing each type of strategy. B. which companies have the biggest market share and who the industry leader really is. C. the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors. D. which companies have the highest degrees of brand loyalty. E. which companies have failing business models.

C. the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors.

Competitive strength can be determined by assigning measures based on perceived importance because A. it provides a more accurate assessment of the strength of competitive forces. B. it eliminates the bias introduced for those firms having large market shares. C. the different measures of competitive strength are unlikely to be equally important. D. the results provide a more reliable measure of what competitive moves rivals are likely to make next. E. weighting each company's overall competitive strength by the size of its market share produces a more accurate measure of its true competitive strength.

C. the different measures of competitive strength are unlikely to be equally important.

Competitive strength can be determined by assigning measures based on perceived importance because: A. it provides a more accurate assessment of the strength of competitive forces. B. it eliminates the bias introduced for those firms having large market shares. C. the different measures of competitive strength are unlikely to be equally important. D. the results provide a more reliable measure of what competitive moves rivals are likely to make next. E. weighting each company's overall competitive strength by the size of its market share produces a more accurate measure of its true competitive strength.

C. the different measures of competitive strength are unlikely to be equally important.

A strategy of vertical integration can have substantial drawbacks, including: A. whether horizontal integration can limit the performance of strategy-critical activities in ways that increase cost, build expertise, protect proprietary know-how, or increase differentiation. B. raising the firm's capital investment in the industry and increasing business risk, as well as providing less flexibility in accommodating shifting buyer preferences by locking the firm into relying on its own in-house activities. C. the environmental costs of coordinating operations across vertical chain activities. D. loss of technological know-how. E. the difficulties faced in entering outside vertical and horizontal markets.

C. the environmental costs of coordinating operations across vertical chain activities.

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when: A. new industry or market segments are yet to be developed and create altogether new consumer demand. B. fast followers find it easy to leapfrog the pioneer with even better next-generation products of their own. C. the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first-mover. D. entry barriers are high, substitute products or services are readily available, and buyers are prone to negotiate aggressively for better terms and lower prices. E. there are nearly always big advantages to being a slow mover rather than an early mover, especially in regards to avoiding the "mistakes" of first or early movers.

C. the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first-mover.

Thinking strategically about the industry and competitive environment involves in-depth analysis and evaluation of such consideration as: A. the strength of the equilibrium forces driving change in the environment. B. the identification of the dominant financial risk components of the industry in which the company operates. C. the market positions of industry rivals and their relative strength, and the competitive forces rivals are facing and what impact they will have on competitive intensity and industry profitability. D. the critical factors influencing past competitive success in the industry. E. All of these.

C. the market positions of industry rivals and their relative strength, and the competitive forces rivals are facing and what impact they will have on competitive intensity and industry profitability.

The three main areas in the value chain where significant differences in the costs of competing firms can occur include A. age of plants and equipment, number of employees, and advertising costs. B. operating-level activities, functional area activities, and line of business activities. C. the nature and make-up of their own internal operations, the activities performed by suppliers, and the activities performed by wholesale distribution and retailing allies. D. human resource activities (particularly labor costs), vertical integration activities, and strategic partnership activities. E. variable cost activities, fixed cost activities, and administrative activities.

C. the nature and make-up of their own internal operations, the activities performed by suppliers, and the activities performed by wholesale distribution and retailing allies.

The three main areas in the value chain where significant differences in the costs of competing firms can occur include: A. age of plants and equipment, number of employees, and advertising costs. B. operating-level activities, functional area activities, and line of business activities. C. the nature and makeup of their own internal operations, the activities performed by suppliers, and the activities performed by wholesale distribution and retailing allies. D. human resource activities (particularly labor costs), vertical integration activities, and strategic partnership activities. E. variable cost activities, fixed cost activities, and administrative activities.

C. the nature and makeup of their own internal operations, the activities performed by suppliers, and the activities performed by wholesale distribution and retailing allies.

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or best-cost or focus/market niche strategy when: A. there are many ways to achieve product differentiation that buyers find appealing. B. buyers use the product in a variety of different ways and have high switching costs in changing from one seller's product to another. C. the offerings of rival firms are essentially identical, standardized, commodity-like products. D. entry barriers are high and competition from substitutes is relatively weak. E. the market is composed of many distinct segments with varying buyer needs and expectations.

C. the offerings of rival firms are essentially identical, standardized, commodity-like products.

The chief difference between a low-cost provider strategy and a focused low-cost strategy is: A. whether the product is strongly differentiated or weakly differentiated from rivals. B. the degree of bargaining power that buyers have. C. the size of the buyer group that a company is trying to appeal to. D. the type of value chain being used to achieve a low-cost competitive advantage. E. the number of upscale attributes incorporated into the product offering.

C. the size of the buyer group that a company is trying to appeal to.

A company's "macro-environment" refers to: A. the industry and the competitive arena in which the company operates. B. general economic conditions plus the factors driving change in the markets where a company operates. C. the strategically relevant factors outside a company's industry boundaries—economic conditions, political factors, socio-cultural forces, technological factors, environmental factors, and legal/regulatory conditions. D. the competitive market environment that exists between a company and its competitors. E. the dominant economic features of a company's industry.

C. the strategically relevant factors outside a company's industry boundaries—economic conditions, political factors, socio-cultural forces, technological factors, environmental factors, and legal/regulatory conditions.

1. A company's "macro-environment" refers to: A. the industry and the competitive arena in which the company operates. B. general economic conditions plus the factors driving change in the markets where a company operates. C. the strategically relevant factors outside a company's industry boundaries—economic conditions, political factors, socio-cultural forces, technological factors, environmental factors, and legal/regulatory conditions. D. the competitive market environment that exists between a company and its competitors. E. the dominant economic features of a company's industry.

C. the strategically relevant factors outside a company's industry boundaries—economic conditions, political factors, socio-cultural forces, technological factors, environmental factors, and legal/regulatory conditions.

Which of the following are NOT generic strategy options for competing in foreign markets? A. A multidomestic strategy. B. Global strategies keyed either to low-cost or differentiation. C. Cross-border transfer strategies and home-field advantage strategies. D. Using strategic alliances and joint ventures with foreign competitors as the primary vehicles for entering and competing in foreign markets. E. A transnational strategy.

Cross-border transfer strategies and home-field advantage strategies.

The task of effectively communicating the strategic vision is made easier by

capturing the essence of the vision in a catchy slogan or brief phrase and then using it repeatedly as a reminder of "where we are going and why"

When an industry member is a major customer of the supplier, and the relationship (partnership) is unusually effective and mutually advantageous: A. it is rare for such partnerships to have much competitive impact on those industry members not having such partnerships. B. one unfortunate outcome is that it tends to give the supply partners much enhanced bargaining power in their dealings with these industry members. C. there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers. D. there is a high likelihood of such partnerships reducing competitive pressures on ALL industry members, provided technological change in the suppliers' business is rapid and the item being supplied is a commodity. E. the usual result is to reduce competitive pressures on all industry members, provided the costs of the items furnished by supply chain partners amount to 50 percent or more of total cost.

C. there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers.

When one or more industry members have unusually effective and mutually advantageous partnerships with their suppliers, A. it is rare for such partnerships to have much competitive impact on those industry members not having such partnerships. B. one unfortunate outcome is that it tends to give the supply partners much enhanced bargaining power in their dealings with these industry members. C. there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers. D. there is a high likelihood of such partnerships reducing competitive pressures on all industry members, provided technological change in the suppliers' business is rapid and the item being supplied is a commodity. E. the usual result is to reduce competitive pressures on all industry members, provided the costs of the items furnished by supply chain partners amount to 50% or more of total cost.

C. there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers.

45. The big issue an acquisition-minded firm must consider is whether strategically: ␣ ␣

C. to pay a premium price for a successful local company or to buy a struggling firm at a discount price.

The big issue an acquisition-minded firm must consider is whether: A. to acquire the firm at a price that cannot recapture the investment. B. to require the acquired firm's resources and management capability to sustain the ongoing struggling operation. C. to pay a premium price for a successful local company or to buy a struggling firm at a discount price. D. to pay a price that builds in all the synergistic advantages to the acquired firm. E. to pay a very high premium price that sends a signal to the market that the new firm has arrived.

C. to pay a premium price for a successful local company or to buy a struggling firm at a discount price.

Sometimes it makes sense for a company to go on the offensive to improve its market position and business performance. The best offensives tend to incorporate the following EXCEPT: A. focusing relentlessly on building a competitive advantage. B. applying resources where rivals are least able to defend themselves. C. using a strategic offense to allow the company to leverage its weaknesses to strengthen operating vulnerabilities. D. employing the elements of surprise as opposed to doing what rivals expect and are prepared for. E. displaying a strong bias for swift, decisive, and overwhelming actions to overpower rivals.

C. using a strategic offense to allow the company to leverage its weaknesses to strengthen operating vulnerabilities.

116.The basic strategy options for local companies in competing against global challengers include: ␣ ␣

C. utilizing understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals.

The basic strategy options for local companies in competing against global challengers include: A. best-cost provider and focused low-cost provider and low-cost leadership strategies. B. export strategies, licensing strategies, and cross-border transfer strategies. C. utilizing understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals. D. franchising strategies, multidomestic strategies keyed to product superiority, global low-cost leadership strategies, and cross-border coordination strategies. E. focused differentiation and broad differentiation strategies.

C. utilizing understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals.

Two analytical tools useful in determining whether a company's prices and costs are competitive are A. SWOT analysis and key success factor analysis. B. SWOT analysis and benchmarking. C. value chain analysis and benchmarking. D. competitive position assessment and competitive strength assessment. E. driving forces analysis and SWOT analysis.

C. value chain analysis and benchmarking.

Two analytical tools useful in determining whether a company's prices and costs are competitive are: A. SWOT analysis and key success factor analysis. B. SWOT analysis and benchmarking. C. value chain analysis and benchmarking. D. competitive position assessment and competitive strength assessment. E. driving forces analysis and SWOT analysis.

C. value chain analysis and benchmarking.

A higher company's overall weighted strength rating does not signal A. greater implied net competitive advantage B. stronger overall competitiveness versus rivals. C. weaker overall competitiveness versus rivals. D. possession of competitive advantage. E. None of these.

C. weaker overall competitiveness versus rivals.

What supports competitive offensives in one market with resources and profits diverted from operations in another market? A. Cross-market subsidization. B. A foreign market strategy. C. A domestic-only company. D. A home market offensive. E. A multidomestic company.

Cross-market subsidization.

Which of the following can aid industries in identifying key success factors?

Crucial product attributes and service characteristics

Alliance management is considered an organizational capability and:

develops over time, out of effort and learning.

The biggest and most important differences among the competitive strategies of different companies boil down to: A. how they go about building a brand name image that buyers trust and whether they are a risk-taker or risk-avoider. B. the different ways the companies try to cope with the five competitive forces. C. whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation. D. the kinds of actions companies take to improve their competitive assets and reduce their competitive liabilities. E. the relative emphasis they place on offensive versus defensive strategies.

C. whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation.

38. Which of the following is false as concerns use of an export strategy to compete in foreign markets? ␣ ␣

C..An export strategy is especially well suited to accommodating the different needs and preferences of buyers in different countries.

69. A "think local, act local" multidomestic type of strategy: ␣ ␣

C.becomes more appealing the bigger the country-to-country differences in buyer tastes, cultural traditions, and market conditions.

Which of the following do NOT qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?

Changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration

Which one of the following is not an integral part of the managerial process of crafting and executing strategy?

Choosing a strategic intent

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true? A. Fluctuating exchange rates do not pose significant risks to a company's competitiveness in foreign markets. B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Companies that are manufacturing goods in a particular country and are exporting much of what they produce are disadvantaged when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. D. Companies that are manufacturing goods in a particular country and are exporting much of what they produce are benefited when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. E. Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

Companies that are manufacturing goods in a particular country and are exporting much of what they produce are benefited when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to.

Which one of the following is not a characteristic of an effectively-worded strategic vision statement (see Table 2.2)?

Concrete and unambiguous (leaves no doubt as to what the company is trying to accomplish for shareholders)

Which of the following is not a characteristic of an effectively-worded strategic vision statement?

Consensus-driven (commits the company to a "mainstream" directional path that almost all stakeholders will enthusiastically support)

Which one of the following is NOT a characteristic of an effectively worded strategic vision statement?

Consensus-driven (commits the company to a "mainstream" directional path that almost all stakeholders will enthusiastically support)

Competing in the markets of foreign countries generally does NOT involve which of the following? A. Country-to-country differences in consumer buying habits and buyer tastes and preferences. B. Country-to-country variations in host government restrictions and requirements and fluctuating exchange rates. C. Whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide. D. In which countries to locate company operations for maximum locational advantage, given country-to-country variations in wage rates, worker productivity, energy costs, tax rates, and the like. E. Crafting a multidomestic strategy that works just as well in one country as in another and that also has the appeal of turning the world market into a mostly homogeneous market.

Crafting a multidomestic strategy that works just as well in one country as in another and that also has the appeal of turning the world market into a mostly homogeneous market.

3. Identify and explain four actions that top executives can take that are key elements in directing organizational action and building capabilities behind the drive for good strategy execution to meet or beat performance targets. Give examples.

Creating a strategy-supporting structure Staffing the organization to provide needed skills and expertise. Allocating ample resources to activities critical to good strategy execution. Developing and strengthening strategy-supporting resources and capabilities. Ensuring that policies and procedures facilitate rather than impede effective execution. Organizing the work effort along the lines of best practice. Installing information and operating systems that enable company personnel to perform essential activities. Motivating and Tying rewards and incentives directly to the achievement of performance objectives. Creating a company culture conducive to successful strategy execution. Exerting the internal leadership needed to propel implementation forward.

21. A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets: ␣ ␣

D becomes more competitive in foreign markets when the U.S. dollar declines in value against the . currenciesofthecountriestowhichitisexporting.

Which of the following conditions generally raise the barriers to entering an industry? A) Low levels of brand loyalty on the part of customers and the presence of more than 20 rivals in the industry B) Rapid market growth, low buyer switching costs, and weak brand preferences and customer loyalty C) Product offerings that are pretty much standardized from rival to rival D) High capital requirements, and difficulties in building a network of distributors-retailers and securing adequate space on retailers' shelves, E) The industry is not characterized by scale economies and/or sizable learning/experience curve effects and few firms in the industry hold key patents and/or possess significant proprietary technology not readily available to a newcomer

D) High capital requirements, and difficulties in building a network of distributors-retailers and securing adequate space on retailers' shelves,

Which of the following is not an important factor for company managers to consider in drawing conclusions about whether the industry presents an attractive opportunity? A) Whether powerful competitive forces are squeezing industry profitability to subpar levels and whether competition appears destined to grow stronger or weaker B) The industry's growth potential and the degree of uncertainty and risk in the industry's future C) Whether industry profitability will be affected favorably or unfavorably by the prevailing driving forces D) How many of the industry's key success factors do companies in the industry typically incorporate into their strategies E) The company's ability to capitalize on the vulnerabilities of weakly positioned rivals and whether the company has sufficient competitive strength to defend against or counteract the factors that make the industry unattractive

D) How many of the industry's key success factors do companies in the industry typically incorporate into their strategies

The options for attacking the high costs of items purchased from suppliers does not include which one of the following? A) Pressuring suppliers for more favorable prices B) Integrating backward into the business of high-cost suppliers and making the item in-house so as to better control the cost C) Switching to lower priced substitute inputs D) Raising prices to customers (so as to cover the high costs) E) Collaborating closely with suppliers to identify mutual cost-saving opportunities

D) Raising prices to customers (so as to cover the high costs)

Which one of the following is not a good indicator of how well a company's present strategy is working? A) Whether its sales are growing faster than, slower than, or about the same pace as the market as a whole, thus resulting in a rising, falling, or stable market share. B) How well the company stacks up against rivals on such factors as technology, product quality, customer service, product innovation, delivery time, speed in getting new products to market, and other factors on which buyers base their choice of brands C) Whether the firm's profit margins are increasing or decreasing and how well its margins compare to rival firms' margins D) Whether the company's resource strengths and competitive capabilities outnumber its resource weaknesses and competitive vulnerabilities E) The firm's image and reputation with its customers and whether the company's overall financial strength and credit rating are improving or on the decline

D) Whether the company's resource strengths and competitive capabilities outnumber its resource weaknesses and competitive vulnerabilities

Which of the following is not a factor in determining whether the suppliers to an industry are a source of strong, moderate, or weak competitive pressures? A) Whether certain needed inputs are in short supply and whether the item being supplied is a standard commodity that is readily available from many suppliers at the going market price B) Whether it is difficult or costly for industry members to switch their purchases from one supplier to another or to switch to attractive substitute inputs C) Whether industry members are major customers of suppliers and whether suppliers' sales to members of this one industry constitute a big percentage of their total sales D) Whether the industry supply chain is global or mostly national, whether suppliers have a wide or narrow product line, and whether industry members place orders frequently or infrequently with suppliers E) Whether certain suppliers provide a differentiated input that enhances the performance or quality of the industry's product

D) Whether the industry supply chain is global or mostly national, whether suppliers have a wide or narrow product line, and whether industry members place orders frequently or infrequently with suppliers

The rivalry among competing sellers in an industry intensifies A) when buyer demand for the product is growing rapidly. B) when customers are brand loyal and their costs to switch to competing brands or substitute products are relatively high. C) when buyer demand is strong and sellers have little or no excess capacity and only minimal inventories. D) as the number of rivals increases and as they become more equal in size and competitive capability. E) when the products of rival sellers are highly differentiated products and the industry consists of so many rivals that any one company's actions have little direct impact on rivals' business.

D) as the number of rivals increases and as they become more equal in size and competitive capability.

113.Which of the following is NOT a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets?

D. Develop a strategy for the short-term and forget about a long-term strategy because conditions in . emerging country markets change so rapidly.

A company's business model:

is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit.

A strategic group map is a helpful analytical tool for A) assessing why competitive pressures and driving forces usually impact the biggest strategic groups more so than the smaller groups. B) determining which companies have how big a competitive advantage and how good their prospects are for increasing their market shares. C) determining which company is the most profitable in the industry and why it is doing so well. D) determining who competes most closely with whom; evaluating whether industry driving forces and competitive pressures favor some strategic groups and hurt others; and ascertaining whether the profit potential of different strategic groups varies due to the strengths and weaknesses in each group's respective market positions. E) pinpointing which of the five competitive forces is the strongest and which is the weakest.

D) determining who competes most closely with whom; evaluating whether industry driving forces and competitive pressures favor some strategic groups and hurt others; and ascertaining whether the profit potential of different strategic groups varies due to the strengths and weaknesses in each group's respective market positions.

Strategic group mapping is a helpful analytical tool for A) assessing why competitive pressures and driving forces usually impact the biggest strategic groups more so than the smaller groups. B) determining which companies have how big a competitive advantage and how good their prospects are for increasing their market shares. C) determining which company is the most profitable in the industry and why it is doing so well. D) revealing the market positions of key industry competitors. E) pinpointing which of the five competitive forces is the strongest and which is the weakest.

D) revealing the market positions of key industry competitors.

Whether the buyers of an industry's product have strong or weak bargaining leverage over the terms and conditions of sale depends on A) how often that sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently. B) the frequency with which rival firms change strategies and the amount of advertising that sellers utilize. C) whether all buyers have the same degree of negotiating power, whether the item carries a high or low price tag, and whether there are many or few collaborative partnerships between sellers and buyers. D) whether buyers purchase in relatively large or small quantities, and how well informed buyers are about sellers' prices, products, and costs. E) whether buyer demand is seasonal or year-round, whether entry barriers are high or low, and whether competitive pressures from substitutes are strong or weak.

D) whether buyers purchase in relatively large or small quantities, and how well informed buyers are about sellers' prices, products, and costs.

Different companies across different industries adopt any one of the five generic strategies to gain competitive advantage. Which of the following is most likely to use a low-cost provider strategy? A. A fashion clothing line uses sought-after designers and natural fabrics. B. A mortgage company specializes in lending money for second homes. C. An online retailer delivers organic groceries overnight. D. A baby products retailer sells unassembled baby furniture produced in China. E. A dairy products manufacturer uses exotic substitutes to produce lactose-free dairy products.

D. A baby products retailer sells unassembled baby furniture produced in China.

A middle-class customer (target) base in a region is most concerned with quality and price of products. Which of the following would be considered a best value proposition for the customers? A. A company that identifies unique features of its products without comparing it with a rival's products B. A company that offers copycat products at low cost but an average quality compared to rivals C. A company that offers the same quality of products as rivals but at a high cost based on greater market share and higher brand value D. A company that provides same quality of products at a much lower price than rivals, but leaves the final assembly of product pieces to customers with an easy assembly guide E. A company that sells an average quality product compared to rivals with a meager difference in price.

D. A company that provides same quality of products at a much lower price than rivals, but leaves the final assembly of product pieces to customers with an easy assembly guide

Which of the following statements about a company's strategy is true? A. A company's strategy is mostly hidden to outside view and is deliberately kept under wraps by top-level managers (so as to catch rival companies by surprise when the strategy is launched). B. A company's strategy is typically planned well in advance and usually deviates little from the planned set of actions and business approaches because of the risks of making on-the-spot changes. C. A company's strategy generally changes very little over time unless a newly appointed CEO decides to take the company in a new direction with a new strategy. D. A company's strategy is typically a blend of proactive and reactive strategy elements. E. A company's strategy is developed mostly on the fly because of the constant efforts of managers to come up with fresh moves to keep the company's product offering clearly different and set apart from the product offerings of rival companies.

D. A company's strategy is typically a blend of proactive and reactive strategy elements.

BloomsJay Resorts Inc. has multiple tropical resorts in various locations. In a crowded market that caters to all kinds of consumers, this resort caters mainly to gays with guaranteed hassle-free holiday experience at a premium price. What strategy is BloomsJay using to gain competitive advantage? A. A low-cost provider strategy B. A broad differentiation strategy C. A focused low-cost strategy D. A focused differentiation strategy E. A best-cost provider strategy

D. A focused differentiation strategy

Why is it important to craft a business model? A. Because it sets forth management's game plan for maximizing profits for shareholders B. Because it details exactly how management's strategy will result in the achievement of the company's strategic intent C. Because it is a part of an operating model that focuses on delivering excellence and creating value for external shareholders and internal labor force D. Because it sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner E. Because it sets forth management's long-term action plan to match the business standards set by formidable rivals

D. Because it sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner

19. Which of the following is NOT a typical host government requirement that affects the operations of foreign companies? ␣

D. Requiring foreign companies to use vertical integration to support operations of local companies.

Which of the following questions tests the merits of the firm's strategy and distinguishes it as a winning strategy? A. Is the company's strategy ethical and socially responsible and does it put enough emphasis on good product quality and good customer service? B. Is the company putting too little emphasis on growth and profitability and too much emphasis on behaving in an ethical and socially responsible manner? C. Is the strategy resulting in the development of additional competitive capabilities? D. Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?

D. Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?

It is normal for a company's strategy to end up being: A. a blend of offensive actions on the part of managers to improve the company's profitability and defensive moves to counteract changing market conditions. B. a combination of conservative moves to protect the company's market share and somewhat more risky initiatives to set the company's product offering apart from rivals. C. a close imitation of the strategy employed by the recognized industry leader. D. a blend of proactive actions to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions. E. more a product of clever entrepreneurship than of efforts to clearly set a company's product/service offering apart from the offerings of rivals.

D. a blend of proactive actions to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions.

To improve performance, there are many different avenues for outcompeting rivals such as: A. realizing a higher cost structure and lower operating profit margins than rivals in order to drive sales growth. B. creating products analogous with competitors so as to be competitive in the same markets. C. pursuing similar personalized customer service or quality dimensions as rivals. D. confining operations to local or regional markets or developing product superiority or concentrating on a narrow product lineup.

D. confining operations to local or regional markets or developing product superiority or concentrating on a narrow product lineup.

The objectives of a well-crafted strategy require management to strive to: A. match rival businesses' products and quality dimensions in the marketplace. B. build profits for short-term success. C. realign the market to provoke change in rival companies. D. develop lasting success that can support growth and secure the company's future over the long term. E. re-create their business models regularly.

D. develop lasting success that can support growth and secure the company's future over the long term.

The pattern of actions and business approaches that would NOT define a company's strategy include actions to: A. strengthen market standing and competitiveness by acquiring or merging with other companies. B. strengthen competitiveness via strategic coalitions and partnerships. C. upgrade competitively important resources and capabilities. D. gain sales and market share with lower prices despite increased costs. E. strengthen the firm's bargaining position with suppliers and distributors.

D. gain sales and market share with lower prices despite increased costs.

What separates a powerful strategy from a run-of-the-mill or ineffective one is: A. the ability of the strategy to keep the company profitable. B. the proven ability of the strategy to generate maximum profits. C. the speed with which it helps the company achieve its strategic vision. D. management's ability to forge a series of actions, both in the marketplace and internally, that sets the company apart from rivals, and produces sustainable competitive advantage. E. whether it allows the company to maximize shareholder value in the shortest possible time.

D. management's ability to forge a series of actions, both in the marketplace and internally, that sets the company apart from rivals, and produces sustainable competitive advantage.

In crafting a company's strategy, managers: A. face the biggest challenge of how closely to replicate strategies of successful companies in the industry. B. have comparatively little freedom in choosing the "hows" of strategy. C. are wise not to decide on concrete courses of action in order to preserve maximum strategic flexibility. D. need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals. E. are well-advised to be risk-averse and develop a "conservative" strategy—"dare-to-be-different" strategies are rarely successful.

D. need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals.

The customer value proposition lays out the company's approach to: A. meeting profitability guidelines without the risk of losing customers. B. operating efficiently given the current level of customers. C. embracing rival company approaches to gaining customers. D. satisfying customer wants and needs at a price customers will consider a good value. E. assuring that the company makes enough profits based on its per-unit cost.

D. satisfying customer wants and needs at a price customers will consider a good value.

The difference between a company's strategy and a company's business model is that: A. a company's strategy is management's game plan for achieving strategic objectives while its business model is management's game plan for achieving financial objectives. B. the strategy concerns how to compete successfully and the business model concerns how to operate efficiently. C. a company's strategy is management's game plan for realizing the strategic vision, whereas a company's business model is the game plan for accomplishing its corporate responsibility goals. D. strategy relates broadly to a company's competitive moves and business approaches while its business model relates to whether the revenues flowing from the strategy are sufficient to cover costs and realize a profit. E. a company's strategy is solely concerned with how to please customers while its business model is solely concerned with how to please shareholders.

D. strategy relates broadly to a company's competitive moves and business approaches while its business model relates to whether the revenues flowing from the strategy are sufficient to cover costs and realize a profit.

What two factors inhibit the ability of rivals to imitate a firm's most valuable resources and capabilities? A. Social ambiguity and causal uncertainty B. Social simplicity and causal complexity C. Collective complexity and causal ambiguity D. Social complexity and causal ambiguity E. Social simplicity and causal uncertainty

D. Social complexity and causal ambiguity

A company's strategy is a "work in progress" and evolves over time because of: A. the importance of developing a fresh strategic plan every year that keeps employees from becoming bored with executing the same strategy year after year. B. the ongoing need to imitate the new strategic moves of the industry leaders. C. the need to make regular adjustments in the company's strategic vision. D. the ongoing need of company managers to react and respond to changing market and competitive conditions. E. the frequent need to modify key elements of the company's business model.

D. the ongoing need of company managers to react and respond to changing market and competitive conditions.

An automotive manufacturer sells a limited number of high-end, custom-built cars, using technologically advanced power systems. What strategy is the manufacturer using to gain competitive advantage? A. A low-cost provider strategy B. A broad differentiation strategy C. A focused low-cost strategy D. A focused differentiation strategy E. A best-cost provider strategy

D. A focused differentiation strategy

81. Which of the following does NOT accurately characterize the differences between a localized multidomestic strategy and a global strategy? ␣

D. A global strategy involves striving to be the global low-cost provider by economically producing and . marketing a mostly standardized product worldwide, whereas a multidomestic strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries.

Which of the following does NOT accurately characterize the differences between a localized multidomestic strategy and a global strategy? A. A global strategy entails extensive strategy coordination across countries and a multidomestic strategy entails little or no strategy coordination across countries. B. A global strategy often entails use of the best suppliers from anywhere in the world, whereas a multidomestic strategy may entail fairly extensive use of local suppliers (especially where use of local sources is required by host governments). C. A global strategy tends to involve use of similar distribution and marketing approaches worldwide, whereas a multidomestic strategy often entails adapting distribution and marketing to local customs and the culture of each country. D. A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide, whereas a multidomestic strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries. E. A global strategy relies upon the same technologies, competencies, and capabilities worldwide, whereas a multidomestic strategy often entails the use of somewhat different technologies, competencies, and capabilities as may be needed to accommodate local buyer tastes, cultural traditions, and market conditions.

D. A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide, whereas a multidomestic strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries.

50. Which of the following is NOT a potential benefit of cross-border strategic alliances or other cooperative arrangements between foreign and domestic companies?

D. A greater ability to employ a global strategy (as opposed to a multicountry strategy).

Which of the following is NOT one of the four basic routes to achieving a differentiation-based competitive advantage? A. Delivering value to customers via the company's resources, competencies, and value chain activities that rivals don't have or can't afford to match and are well-matched to the requirements of the strategy B. Incorporating tangible features that raise product performance and increase customer satisfaction with the product C. Incorporating product attributes and user features that lower the buyer's overall costs of using the company's product D. Appealing to buyers who are sophisticated and shop hard for the best, stand-out differentiating attributes E. Incorporating features that enhance buyer satisfaction in intangible or noneconomic ways

D. Appealing to buyers who are sophisticated and shop hard for the best, stand-out differentiating attributes

24. Which of the following is not an analytical tool for revealing a company's competitiveness and for helping to match the strategy to the company's own particular circumstances? A. Resource and capability analysis B. SWOT analysis C. Value chain analysis D. Bench-pressing analysis E. Competitive strength analysis

D. Bench-pressing analysis

Which of the following is NOT an analytical tool for revealing a company's competitiveness and for helping to match the strategy to the company's own particular circumstances? A. Resource and capability analysis B. SWOT C. Value chain analysis D. Best practice concept E. Competitive strength analysis

D. Best practice concept

28. Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true? ␣

D. Companies that are manufacturing goods in a particular country and are exporting much of what they . produce are benefited when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to.

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true? A. Fluctuating exchange rates do not pose significant risks to a company's competitiveness in foreign markets. B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Companies that are manufacturing goods in a particular country and are exporting much of what they produce are disadvantaged when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. D. Companies that are manufacturing goods in a particular country and are exporting much of what they produce are benefited when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. E. Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

D. Companies that are manufacturing goods in a particular country and are exporting much of what they produce are benefited when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to.

Which of the following is NOT a common shortcoming when wording a company's vision statement? When the statement is somewhat

flexible—allowing for adjustments to reflect changing circumstances.

Which of the following is NOT a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets? A. Prepare to compete on the basis of low price. B. Modify aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding). C. Change the local market to better match the way the company does business elsewhere. D. Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly. E. Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances.

D. Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly.

Which of the following is NOT a risk of cross-border alliances between domestic and foreign firms? A. Overcoming language and cultural barriers B. Launching new initiatives to stay abreast of shifting market conditions C. Developing mutually agreeable ways of dealing with key issues or differences D. Disengaging from the alliance once its purpose has been served E. Becoming overly dependent on foreign partners for essential expertise

D. Disengaging from the alliance once its purpose has been served

Which of the following is NOT one of the benefits of outsourcing value chain activities presently performed in-house? A. Streamlines company operations in ways that improve organizational flexibility and cuts the time it takes to get new products into the marketplace B. Allows a company to concentrate on its core business, leverage its key resources, and do even better what it already does best C. Helps the company assemble diverse kinds of expertise speedily and efficiently D. Enables a company to gain better access to end users and better market visibility E. Improves a company's ability to innovate

D. Enables a company to gain better access to end users and better market visibility

Which of the following does NOT represent a potential core competence? A. Skills in manufacturing a high-quality product at a low cost B. Know-how in creating and operating systems for cost-efficient supply chain management C. The capability to fill customer orders accurately and swiftly D. Having a sprawling factory E. The capability to speed new or next-generation products to the marketplace

D. Having a sprawling factory

Which of the following does not represent a potential core competence? A. Skills in manufacturing a high-quality product at a low cost B. Know-how in creating and operating systems for cost-efficient supply chain management C. The capability to fill customer orders accurately and swiftly D. Having a wider product line than rivals E. The capability to speed new or next-generation products to the marketplace

D. Having a wider product line than rivals

Which of the following is not a factor to consider in identifying an industry's dominant economic features? A. The market size, growth rate and prospects B. The scope of competitive rivalry including geographic area C. The market demand-supply conditions D. How strong driving forces and competitive forces are E. The role and pace of technological change

D. How strong driving forces and competitive forces are

Which of the following is NOT something that can be gleaned from a company's SWOT? A. How to improve a company's strategy by using company strengths and capabilities as cornerstones for its strategy B. Which market opportunities are best suited to a company's strengths and capabilities C. Which resource weaknesses and deficiencies need to be corrected so as to better enable the pursuit of important market opportunities and to better defend against certain external threats D. How to turn a core competence into a distinctive competence E. Whether any of the company's resource strengths can be used to help lessen the impact of external threats

D. How to turn a core competence into a distinctive competence

Which one of the following is not something that can be gleaned from identifying a company's resource strengths, resource weaknesses, market opportunities, and external threats? A. How to improve a company's strategy by using company strengths and capabilities as cornerstones for its strategy B. Which market opportunities are best suited to a company's strengths and capabilities C. Which resource weaknesses and deficiencies need to be corrected so as to better enable the pursuit of important market opportunities and to better defend against certain external threats D. How to turn a core competence into a distinctive competence E. Whether any of the company's resource strengths can be used to help lessen the impact of external threats

D. How to turn a core competence into a distinctive competence

23. Which of the following is NOT accurate as concerns the task of identifying the strategic issues and problems that merit front-burner managerial attention? A. It entails drawing upon the results and conclusions from analyzing the company's external environment. B. It entails drawing on the results and conclusions from evaluating the company's own resources and competitive position. C. It entails developing a "worry list" of "how to...," "whether to...," and "what to do about..." D. Identifying the strategic issues and problems that the company faces is the first thing that company managers need to do before starting to analyze the company's internal and external environment. E. Developing a list of issues and problems that management need to address (and to resolve) should always precede deciding upon a strategy and what actions to take to improve the company's position and prospects.

D. Identifying the strategic issues and problems that the company faces is the first thing that company managers need to do before starting to analyze the company's internal and external environment.

Which of the following is NOT accurate as concerns the task of identifying the strategic issues and problems that merit front-burner managerial attention? A. It entails drawing upon the results and conclusions from analyzing the company's external environment. B. It entails drawing on the results and conclusions from evaluating the company's own resources and competitive position. C. It entails developing a "worry list" of "how to...," "whether to...," and "what to do about..." D. Identifying the strategic issues and problems that the company faces is the first thing that company managers need to do before starting to analyze the company's internal and external environment. E. Developing a list of issues and problems that management need to address (and to resolve) should always precede deciding upon a strategy and what actions to take to improve the company's position and prospects.

D. Identifying the strategic issues and problems that the company faces is the first thing that company managers need to do before starting to analyze the company's internal and external environment.

Which of the following is not accurate as concerns the task of identifying the strategic issues and problems that merit front-burner managerial attention? A. It entails drawing upon the results and conclusions from analyzing the company's external environment. B. It entails drawing on the results and conclusions from evaluating the company's own resources and competitive position. C. It entails developing a "worry list" of "how to...," "whether to....," and "what to do about....." D. Identifying the strategic issues and problems that the company faces is the first thing that company managers need to do before starting to analyze the company's internal and external environment. E. Developing a list of what issues and problems that managements need to address (and to resolve) should always precede deciding upon a strategy and what actions to take to improve the company's position and prospects.

D. Identifying the strategic issues and problems that the company faces is the first thing that company managers need to do before starting to analyze the company's internal and external environment.

64. Which of the following statements regarding global competition is false? ␣ ␣

D. In global competition, there's more cross-country variation in industry conditions and competitive . forces than there is in industries where multidomestic competition prevails.

Which of the following statements regarding global competition is false? A. In global competition, rivals vie for worldwide market leadership. B. In globally competitive industries, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets. C. In global competition, a firm's overall competitive advantage (or disadvantage) grows out of its entire worldwide operations. D. In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails. E. In global competition, many of the same rival companies compete against each other in many different countries, but especially so in countries where sales volumes are large and where having a competitive presence is strategically important to building a strong global position in the industry.

D. In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails.

Which one of the following is not a common type of driving force? A. Entry or exit of major firms B. Changing societal concerns, attitudes, and lifestyles C. Diffusion of technical know-how across more companies and more countries D. Increasing efforts on the part of industry members to collaborate closely with their suppliers E. Technological change and manufacturing process innovation

D. Increasing efforts on the part of industry members to collaborate closely with their suppliers

Which one of the following is NOT a common type of driving force? A. Reductions in uncertainty and business risk B. Changing societal concerns, attitudes, and lifestyles C. Diffusion of technical know-how across companies and countries D. Increasing efforts to collaborate closely with suppliers E. Advances in technology and manufacturing process innovation

D. Increasing efforts to collaborate closely with suppliers

Which of the following are most UNLIKELY to qualify as driving forces? A. Changes in the long-term industry growth rate, the entry or exit of major firms, and changes in cost and efficiency B. Increasing globalization of the industry and product innovation C. New Internet technology applications, new government regulations, and significant changes in government policy toward the industry D. Increasing efforts to collaborate with suppliers via strategic alliances and partnerships, escalating risk levels and normalization of cost and efficiency in the industry E. Marketing innovations and changes in who buys the industry's product and how they use it

D. Increasing efforts to collaborate with suppliers via strategic alliances and partnerships, escalating risk levels and normalization of cost and efficiency in the industry

Which of the following is not an option for remedying a cost disadvantage associated with activities performed by forward channel allies (wholesale distributors and retail dealers)? A. Shifting to a more economical distribution strategy such as putting more emphasis on cheaper distribution channels (perhaps direct sales via the Internet) or perhaps integrating forward into company-owned retail outlets B. Trying to make up the difference by cutting costs earlier in the value chain C. Pressuring distributors-dealers and other forward channel allies to reduce their costs and markups so as to make the final price to buyers more competitive with the prices of rivals D. Insisting 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 E. Working closely with forward channel allies to identify win-win opportunities to reduce costs

D. Insisting 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

Which of the following is NOT an option for remedying a cost disadvantage associated with activities performed by forward channel allies (wholesale distributors and retail dealers)? A. Changing to a more economical distribution strategy such as putting more emphasis on cheaper distribution channels (perhaps direct sales via the Internet) or perhaps integrating forward into company-owned retail outlets B. Enhancing differentiation through activities such as cooperative advertising at the forward end of the value chain C. Pressuring distributors/dealers and other forward-channel allies to reduce their costs and markups D. Insisting 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 E. Collaborating with forward channel allies to identify win-win opportunities to reduce costs

D. Insisting 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

111.What can happen when international rivals compete against one another in multiple-country markets? ␣ ␣

D. It could initiate a deterrence effect that encourages mutual restraint in taking aggressive action against . one another due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war.

What two factors inhibit the ability of rivals to imitate a firm's most valuable resources and capabilities? A. Social ambiguity and causal uncertainty. B. Social simplicity and causal complexity. C. Collective complexity and causal ambiguity. D. Social complexity and causal ambiguity. E. Social simplicity and causal uncertainty.

D. Social complexity and causal ambiguity.

What can happen when international rivals compete against one another in multiple-country markets? A. It could create attractive industries that would have otherwise badly deteriorated. B. It could produce a business lineup consisting of too many slow-growth, declining, low-margin, or competitively weak businesses. C. It could create a greater diversity in the types of value chain activities between each business. D. It could initiate a deterrence effect that encourages mutual restraint in taking aggressive action against one another due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war. E. It could increase shareholder interests by concentrating corporate resources on foreign business activities to contend for market leadership.

D. It could initiate a deterrence effect that encourages mutual restraint in taking aggressive action against one another due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war.

74. What is a primary drawback of a localized multidomestic strategy? ␣ ␣

D. It hinders the transfer of a company's competencies and resources across country boundaries and hinders . the pursuit of a single, uniform competitive advantage in all country markets where a company operates.

What is a primary drawback of a localized multidomestic strategy? A. It hinders the use of cross-border coordination of a company's activities and increases a company's vulnerability to adverse shifts in currency exchange rates. B. It makes it very difficult to take into account significant country-to-country differences in distribution channels and marketing methods. C. It makes it difficult and costly to be responsive to country-to-country differences in customer needs, buying habits, cultural traditions, and market conditions. D. It hinders the transfer of a company's competencies and resources across country boundaries and hinders the pursuit of a single, uniform competitive advantage in all country markets where a company operates. E. It is unsuitable for competing in the markets of emerging countries and posing added difficulty in modifying a company's business model to compete on the basis of low price.

D. It hinders the transfer of a company's competencies and resources across country boundaries and hinders the pursuit of a single, uniform competitive advantage in all country markets where a company operates.

Which one of the following pairs of variables is LEAST likely to be useful in drawing a strategic group map? A. Geographic market scope and degree of vertical integration B. Brand name reputation and distribution channel emphasis C. Product quality and product-line breadth D. Level of profitability and size of market share E. Price/perceived quality and image range and the extent of buyer appeal

D. Level of profitability and size of market share

91. Companies that compete internationally can pursue competitive advantage in world markets (or offset domestic disadvantages) by:

D. Locating value chain activities in whatever nations prove most advantageous in a manner that uses . location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination.

Which one of the following does NOT cause the rivalry among competing sellers to be weak? A. High buyer switching costs. B. Rapid growth in buyer demand. C. Industry conditions that tempt rivals to use price cuts or other competitive weapons to boost unit sales. D. Low barriers to entry. E. Strongly differentiated products among rival sellers.

D. Low barriers to entry.

51. Which of the following is NOT one of the problems and risks of cross-border alliances between domestic and foreign firms? ␣

D. Making it harder to pursue a multidomestic strategy as compared to a global strategy.

Which of the following are most unlikely to qualify as driving forces? A. Changes in the long-term industry growth rate, the entry or exit of major firms, and changes in cost and efficiency B. Increasing globalization of the industry and product innovation C. New Internet technology applications, new government regulations, and significant changes in government policy toward the industry D. Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances E. Changes in who buys the industry's product and how they use it

D. Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances

Which of the following is NOT generally a "driving force" capable of producing fundamental changes in industry and competitive conditions? A. Changes in the long-term industry growth rate B. Increasing globalization of the industry C. Product innovation and technological change D. Movement in the economy and in interest rates E. Regulatory influences and government policy changes

D. Movement in the economy and in interest rates

Which of the following is NOT a potential advantage of backward vertical integration? A. Reduced vulnerability to powerful suppliers (who may be inclined to raise prices at every opportunity) B. Reduced risks of disruptions in obtaining crucial components or support services C. Reduced costs D. Reduced business risk because of controlling a bigger portion of the overall industry value chain E. Increase in a company's differentiation capabilities and perhaps achieving a differentiation-based competitive advantage

D. Reduced business risk because of controlling a bigger portion of the overall industry value chain

Which of the following is an example of a cross-border alliance? A. Facebook took over WhatsApp for $19 billion in February 2014. B. Hyundai Motor Company plans to open a new manufacturing plant in the Czech Republic. C. The insurance company Geicois a wholly owned subsidiary of Berkshire Hathaway. D. Renault-Nissan sells more than one in ten cars worldwide. E. Carrefour, a French grocery chain, established a new wholly-owned venture in Poland.

D. Renault-Nissan sells more than one in ten cars worldwide.

Which of the following is NOT a typical host government requirement that affects the operations of foreign companies? A. Establishing local content requirement on goods made inside their borders by foreign companies B. Having rules and policies that protect local companies from foreign competition C. Placing restrictions on exports to ensure adequate local supplies D. Requiring foreign companies to use vertical integration to support operations of local companies E. Imposing burdensome tax structures and regulatory requirements upon foreign companies doing business within their borders

D. Requiring foreign companies to use vertical integration to support operations of local companies

A company's business model

is management's blueprint for how it will generate revenues sufficient to cover costs and yield an attractive profit.

Which of the following is not a factor to consider in identifying an industry's dominant economic features? A. Market size and growth rate B. The extent of backward and forward integration and buyer needs and requirements C. Whether the products or services of rival firms are becoming more or less differentiated D. Strength of driving forces and competitive forces E. The pace of technological change, scale economies and experience curve effects, and product innovation

D. Strength of driving forces and competitive forces

Greenfield ventures, like all market entry strategies can pose serious problems to achieving foreign market entry success. What is NOT deemed a barrier to success? A. Such ventures can require costly capital investments. B. Such ventures can have a tendency to divert valuable resources from current business. C. Such ventures really need well-functioning strong markets. D. Such ventures are the fastest entry route to achieve a sizeable market share. E. Such ventures require legal protections of foreign investors.

D. Such ventures are the fastest entry route to achieve a sizeable market share.

47. Greenfield ventures, like all market entry strategies can pose serious problems to achieving foreign market entry success. What is not deemed a barrier to success?

D. Such ventures require managerial talent experienced in getting new subsidiaries up and running.

Which of the following is NOT a factor to consider when identifying economic conditions in the macroenvironment? A. The movement and influence of exchange rates, the inflation rate and per capita domestic product on the industry B. The implications of trade deficits or surpluses on the macro-environment C. The strategically relevant general economic climate outside the firm's industry boundaries D. The combined strength of the competitive factors influencing the firm and their implications for strategic momentum and the moves and countermoves of rivals impacted by the economy at large E. Conditions in the markets for stocks and bonds, which can affect consumer confidence and discretionary income

D. The combined strength of the competitive factors influencing the firm and their implications for strategic momentum and the moves and countermoves of rivals impacted by the economy at large

Which one of the following provides the most accurate picture of whether a company is cost competitive with its rivals? A. How the costs of the company's internally performed activities (its own value chain) compare against the costs of the internally-performed activities of rival companies B. Costs in the value chains of the company's suppliers C. Costs in the value chains of a company's distributors and retail dealers and forward channel allies D. The costs of a company's internally performed activities, costs in the value chains of both the company's suppliers and forward channel allies, and how all these costs compare against the costs that make up the value chain systems employed by rival firms E. Whether the company has a longer or shorter value chain than its close rivals

D. The costs of a company's internally performed activities, costs in the value chains of both the company's suppliers and forward channel allies, and how all these costs compare against the costs that make up the value chain systems employed by rival firms

Which of the following is NOT a typical reason that many outsourcing alliances prove unstable or break apart? A. Anticipated gains may fail to materialize due to an overly optimistic view of the synergies. B. Anticipated gains may fail to materialize due to a poor fit in terms of the combination of resources and capabilities. C. A partner can gain access to a company's proprietary knowledge base, technologies, or trade secrets. D. The partners may disagree over how to divide the profits gained from joint collaboration. E. There is a risk of becoming dependent on other companies.

D. The partners may disagree over how to divide the profits gained from joint collaboration.

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

D. The range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses

Which of the following best describes the market opportunities that tend to be most relevant to a particular company? A. Those market opportunities that provide avenues for taking market share away from close rivals and enhance a company's image as a leader in product innovation and product quality. B. Those market opportunities that offer the company a chance to raise entry barriers. C. Those market opportunities that help promote greater diversification of revenues and profits. D. Those market opportunities that match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability, and present the most potential for competitive advantage. E. Those market opportunities that help correct a company's biggest weaknesses and competitive deficiencies.

D. Those market opportunities that match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability, and present the most potential for competitive advantage.

Which of the following is NOT a typical strategic objective or benefit that drives mergers and acquisitions? A. To gain quick access to new technologies or other resources and capabilities B. To create a more cost-efficient operation out of the combined companies C. To expand a company's geographic coverage D. To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy E. To extend a company's business into new product categories

D. To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy

Exxon Mobil enters into a pact with Gazprom, the world's largest natural gas extractor, to set up a processing unit in Moscow. Which of the following is most likely the reason for Exxon Mobil to opt for this strategic alliance? A. To gain access to new customers B. To scale back its core competencies C. To restrict its factors of production D. To gain access to low-cost inputs of production E. To better compete with Gasprom

D. To gain access to low-cost inputs of production

A much-used and potent managerial tool for determining whether a company performs particular functions or activities in a manner that represents "the best practice" when both cost and effectiveness are taken into account is: A. competitive strength analysis. B. activity-based costing. C. resource cost mapping. D. SWOT analysis. E. benchmarking.

E. benchmarking.

Which of the following is NOT a reason why a company decides to enter foreign markets? A. To spread business risk across a wider geographic market base B. To capitalize on company competencies and capabilities C. To achieve lower costs through economies of scale, experience, and increased purchasing power D. To impart technical knowledge to high-cost human resources in developing nations E. To gain access to more buyers for the company's products/services

D. To impart technical knowledge to high-cost human resources in developing nations

Televisa, a Mexican media company, became the world's most prolific producer of Spanish-language soap operas owing to its expertise in Spanish culture and linguistics. Which of the following strategies did Televisa employ to defend against global giants? A. Develop business models that exploit shortcomings in local distribution networks or infrastructure. B. Utilize keen understanding of local customer needs and preferences to create customized products or services. C. Take advantage of aspects of the local workforce with which large international companies may be unfamiliar. D. Transfer company expertise to cross-border markets and initiate actions to contend on an international level. E. Use acquisition and rapid-growth strategies to better defend against expansion-minded internationals.

D. Transfer company expertise to cross-border markets and initiate actions to contend on an international level.

Which of the following is not generally a "driving force" capable of producing fundamental changes in industry and competitive conditions? A. Changes in the long-term industry growth rate B. Increasing globalization of the industry C. Product innovation and technological change D. Ups and downs in the economy and in interest rates E. New government regulations or significant changes in government policy toward the industry

D. Ups and downs in the economy and in interest rates

The four tests of a resource's competitive power are often referred to as the: A. SCIR test, which asks if a resource is sustainable, competitive, internalized, and reproducible. B. competitive advantage sustainable method test. C. reliability resources simulation. D. VRIN test, which asks if a resource is valuable, rare, inimitable, and non-substitutable. E. organizational capability metric analysis.

D. VRIN test, which asks if a resource is valuable, rare, inimitable, and non-substitutable.

What is the primary target market for a best cost-provider? A. hunting buyers B. Price-conscious buyers C. Best-price driven buyers D. Value-conscious buyers E. Brand-conscious buyer

D. Value-conscious buyers

Which of the following is a condition that makes an internal startup strategy appealing over an acquisition? A. When an internal startup is more costly. B. When an internal startup affects the supply-demand balance by increasing production capacity C. When an internal startup is unable to gain distribution access advantages D. When an internal startup has the necessary scale and resource strengths to compete with rivals E. When an internal startup lacks the experience in establishing new subsidiaries

D. When an internal startup has the necessary scale and resource strengths to compete with rivals

In which of the following circumstances is a strategy to be the industry's overall low-cost provider NOT particularly well-matched to the market situation? A. When the offerings of rival firms are essentially identical and readily available from many eager sellers B. When there are few ways to achieve differentiation that have value to buyers C. When price competition among rival sellers is especially vigorous D. When buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high E. When the majority of industry sales are made to a few, large-volume buyers

D. When buyers have widely varying needs and special requirements, and the prices of substitute products are relatively high

In which of the following instances is being a first-mover NOT particularly advantageous? A. When moving first with a preemptive strike makes imitation difficult or unlikely B. When first-time buyers remain strongly loyal to pioneering firms in making repeat purchases C. When early commitments to new technologies, types of components, or emerging distribution channels produce an absolute cost advantage over rivals D. When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover E. When being a pioneer helps build a firm's image and reputation with buyers

D. When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover

Which one of the following does not cause the rivalry among competing sellers to be weak? A. High buyer switching costs B. Rapid growth in buyer demand C. Industry members aren't aggressive in drawing sales and market share away from rivals D. When one or more competitors become dissatisfied with their market position E. Strongly differentiated products among rival sellers

D. When one or more competitors become dissatisfied with their market position

In which of the following cases are late-mover advantages (or first-mover disadvantages) NOT likely to arise? A. When the costs of pioneering are much higher than being a follower and only negligible learning/experience benefits accrue to the pioneer B. When the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover C. When the pioneer's products are somewhat primitive and are easily bested by late movers D. When opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand E. When technological change is rapid and fast-following rivals find it easy to leapfrog the pioneer with next-generation products of their own

D. When opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand

48. Which of the following is one of the four conditions that make an internal startup strategy appealing over an acquisition?

D. When the internal startup will have the necessary scale and resource strengths to compete with rivals.

63. When is a think-local, act-local approach to strategy making appropriate? ␣ ␣

D. When the need for local responsiveness is high due to significant cross-country differences in . demographic, cultural, and market conditions and where benefits from standardization is limited.

Which one of the following questions is not pertinent to company managers in thinking strategically about their company's directional path and developing a strategic vision?

What business approaches and operating practices should we consider in trying to implement and execute our business model?

When is a think-local, act-local approach to strategy making appropriate? A. When the need for local responsiveness is minimal and when potential efficiency gains from standardization is unrestricted by cross-country opportunities B. When the local manager is intellectually savvy C. When the local market provides strong opportunity for growth and profitability D. When the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited E. When the need for centralized decision making is relevant due to various macroeconomic and market conditions

D. When the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited

Which of the following is NOT among the factors that affect whether competitive rivalry among participating firms is strong, moderate, or weak? A. Whether the products of rival sellers are strongly or weakly differentiated B. Whether demand for the industry's product is growing rapidly or slowly C.The degree to which rivals deploy whatever means it believes will attract and retain buyers, strengthen market position, and yield good profits D. Whether the industry's key driving forces yield firms in the industry with adequate profits are strong or weak E. Whether industry conditions tempt competitors to use price discounting or other competitive weapons to boost total sales volume and market share

D. Whether the industry's key driving forces yield firms in the industry with adequate profits are strong or weak

The difference between a company competence and a core competence is that A. a company competence refers to a company's best-executed functional strategy and a core competence refers to a company's best-executed business strategy. B. a company competence refers to a company's strongest resource whereas a core competence refers to a company's lowest-cost and most efficiently performed value chain activity. C. a company competence is a competitively relevant activity which a firm performs especially well relative to other internal activities, whereas a core competence is an activity that a company has learned to perform proficiently. D. a company competence represents real proficiency in performing an internal activity whereas a core competence is a competitively relevant activity which a firm performs better than other internal activities. E. a core competence usually resides in a company's technology and physical assets whereas a company competence usually resides in a company's human assets and intellectual capital.

D. a company competence represents real proficiency in performing an internal activity whereas a core competence is a competitively relevant activity which a firm performs better than other internal activities.

37. The difference between a company competence and a core competence is that: A. a company competence refers to a company's best-executed functional strategy, while a core competence refers to a company's best-executed business strategy. B. a company competence refers to a company's strongest resource, whereas a core competence refers to a company's lowest-cost and most efficiently performed value chain activity. C. a company competence is a competitively relevant activity that a firm performs especially well relative to other internal activities, whereas a core competence is an activity that a company has learned to perform proficiently. D. a company competence represents real proficiency in performing an internal activity, whereas a core competence is a competitively and strategically relevant activity. E. a core competence usually resides in a company's technology and physical assets, whereas a company competence usually resides in a company's human assets and intellectual capital.

D. a company competence represents real proficiency in performing an internal activity, whereas a core competence is a competitively and strategically relevant activity.

27. The difference between a resource and a capability is: A. a resource is a productive input or competitive asset, while a capability is the capacity of the firm to perform some internal activity competently. B. a resource is a reserve supply or back-up supply function, whereas a capability is the ability to manage the resource function. C. a resource is a mechanism used for carrying out some responsibility, while a capability possesses the qualities needed to do a particular thing. D. a resource is the firm's fixed assets, while a capability defines whether the firm is competent to perform some function. E. All of these.

D. a resource is the firm's fixed assets, while a capability defines whether the firm is competent to perform some function.

The best reason for investing company resources in vertical integration (either forward or backward) is to: A. expand into foreign markets and/or control more of the industry value chain. B. broaden the firm's product line and/or avoid the need for outsourcing. C. gain a first-mover advantage over rivals in revamping the industry value chain. D. add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability. E. achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain a greater ability to reduce internal operating costs.

D. add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.

26. The advantages of manufacturing goods in a particular country and exporting them to foreign markets: ␣

D. are weakened when that country's currency grows stronger relative to the currencies of the countries . where the output is being sold.

The advantages of manufacturing goods in a particular country and exporting them to foreign markets: A. are largely unaffected by fluctuating exchange rates. B. are greatest when local distributors and dealers in that country can be convinced not to carry products that are made outside the country's borders. C. can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold. D. are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E. are multiplied by the potential for local government officials to raise tariffs on the imports of foreign-made goods into their country.

D. are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.

SWOT analysis A. is a way to measure whether a company's value chain is longer or shorter than the chains of key rivals. 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. provides a good overview of whether a company's situation is fundamentally healthy or unhealthy. E. identifies the reasons why a company's strategy is or is not working very well.

D. provides a good overview of whether a company's situation is fundamentally healthy or unhealthy.

Industry conditions change A. because of such powerful driving forces as swings in buyer demand, changing interest rates, ups and downs in the economy, and higher/lower entry barriers. B. because of newly emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups. C. because new industry key success factors emerge. D. because forces create pressures or incentives for industry participants (competitors, customers, suppliers) to alter their actions in important ways. E. chiefly because of changes in the barriers to entry and the degree of competition from substitute products.

D. because forces create pressures or incentives for industry participants (competitors, customers, suppliers) to alter their actions in important ways.

17. Industry conditions change: A. because of such powerful driving forces as swings in buyer demand, changing interest rates, ups and downs in the economy, and higher/lower entry barriers. B. because of newly emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups. C. because new industry key success factors emerge. D. because important forces are enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways. E. chiefly because of changes in the barriers to entry and the degree of competition from substitute products.

D. because important forces are enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways.

Industry conditions change: A. because of such powerful driving forces as swings in buyer demand, changing interest rates, ups and downs in the economy, and higher/lower entry barriers. B. because of newly emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups. C. because new industry key success factors emerge. D. because important forces are enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways. E. chiefly because of changes in the barriers to entry and the degree of competition from substitute products.

D. because important forces are enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways.

A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets: A. is competitively disadvantaged when the U.S. dollar declines in value against the currencies of the countries to which it is exporting. B. is largely unaffected by fluctuating exchange rates. It would, however, be affected if its plants were in foreign countries. C. becomes more competitive in foreign markets when the U.S. dollar gains in value against the currencies of the countries to which it is exporting. D. becomes more competitive in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting. E. has no interest in whether the dollar grows stronger or weaker versus foreign currencies unless it is competing only against companies located in foreign countries.

D. becomes more competitive in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting.

40. The advantages of using a licensing strategy to participate in foreign markets include: ␣ ␣

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

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

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

Industry rivals tend to experience weak competitive pressures from substitute products when: A. the available substitute products are weakly differentiated from one another. B. the buyers of the industry's products are few in number and they have substantial amounts of leverage with sellers. C. rival sellers experience strong bargaining power from both suppliers and influential customers. D. buyers incur high costs in switching to substitutes and substitutes are higher priced relative to the quality, performance, and other attributes they deliver. E. the producers of substitute products are all pursuing strategies to strongly differentiate their products on the basis of quality and product performance.

D. buyers incur high costs in switching to substitutes and substitutes are higher priced relative to the

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. can suffer culture clash and integration problems due to different management styles and business practices. E. are rarely useful in helping a company win the race for global industry leadership.

D. can suffer culture clash and integration problems due to different management styles and business practices.

Successful broad differentiation allows a firm to: A. be the industry's best-cost provider. B. set the industry ceiling on price. C. avoid being dragged into a price war with industry rivals and not be overly concerned about whether entry barriers into the industry are high or low. D. command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand. E. take sales and market share away from rivals by undercutting them on price.

D. command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand.

The marketing emphasis of a company pursuing a focused low-cost provider strategy usually is to: A. tout the company's lower prices. B. tout the lack of frills and extras. C. out-advertise rivals and make frequent use of discount coupons. D. communicate the attractive features of a budget-priced product offering that fits niche members' expectations. E. communicate the product's ability to serve the customer's every need.

D. communicate the attractive features of a budget-priced product offering that fits niche members' expectations.

Which of the following is *not* one of the questions that needs to be answered in thinking strategically about a company's industry and competitive environment?

What emerging opportunities and threats are evident in the industry environment?

Value-creating activities A. focuses on exploiting a company's best-executed operating strategy. B. is based upon efficient performance of the company's primary value chain activities. C. concentrates on minimizing the costs associated with the design of a product or service. D. deliberately develop valuable competencies and capabilities that add to a company's competitive power in the marketplace. E. focuses on working with forward channel allies to develop capabilities to outmatch the capabilities of rivals.

D. deliberately develop valuable competencies and capabilities that add to a company's competitive power in the marketplace.

92. In expanding into foreign markets, a company can strive to gain competitive advantage (or offset domestic disadvantages) by:

D. dispersing its activities among various countries in a manner that lowers costs or else helps achieve . greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets.

In expanding into foreign markets, a company can strive to gain competitive advantage (or offset domestic disadvantages) by: A. building a state-of-the-art facility to fully capture scale economies via an export strategy. B. using export, licensing, or franchising strategies so as to minimize risk and capital investment. C. locating buyer-related activities in all countries where it sells its product. D. dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets. E. avoiding the use of strategies that entail coordinating its domestic strategic moves with its strategic moves in the various foreign markets it enters.

D. dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets.

The two most important parts of SWOT analysis are A. pinpointing the company's competitive assets and pinpointing its competitive liabilities. B. identifying the company's resource strengths and identifying the company's best market opportunities. C. identifying the external threats to a company's future profitability and pinpointing how many market opportunities it has. D. drawing conclusions from the SWOT listings about the company's overall situation and translating these into strategic actions to better match the company's strategy to its resource strengths and market opportunities, to correct the important weaknesses, and to defend against external threats. E. making accurate lists of the company's strengths, weaknesses, opportunities, and threats and then using these lists as a basis for ascertaining how well the company's strategy is working

D. drawing conclusions from the SWOT listings about the company's overall situation and translating these into strategic actions to better match the company's strategy to its resource strengths and market opportunities, to correct the important weaknesses, and to defend against external threats.

When companies engage in value-creating activities, they do so by: A. focusing on exploiting a company's best-executed operating strategy. B. concentrating on efficient performance of the company's primary value chain activities. C. concentrating on minimizing the costs associated with the design of a product or service. D. drawing on specific company resources and capabilities that underlie and enable the activity. E. focusing on working with forward-channel allies to develop capabilities to outmatch the capabilities of rivals.

D. drawing on specific company resources and capabilities that underlie and enable the activity.

A strategic group consists of those firms in an industry that A. are subject to the same driving forces. B. are placing about the same emphasis on each distribution channel. C. use the same key success factors to differentiate their products. D. employ similar competitive approaches and occupy similar positions in the market. E. have similar size market shares.

D. employ similar competitive approaches and occupy similar positions in the market.

1. The reason the world economy is globalizing at an accelerated pace is because

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

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

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

External threats may pose various degrees of adversity upon the company and can surface from many sources and examples, EXCEPT for: A. the advent of cheaper or better technologies. B. the entry of lower-cost foreign competitors and restrictive foreign trade policies. C. new burdensome regulations. D. higher overall unit costs relative to those of key competitors. E. rising prices on key inputs (such as energy costs).

D. higher overall unit costs relative to those of key competitors.

18. The task of driving forces analysis is to: A. develop a comprehensive list of all the potential causes of changing industry conditions. B. predict which new driving forces will emerge next. C. determine which one of the five competitive forces is the biggest driver of industry change. D. identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces. E. learn what the industry key success factors are and how they might change in the future.

D. identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces.

A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers and customers: A. lacks powerful driving forces. B. gives each industry competitor the best potential for building sustainable competitive advantage over rival firms. C. makes it challenging for industry members to compete successfully unless they can strongly differentiate their products. D. is conducive to industry members earning attractive profits. E. requires that industry members have low costs in order to be competitively successful.

D. is conducive to industry members earning attractive profits.

The task of driving forces analysis is to: A. develop a comprehensive list of all the potential causes of changing industry conditions. B. predict which new driving forces will emerge next. C. determine which one of the five competitive forces is the biggest driver of industry change. D. identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces. E. learn what the industry key success factors are and how they might change in the future.

D. identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces.

The steps involved in driving forces analysis are A. developing a comprehensive list of all the potential causes of changing industry conditions. B. predicting which new driving forces will emerge next. C. determining which of the five competitive forces is the biggest driver of industry change. D. identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes are needed to prepare for the impact of the driving forces. E. All of these.

D. identifying the driving forces, assessing whether their impact will make the industry more or less attractive, and determining what strategy changes are needed to prepare for the impact of the driving forces.

To profitably employ a best-cost provider strategy, a company must have the resources and capabilities to: A. sell a product with the best cost at the best price. B. have the best cost (as compared to rivals) for each activity in the industry's value chain. C. provide buyers with the best attributes at the best cost. D. incorporate attractive or upscale attributes into its product offering at a lower cost than rivals. E. do a better job than rivals of adopting the best operating practices.

D. incorporate attractive or upscale attributes into its product offering at a lower cost than rivals.

Rivalry among competing sellers is generally more intense when A. buyer demand is growing rapidly. B. the industry's driving forces are strong and rivals have strongly differentiated products. C. barriers to entry are moderately high and the pool of likely entry candidates is small. D. industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit volume. E. barriers to entry are high and buyer switching costs are high.

D. industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit volume.

A competitive strategy to be the low-cost provider in an industry works well when: A. price competition among rival sellers is especially sluggish. B. there are numerous ways to achieve product differentiation that have no value to buyers. C. buyers incur high costs in switching their purchases from one seller/brand to another. D. industry newcomers use introductory low prices to attract buyers and build a customer base. E. industry newcomers use high introductory prices to let buyers know they have a superior product to build a customer base.

D. industry newcomers use introductory low prices to attract buyers and build a customer base.

A blue-ocean strategy: A. is an offensive strike employed by a market leader that is directed at pilfering customers away from unsuspecting rivals to boost profitability. B. involves an unexpected (out-of- the-blue) preemptive strike to secure an advantageous position in a fast-growing market segment. C. works best when a company is the industry's low-cost leader. D. involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand. E. involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals.

D. involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

87. There are a number of advantages to executing a global strategy, but there are also drawbacks that can make the strategy difficult to execute. A primary drawback of a global strategy is that it: ␣

D. involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise.

A primary drawback of a global strategy is that it: A. allows firms to address local needs as precisely as locally based rivals can. B. permits firms to be more responsive to changes in local market conditions, either in the form of new opportunities or competitive threats. C. provides for lower transportation costs and also may involve higher tariffs. D. involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise. E. raises production costs due to the greater variety of designs and components.

D. involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise.

The best indicator of how well a company's strategy is working is whether the company: A. is achieving its stated financial objectives, its financial performance equates to the industry average, and market share gains reflect short-term preferences for capacity maximization. B. is attentive to its poor execution in functional areas, business goals are stretch, and the value proposition has a product focus. C. is geared to initiatives designed to build market share and to promote corporate responsibility. D. is achieving its stated financial and strategic objectives, its financial performance is better than the industry average, and it is gaining customers and increasing its market share. E. is geared to initiatives to promote corporate social responsibility.

D. is achieving its stated financial and strategic objectives, its financial performance is better than the industry average, and it is gaining customers and increasing its market share.

A core competence: A. detracts from a company's arsenal of competitive capabilities and competitive assets and is not a resource strength considered to be genuine. B. is typically results-based, residing in a company's tangible physical assets on the balance sheet. C. is often grounded in a single department's set of knowledge and expertise. D. is an activity that a firm performs proficiently that is also central to its strategy and competitive success. E. is a proficiently performed external activity.

D. is an activity that a firm performs proficiently that is also central to its strategy and competitive success.

A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers and customers A. lacks powerful driving forces. B. gives each industry competitor the best potential for building sustainable competitive advantage. C. makes it hard for industry members to pursue a differentiation strategy. D. is conducive to industry members earning attractive profits. E. requires that industry members have low costs.

D. is conducive to industry members earning attractive profits.

A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers and customers A. lacks powerful driving forces. B. gives each industry competitor the best potential for building sustainable competitive advantage over rival firms. C. makes it hard for industry members to compete successfully unless they can strongly differentiate their products. D. is conducive to industry members earning attractive profits. E. requires that industry members have low costs in order to be competitively successful.

D. is conducive to industry members earning attractive profits.

85. The competitive strategy of a firm pursuing a "think global, act local" approach to strategy-making: ␣ ␣

D. is essentially the same in all country markets where it competes but it may nonetheless give local . managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions.

The value of doing competitive strength assessment is to A. determine how competitively powerful the company's core competencies are. B. learn if the company's market opportunities are better than those of its rivals. C. learn whether a company has a distinctive competence. D. learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage vis-à-vis key rivals. E. determine whether a company's resource strengths are sufficient to allow it to earn bigger profits than rivals.

D. learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage vis-à-vis key rivals.

The value of doing competitive strength assessment is to: A. determine how competitively powerful the company's core competencies are. B. learn if the company's market opportunities are better than those of its rivals. C. learn whether a company has a distinctive competence. D. learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage vis-à-vis key rivals. E. determine whether a company's resource strengths are sufficient to allow it to earn bigger profits than rivals.

D. learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage vis-à-vis key rivals.

Companies that compete internationally can pursue competitive advantage in world markets(or offset domestic disadvantages) by: A. using a differentiation-based competitive strategy in those country markets with superior resources. B. choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices), thus keeping costs and prices lower than rivals. C. using an export strategy to circumvent the risks of adverse exchange rate fluctuations. D. locating value chain activities in whatever nations prove most advantageous in a manner that uses location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination. E. employing a multidomestic strategy instead of a global strategy.

D. locating value chain activities in whatever nations prove most advantageous in a manner that uses location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination.

41. A primary disadvantage of a licensing strategy is the need to: ␣ ␣

D. lose some degree of control over their competitive offering.

A low-cost leader's basis for competitive advantage is: A. lowest possible prices for comparable products. B. a low-cost/moderate price approach to gain the biggest market share. C. high buyer switching costs. D. meaningful lower overall costs than rivals on comparable products. E. higher unit sales than rivals.

D. meaningful lower overall costs than rivals on comparable products.

A competitive strategy of striving to be the low-cost provider is particularly attractive when: A. buyers are not very price-conscious. B. most rivals are trying to be best-cost providers. C. there are many ways to achieve product differentiation that have value to buyers. D. most buyers use the product in much the same ways, with user requirements calling for a standardized product. E. most rivals are pursuing focused low-cost or focused differentiation strategies.

D. most buyers use the product in much the same ways, with user requirements calling for a standardized product.

Whatever strategic approach is adopted by a company to deliver value, it nearly always requires: A. that management undertake formal planning sessions with functional departments to ensure productivity improvement. B. the identification of strengths and weaknesses within the company. C. matching corporate identity with the corporate culture in order to integrate effort and build sales momentum. D. performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match. E. constant efforts to thwart entry of new rivals and their attempts to create differentiated products with unit costs above price premium.

D. performing value chain activities differently than rivals and building competitively valuable resources and capabilities that rivals cannot readily match.

40. SWOT analysis: A. provides a measure of the relative strength of resources in the company's value chain in relation to rivals positioning. 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. provides a good overview and conclusions about the company's overall situation. E. identifies the reasons why a company's strategy is or is not working very well.

D. provides a good overview and conclusions about the company's overall situation.

An industry contains one strategic group when all sellers: A. are subject to the same driving forces. B. are placing about the same emphasis on various distribution channels. C. use the same key success factors to differentiate their products. D. pursue essentially identical strategies and have similar market positions. E. pursue varying distribution channels and product attributes, and where their customer service attributes differentiate them in the marketplace.

D. pursue essentially identical strategies and have similar market positions.

Correctly diagnosing an industry's key success factors: A. points to those things that every firm in the industry needs to attend to in order to develop product propositions. B. hints at the firm's ability to generate above-average profitability. C. reveals the firms capabilities and resources are aligned with operating practices of industry participants. D. raises a company's chances of crafting a sound strategy. E. raises a company's sustainability dimensions and market characteristics in line with industry dynamics.

D. raises a company's chances of crafting a sound strategy.

Rivalry among competing sellers is generally more intense when: A. there are relatively few industry key success factors and rivals have highly differentiated products. B. the industry's driving forces are strong and rivals have strongly differentiated products. C. barriers to entry are moderately high and the pool of likely entry candidates is small. D. rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share. E. barriers to entry are high and buyer switching costs are high.

D. rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share.

6. Rivalry among competing sellers is generally more intense when: A. there are relatively few industry key success factors and rivals have highly differentiated products. B. the industry's driving forces are strong and rivals have strongly differentiated products. C. barriers to entry are moderately high and the pool of likely entry candidates is small. D. rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share. E. barriers to entry are high and buyer switching costs are high.

D. rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising, and otherwise gain sales and market share.

A firm pursuing a best-cost provider strategy: A. seeks to be the low-cost provider in the largest and fastest growing (or best) market segment. B. tries to have the best cost (as compared to rivals) for each activity in the industry's value chain. C. tries to outcompete a low-cost provider by attracting buyers on the basis of charging the best price. D. seeks to deliver superior value to buyers by satisfying their expectations on key attributes and beating rivals in meeting customer expectations on price. E. seeks to achieve the best costs by using the best operating practices and incorporating the best features and attributes.

D. seeks to deliver superior value to buyers by satisfying their expectations on key attributes and beating rivals in meeting customer expectations on price.

A company's strategic options for remedying cost disadvantages in internally performed value chain activities do NOT include: A. revamping its value chain to eliminate or bypass some cost-producing activities (particularly low value-added activities). B. implementing the use of best practices, particularly for high-cost activities. C. investing in productivity-enhancing, cost-saving technological improvements. D. switching to activity-based costing. E. outsourcing the performance of high-cost activities to vendors that can perform them more cheaply.

D. switching to activity-based costing.

A company's strategic options for remedying cost disadvantages in internally performed value chain activities do not include A. revamping its value chain to eliminate or bypass some cost-producing activities (particularly low value-added activities). B. implementing the use of best practices, particularly for high-cost activities. C. investing in productivity-enhancing, cost-saving technological improvements. D. switching to activity-based costing. E. outsourcing the performance of high-cost activities to vendors that can perform them more cheaply.

D. switching to activity-based costing.

Tangible resources include: A. human assets and intellectual capital, which can include the talent of the work force and the creativity and innovativeness of certain personnel. B. reputational assets, which can include the company's reputation for quality, service, and reliability as well as their reputation for fair dealings with suppliers. C. relationships such as alliances that provide access to technologies, specialized know-how, or geographic markets. D. technological assets such as patents, copyrights, and innovation technologies. E. company culture and incentive system, which includes the norms of behavior and business principles.

D. technological assets such as patents, copyrights, and innovation technologies.

The competitive force of rival firms' jockeying for better market positions, higher sales and market shares, and competitive advantage A. is stronger when firms strive to be low-cost producers than when they use differentiation and focus strategies. B. is typically a weaker competitive force than is the threat of entry of new rivals. C. is largely unaffected by whether industry conditions tempt rivals to use price cuts or other competitive weapons to boost unit sales. D. tends to intensify when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders. E. is weaker when more firms have weakly differentiated products, buyer demand is growing slowly, and buyers have moderate switching costs.

D. tends to intensify when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders.

One of the biggest strategic challenges to competing in the international arena includes: A. how to leverage the opportunities arising from shifting exchange rates. B. how to charge the same price in all country markets. C. how to identify foreign firms licensed to produce and distribute the company's products. D. whether to offer a standardized product worldwide or a customized product offering in each different country market. E. whether to pursue a franchising strategy or a joint venture strategy.

D. whether to offer a standardized product worldwide or a customized product offering in each different country market.

What is the foremost question in running a business enterprise ?

What must managers do, and do well, to make a company a winner in the marketplace?

The competitive battles among rival sellers striving for better market positions, higher sales and market shares, and competitive advantage, suggests the rivalry force: A. is stronger when firms strive to be low-cost producers than when they use differentiation and focus strategies. B. is typically a weaker competitive force than is the threat of entry of new rivals. C. is largely unaffected by whether industry conditions tempt rivals to use price cuts or other competitive weapons to boost unit sales. D. tends to intensify when strong companies with sizable financial resources, proven competitive capabilities, and respected brand names hurdle entry barriers looking for growth opportunities and launch aggressive, well-funded moves to transform into strong market contenders. E. is weaker when more firms have weakly differentiated products, buyer demand is growing slowly, and buyers have moderate switching costs.

D. tends to intensify when strong companies with sizable financial resources, proven competitive capabilities, and respected brand names hurdle entry barriers looking for growth opportunities and launch aggressive, well-funded moves to transform into strong market contenders.

One of the things that can be gleaned from a strategic group map of industry rivals is: A. which rivals have been in business longer and thus have greater access to experience curve effects. B. which rivals have newer manufacturing facilities and thus have achieved greater product quality. C. which strategic groups have the highest profit margins and the highest customer switching costs and thus represent key operating characteristics. D. that some strategic groups are more favorably positioned than others because they confront weaker competitive forces and/or because they are more favorably impacted by industry driving forces. E. which strategic groups are currently being shunned by customers because of high prices and relatively low product quality.

D. that some strategic groups are more favorably positioned than others because they confront weaker competitive forces and/or because they are more favorably impacted by industry driving forces.

Costs and price differences among competing companies can have origins in activities performed by: A. the company's internally performed activities (its own value chain) compared to the cost structure of the internally performed activities of rival companies. B. value chains of the company's suppliers. C. value chains of a company's distributors and retail dealers and forward channel allies. D. the company's internally performed activities (its own value chain), but also on costs in the value chain of its suppliers and distribution channel allies. E. whether the company has a longer or shorter value chain than its close rivals.

D. the company's internally performed activities (its own value chain), but also on costs in the value chain of its suppliers and distribution channel allies.

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of A. whether the profits of suppliers are relatively high or low. B. the number of suppliers that each seller/industry member purchases from on average. C. how aggressively rival industry members are trying to differentiate their products. D. the extent to which suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry. E. whether the prices of the items being furnished by the suppliers are rising or falling.

D. the extent to which suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry.

A broad differentiation strategy improves profitability when: A. it is focused on product innovation. B. differentiating enhances product performance and quality. C. the differentiating features appeal to sophisticated and prestigious buyers. D. the higher price the product commands exceeds the added costs of achieving the differentiation. E. the differentiator charges a price that is only fractionally higher than the industry's low-cost provider.

D. the higher price the product commands exceeds the added costs of achieving the differentiation.

117.The best strategy options for a local company in competing against global challengers include: ␣ ␣

D. using an understanding of local customer preferences to create customized products or services, transferring the company's expertise to cross-border markets, and/or using acquisitions and rapid growth strategies to defend against expansion-minded multinationals.

The spotlight in analyzing a company's resources, internal circumstances, and competitiveness includes such questions/concerns as: A. whether the company is located all over the globe. B. whether the company's key success factors are more dominant than the key success factors of close rivals. C. whether the company has the industry's most efficient and effective value chain. D. what the company's resource strengths and weaknesses are in relation to the market opportunities and external threats. E. what new acquisitions the company would be well advised to make in order to strengthen its financial performance and overall balance sheet position.

D. what the company's resource strengths and weaknesses are in relation to the market opportunities and external threats.

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of: A. whether the profits of suppliers are relatively high or low. B. the number of suppliers that each seller/industry member purchases from on average. C. how aggressively rival industry members are trying to differentiate their products. D. whether demand for supplier products is high and they are in short supply. E. whether the prices of the items being furnished by the suppliers are rising or falling.

D. whether demand for supplier products is high and they are in short supply.

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of A. whether the profits of suppliers are relatively high or low. B. the number of suppliers that each seller/industry member purchases from on average. C. how aggressively rival industry members are trying to differentiate their products. D. whether suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry. E. whether the prices of the items being furnished by the suppliers are rising or falling.

D. whether suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry.

5. Which one of the following is NOT a reason why a company decides to enter foreign markets? ␣ ␣

D.To gain economic incentives offered by governments of developing countries wishing to expand industry and job creation.

What is the foremost strategic issue that must be addressed by firms when operating in two or more foreign markets? A. Deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country. B. Deciding on the appropriate level of sustainable profitability. C. Deciding on local responsiveness to product sales in each country. D. Deciding on the degree of globalization to maintain expansion capabilities. E. All of these.

Deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country.

A strategic vision for a company

Describes "where we are going" by delineating the course and direction management has charted for the company's future product-customer-market-technology focus.

Which one of the following is NOT an integral part of driving forces analysis?

Determining whether forces are acting to cause industry rivals to shift to a different strategic group

Which of the following is NOT a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets? A. Prepare to compete on the basis of low price. B. Be prepared to modify aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding). C. Try to change the local market to better match the way the company does business elsewhere. D. Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly. E. Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances.

Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly.

Which of the following is not one of the five basic tasks of the strategy-making, strategy-executing process?

Developing a profitable business model

Which one of the following is NOT one of the five basic tasks of the strategy-making, strategy-executing process?

Developing a profitable business model.

Which of the following tasks of the strategy-making, strategy-execution managerial process make up the company's strategic plan?

Developing a strategic vision, mission, and core values

Which of the following are integral parts of the managerial process of crafting and executing strategy?

Developing a strategic vision, setting objectives, and crafting a strategy

What is the foremost question in running a business enterprise?

What must managers do, and do well, to make a company a winner in the marketplace?

Which one of the following questions is NOT something that company managers should consider in choosing to pursue one strategic course or directional path versus another?

Do we have a better business model than key rivals?

Which one of the following questions is not something that company managers should consider in choosing to pursue one strategic course or directional path versus another?

Do we have a better business model than key rivals?

32. Companies operating in an international marketplace have to respond to: ␣ ␣

E ALL OF THESE A.whether to customize their offerings in each different country market to match the tastes and preferences of local buyers. B. whether to pursue a strategy of offering a mostly standardized product worldwide. C.how much to customize their offerings in each different country market to match the tastes and preferences of local buyers. Dthe tensions between market pressures to localize a company's product offerings country by country and . the competitive pressures to lower costs through greater product customization. E. All of these.

The industry or market opportunities that are most relevant to a company and those which its strategy should aim at capturing include A) opportunities that are well-suited to the company's competitive capabilities and resource strengths. B) opportunities which the company has the financial resources to pursue. C) opportunities that offer important avenues for growth. D) opportunities where the company has the greatest potential for competitive advantage. E) All of the above

E) All of the above

Doing a weighted competitive strength assessment of how a company compares against key rivals involves A) developing a list of 6 to 10 telling measures of competitive strength and then assigning weights to each of these strength measures that reflects their relative importance. B) rating each company on each strength measure (using a scale of 1 to 10) and then multiplying the strength rating by the assigned weight to get a weighted strength score. C) summing each company's weighted strength scores on the various strength measures to get an overall measure of competitive strength for each competitor. D) drawing conclusions about the size of a company's net competitive advantage or disadvantage vis-à-vis its rivals (with the size of the advantage/disadvantage being indicated by the sizes of the differences among the companies' competitive strength scores). E) All of the above.

E) All of the above.

The state of competition in an industry is a function of A. the competitive pressures associated with rivalry among competing sellers to attract customers. B. competitive pressures coming from the attempts of companies in other industries attempting to win buyers over to their substitute products. C. competitive pressures associated with the threat of new entrants into the marketplace. D. competitive pressures associated with the bargaining power of suppliers and customers. E. All of these

E. All of these

Identifying the strategic issues that company managers need to address A) involves using the results of both industry and competitive analysis and what has been learned from evaluating the company's present strategy, SWOT analysis, and the evaluations of the company's own competitiveness. B) entails developing a "worry list" of "how to...", "whether to....", and "what to do about....." C) is important because it sets the agenda for deciding what actions to take next to improve the company's performance and business outlook—a good strategy must include actions to deal with all the strategic issues and problems that stand in the way of the company's future success. D) entails locking in on what challenges the company has to overcome in order to be financially and competitively successful in the years ahead. E) All of the above.

E) All of the above.

The procedure for constructing a strategic group map involves A) identifying the competitive characteristics that differentiate firms' market positions and competitive approaches. B) selecting variables for the map's axes that are highly correlated. C) using only variables for the map's axes that are quantitative in nature (qualitative measures of market positions and competitive approaches are too subjective and unreliable). D) plotting the firms on a two-variable or two-dimensional map, drawing circles around those firms occupying about the same strategy space, and making the size of the circles for each strategic group proportional to the size of its members' share of total industry sales revenues. E) Both A and D

E) Both A and D

Which of the following is not among the factors that determine whether competitive rivalry among industry members is strong, moderate, or weak? A) Whether buyer demand for the product is growing rapidly or slowly B) Whether customers' costs to switch brands is low or high C) How active industry rivals are in initiating fresh competitive moves and in using the various weapons of competition to improve their market standing and business performance D) Whether there are few or many rival sellers and whether there are big differences in their sizes and competitive capabilities E) Whether industry members are vertically integrated and whether the industry is characterized by significant scale economies and rapid technological change

E) Whether industry members are vertically integrated and whether the industry is characterized by significant scale economies and rapid technological change

The measure of internal cash flow estimates the cash a company's business is generating ____________. A) after payment of operating expenses, and interest B) before payment of operating expenses, interest, and taxes C) after payment of operating expenses, interest, taxes, dividends, and desirable reinvestments in the business D) before payment of interest and taxes. E) after payment of operating expenses, interest, and taxes

E) after payment of operating expenses, interest, and taxes

The task of driving forces analysis is to A) identify all the underlying factors that can cause industry and company profitability to rise or fall in the years ahead. B) predict what new forces of competitive and market change will emerge next. C) determine which of the five competitive forces is the biggest driver of industry change and to assess the impact on the company. D) identify which companies are being driven to move from one strategic group to another strategic group. E) determine how the collective impact of the driving forces will change market demand, competition and industry profitability

E) determine how the collective impact of the driving forces will change market demand, competition and industry profitability

Trying to determine what strategic moves rivals are likely to make next A) is interesting but usually has little bearing on a company's own best strategic moves. B) usually requires evaluating the industry's key success factors as well as determining how many driving forces are present. C) is best done by monitoring each rival's market share, earnings per share, and stock price—adverse changes in these measures signal the coming of a fresh move but as long as a company's performance on these measures is satisfactory the chance of fresh moves is slim. D) cannot be done effectively without first drawing a strategic group map. E) entails understanding rivals' strategies, watching their actions on a regular basis, sizing up their strengths and weaknesses, gauging how well they are faring in the marketplace, assessing how much pressure they are under to improve their performance, and evaluating the relative merits of their strategic options and alternatives so as to better predict their likely next moves.

E) entails understanding rivals' strategies, watching their actions on a regular basis, sizing up their strengths and weaknesses, gauging how well they are faring in the marketplace, assessing how much pressure they are under to improve their performance, and evaluating the relative merits of their strategic options and alternatives so as to better predict their likely next moves.

Which of the following companies would have the LEAST bargaining power with its suppliers? A. A company that is involved in mass production of goods to cater its expanding customer base B. A company that actively caters to a broad price-sensitive customer base C. A company that generates high quality product components from easily available raw materials for a broad customer base D. A company whose products are highly popular and easily available across most supermarkets E. A company that offers high-cost specialized products that could be used only by customers of a certain age group

E. A company that offers high-cost specialized products that could be used only by customers of a certain age group

Winning a sustainable competitive edge over competitors does NOT hinge on which of the following? A. Having a distinctive competitive product offering B. Building competitively valuable expertise and capabilities not readily matched, and offering distinctive products C. Building experience, know-how, and specialized capabilities that have been perfected over a long period of time D. Having "hard-to-beat" capabilities and impressive product innovation E. Building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost

E. Building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost

One of the lessons of SWOT analysis is that a company's strategy should A. be grounded in its resource strengths and capabilities. B. be aimed at those market opportunities that offer the best potential for both profitable growth and competitive advantage. C. seek to defend against threats to the company's future profitability. D. generally not place heavy demands on areas where company resources are weak or unproven. E. All of these.

E. All of these.

Sometimes it makes sense for a company to go on the offensive to improve its market position and business performance. The best offensives tend to incorporate the following EXCEPT:

focusing relentlessly on building a competitive advantage.

A computer chip manufacturing giant decides to outsource its operations to a new geographical location with cheaper labor amidst ongoing labor strikes in a few of its existing locations (due to proposed job cuts). This draws criticism in its new market and affects its current market position and productivity. Which of the following would be an appropriate reactive (emergent) strategy while moving forward? A. Hiring and training new talent to begin operations in the emerging market B. Acquiring a local computer chip marketing and distribution specialist firm in the new location C. Cancelling the idea of outsourcing and retaining the existing the workforce to run operations D. Shifting the existing workforce to the new geographical location and paying them according to new standards E. Cancelling the job cuts till the market situation and entry operations stabilize

E. Cancelling the job cuts till the market situation and entry operations stabilize

Troopline Inc., an online laptop retailer, sells laptops of similar range and features as other online laptop retailers. Which of the value propositions would NOT benefit the company? A. Providing free delivery of purchased laptops B. Allowing customers to pay through gift coupons C. Updating the site with better high-resolution pictures of laptops D. Providing mobile friendly version of the site and compatible apps for mobile users E. Establishing a comparison feature tab that allows customers to compare offerings from other online retailers

E. Establishing a comparison feature tab that allows customers to compare offerings from other online retailers

Which of the following questions can be used to distinguish a winning strategy from a mediocre or losing strategy? A. How good is the company's business model? B. Is the company a technology leader? C. Does the company have low prices in comparison to rivals? D. Is the company putting too little emphasis on behaving in an ethical and socially responsible manner? E. How well does the strategy fit the company's situation?

E. How well does the strategy fit the company's situation?

In the course of crafting a strategy, which of the following is NOT a common management function? A. Abandoning certain strategy elements that have grown stale or become obsolete B. Modifying the current strategy when market and competitive conditions take an unexpected turn or some aspects of the company's strategy hit a stone wall C. Modifying the current strategy in response to the fresh strategic maneuvers of rival firms D. Taking proactive actions to improve this or that piece of the strategy E. Sharing the strategy with the public to gain additional customer and shareholder support

E. Sharing the strategy with the public to gain additional customer and shareholder support

Which of the following is NOT a frequently used strategic approach to set a company apart from rivals and achieve a sustainable competitive advantage? A. Striving to be the industry's low-cost provider B. Outcompeting rivals on the basis of differentiating features that will appeal to a broad spectrum of buyers C. Developing a best-cost provider strategy that gives customers more value for the money D. Focusing on a narrow market niche and serving buyers' special needs and tastes E. Striving to be the industry's high-price provider

E. Striving to be the industry's high-price provider

Which of the following is NOT typically a trigger to an evolving strategy? A. The need to keep strategy in step with changing circumstances, market conditions, and changing customer needs and expectations B. The proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy C. The need to abandon some strategy features that are no longer working well D. The need to respond to the newly initiated actions and competitive moves of rival firms E. The need to respond to short-term swings in the stock market

E. The need to respond to short-term swings in the stock market

The heart and soul of a company's strategy-making effort is determining how to: A. become the industry's low-cost provider. B. maximize profits and shareholder value. C. improve the efficiency of its business model. D. maximize profits while simultaneously operating in a socially responsible manner that keeps the company's prices as low as possible. E. come up with moves and actions that produce a durable competitive edge over rivals.

E. come up with moves and actions that produce a durable competitive edge over rivals.

Managers must be prepared to modify their strategy in response to all of the following EXCEPT: A. changing circumstances that affect performance and the desire to improve the current strategy. B. competitor moves in the market and shifting needs of buyers. C. stagnating market and restrictive industrial opportunities. D. mounting evidence that the strategy is less effective. E. public pronouncements from rivals about monthly profit margins.

E. public pronouncements from rivals about monthly profit margins.

Which of the following would NOT lead to cost savings? A. A company that sets up its own direct sales force B. A company that eliminates low-value-added work steps C. A company that motivates employees through incentives D. A company that conducts sales operations at its website E. A company that sources the best from suppliers across the world

E. A company that sources the best from suppliers across the world

Which of the following generic types of competitive strategies is typically the "best" strategy for a company to employ? A. A strategy that seeks to underprice rivals on comparable products that attract a broad spectrum of buyers B. A strategy that seeks to differentiate product offerings from rivals by offering superior attributes that attract a broad spectrum of buyers C. A strategy that concentrates on a narrow buyer segment and outcompetes rivals by offering niche members customized attributes D. A strategy that concentrates on value-conscious buyers and outcompetes rivals by offering products at attractive prices E. A strategy that is customized to fit the macro-environment and industry and employs resources and capabilities that rivals have trouble duplicating

E. A strategy that is customized to fit the macro-environment and industry and employs resources and capabilities that rivals have trouble duplicating

In seeking to predict the next moves of close or key rivals, it is useful to consider such questions as: A. Which rivals badly need to increase their unit sales and market share? B. Are there predictable trends in the timing of rivals' new-product launches or marketing promotions? C. Which rivals have a strong incentive, along with the resources, to make major strategic changes? D. Which rivals are likely to enter new geographic markets or expand their product offerings? E. All of these

E. All of these

Competitive pressures associated with the threat of entry are greater when: A. incumbent firms are unable or unwilling to strongly contest the entry of newcomers. B. a large pool of potential entrants exists, some of which have the capabilities to overcome high entry barriers. C. entry barriers are relatively low and buyer demand for the product is growing rapidly, and newcomers can expect to earn attractive profits without inviting a strong reaction from incumbents. D. existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence. E. All of these conditions heighten the competitive pressures associated with fresh entry into the industry.

E. All of these conditions heighten the competitive pressures associated with fresh entry into the industry.

25. Sluggish performance results relative to rivals are a reliable warning sign that the company has either a weak strategy or poor strategy execution or both. The best way to identify a well-conceived, well-executed strategy is to determine whether the company is experiencing: A. a strengthening of its image and reputation among shareholders. B. a desirable growth rate in new customer acquisition and favorable customer retention efforts for establishing a strong customer experience. C. movement in its operating profit margin, satisfactory returns on investable liquid assets, and elimination of credit access restrictions. D. positive trends with the relevant cultural factors related to buyer's choices and product modifications. E. All of these.

E. All of these.

3. The nature and strength of the competitive forces that prevail in an industry is generally a joint product of: A. competition from rival sellers. B. competition from potential new entrants. C. competition from producers of substitute products. D. competitive pressures stemming from the bargaining power of both suppliers and buyers. E. All of these.

E. All of these.

31. A company's resources can include: A. a skill, specialized expertise, or competitively important capability. B. valuable human assets and intellectual capital. C. an achievement or attribute that puts the company in a position of market advantage. D. competitively valuable alliances or cooperative ventures. E. All of these.

E. All of these.

32. The competitive power of a company resource strength or competitive capability hinges on: A. how hard it is for competitors to copy. B. whether it is rare and something rivals lack. C. whether it is really competitively valuable and has the potential to contribute to a competitive advantage. D. how easily it can be trumped by the substitute resources/capabilities of rivals. E. All of these.

E. All of these.

A company's resource weaknesses can relate to A. inferior or unproven skills, expertise, or intellectual capital in competitively important parts of the business. B. something that it lacks or does poorly (in comparison to rivals). C. deficiencies in competitively important physical, organizational, or intangible assets. D. missing or competitively inferior capabilities in key areas. E. All of these.

E. All of these.

A company's strength can concern A. a skill, specialized expertise, or competitively important capability. B. valuable human assets and intellectual capital. C. an achievement or attribute that puts the company in a position of market advantage. D. competitively valuable alliances or cooperative ventures. E. All of these.

E. All of these.

A distinctive competence A. is a competitively important activity that a company performs better than its competitors. B. gives a company competitively valuable capability that is unmatched by rivals. C. is a basis for sustainable competitive advantage. D. can underpin and add real punch to a company's strategy. E. All of these.

E. All of these.

Determining whether a company's prices and costs are competitive A. requires looking at the costs of a company's competitively relevant suppliers and forward channel allies (distributors/dealers). B. requires considering the costs of a company's internally performed activities. C. involves the use of benchmarking the costs in a company's value chain system (the costs of its suppliers, its internally performed activities, the costs of its distributors/dealers) against the costs of the value chain systems employed by rival firms. D. typically involves the use of activity-based cost accounting. E. All of these.

E. All of these.

For a company to have competitively potent resources and capabilities, they must A. be in sync with changes in the company's own strategy. B. be in sync with its efforts to achieve a resource-based competitive advantage. C. fully support company efforts to attract customers. D. combat competitors' newly launched offensives to win bigger sales and market shares. E. All of these.

E. All of these.

Good competitive intelligence about the strategic direction and likely moves of key competitors allows a company to determine: A. which competitor has the best strategy and which competitors have flawed or weak strategies. B. which rivals are poised to gain market share and which seem destined to lose market share. C. which rivals are likely to rank among the industry leaders on the road ahead. D. which rivals are likely to initiate fresh strategic moves and why. E. All of these.

E. All of these.

Identifying the strategic issues and problems that merit front-burner managerial attention A. is accomplished in part by using the results of analyzing the company's external environment to help come up with a "worry list" of "how to...," "whether to....," and "what to do about....." B. helps set management's agenda for taking actions to improve the company's performance and business outlook. C. is done in part by evaluating the company's own internal situation—its resources and competitive position—to help come up with a "worry list" of "how to...," "whether to....," and "what to do about....." D. is done in part as a basis for drawing conclusions about whether to stick with company's present strategy or to modify it. E. All of these.

E. All of these.

Identifying the strategy-related issues and problems that company managers need to address and resolve entails A. drawing on what was learned from having analyzed the company's industry and competitive environment. B. drawing on the evaluations of the company's own resources, internal circumstances, and competitiveness. C. looking in on what challenges/obstacles/roadblocks the company has to overcome in order to be financially and competitively successful in the years ahead. D. developing a "worry list" of "how to...," "whether to....," and "what to do about....." E. All of these.

E. All of these.

A company needs performance targets or objectives

for its operations as a whole and also for each of its separate businesses, product lines, functional departments, and individual work units

The nature and strength of the competitive forces that prevail in an industry is generally a joint product of the A. pressures associated with rivalry among sellers to attract buyer patronage. B. threat that firms outside the industry will decide to enter the market. C. attempts of companies in other industries to win buyers over to their own substitute products. D. competitive pressures stemming from the bargaining power of both suppliers and buyers. E. All of these.

E. All of these.

The options for remedying an internal cost disadvantage include A. investing in productivity-enhancing, cost-saving technological improvements. B. redesigning the product or some of its components to facilitate speedier and more economical manufacture or assembly. C. implementing the use of best practices, particularly for high-cost activities. D. eliminating some cost-producing activities from the value chain, especially low value-added activities. E. All of these.

E. All of these.

The state of competition in an industry is a function of A. the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry. B. competitive pressures coming from the attempts of companies in other industries attempting to win buyers over to their substitute products. C. competitive pressures associated with the threat of new entrants into the marketplace. D. competitive pressures associated with the bargaining power of suppliers and customers. E. All of these.

E. All of these.

Which of the following areas within a company's total value chain system, can managers improve efficiency and effectiveness? A. A company's own activity segments. B. Suppliers' part of the overall value chain. C. The distribution channel portion of the value chain. D. None of these. E. All of these.

E. All of these.

Which of the following is not an example of a company's dynamic capability? A. capacity to improve existing resources and capabilities. B. upgrades to R&D resources to drive product innovation. C. capacity to add new resources and capabilities to the competitive asset portfolio. D. ability to replace degraded resources with acquired capabilities. E. All of these.

E. All of these.

Which of the following is NOT an example of a company's dynamic capability? A. A capacity to improve existing resources and capabilities B. Upgrades to R&D resources to drive product innovation C. A capacity to add new resources and capabilities to the competitive asset portfolio D. An ability to replace degraded resources with acquired capabilities E. An ability to keep antiquated resources by disregarding innovative capabilities

E. An ability to keep antiquated resources by disregarding innovative capabilities

34. Which of the following is not a generic strategy option for entering into foreign markets? ␣ ␣

E. An enterprise-wide strategy to take over local competition.

Which of the following signals would NOT warn challengers that strong retaliation is likely? A. Publicly announcing management's commitment to maintain market share B. Publicly committing to a company policy of matching competitors' terms or pricing C. Maintaining a war chest of cash and marketable securities D. Making a strong counter-response to the moves of weak competitors E. Announcing strong quarterly earnings potential to financial analysts

E. Announcing strong quarterly earnings potential to financial analysts

6. Which of the following is NOT a reason why crafting a strategy to compete in one or more foreign markets is inherently complex?

E. Because similarities in buyer tastes and preferences creates challenges in standardizing products and services.

Which of the following is NOT a reason why crafting a strategy to compete in one or more foreign markets is inherently complex? A. Because factors that affect industry competitiveness vary from country to country B. Because of the potential for location-based advantages to conducting value chain activities in certain countries C. Because different government policies and economic conditions make the business climate more favorable in some countries than others D. Because of the risks for shifts in currency exchange rates E. Because similarities in buyer tastes and preferences facilitate standardization of products and services

E. Because similarities in buyer tastes and preferences facilitate standardization of products and services

Which of the following is NOT a principal offensive strategy option? A. Leapfrogging competitors by being first to market with next-generation products B. Using hit-and-run or guerrilla warfare tactics to grab sales and market share C. Launching a preemptive strike to secure an advantageous position that rivals are prevented or discouraged from duplicating D. Pursuing continuous product innovation to draw sales and market share away from rivals E. Being the final competitor to market a next-generation product so as to guarantee the product is operationally sound

E. Being the final competitor to market a next-generation product so as to guarantee the product is operationally sound

Buyers are in position to exert strong bargaining power in dealing with sellers when: A. their costs to switch to competing brands or to substitute products are relatively high. B. a particular seller's product delivers quality or performance that is very important to the buyer and is not matched by other brands. C. they buy the product infrequently or in small quantities and are not particularly well-informed about sellers' products, prices, and costs. D. buyer demand is growing rapidly. E. Buyers are price-sensitive due to the product representing a significant fraction of their purchases.

E. Buyers are price-sensitive due to the product representing a significant fraction of their purchases.

Competing in the markets of foreign countries generally does NOT involve which of the following? A. Country-to-country differences in consumer buying habits and buyer tastes and preferences B. Country-to-country variations in host government restrictions and requirements and fluctuating exchange rates C. Whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide D. In which countries to locate company operations for maximum locational advantage, given country-to-country variations in wage rates, worker productivity, energy costs, tax rates, and the like E. Crafting a multidomestic strategy that works just as well in one country as in another and that also has the appeal of turning the world market into a mostly homogeneous market

E. Crafting a multidomestic strategy that works just as well in one country as in another and that also has the appeal of turning the world market into a mostly homogeneous market

Which of the following is NOT an advantage of strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms? A. Competing on a more global scale while still preserving their independence B. Gaining better access to scale economies in production and/or marketing C. Filling competitively important gaps in their technical expertise and/or knowledge of local markets D. Sharing distribution facilities and dealer networks, thus mutually strengthening their access to buyers E. Creating permanent arrangements between the domestic and foreign firms

E. Creating permanent arrangements between the domestic and foreign firms

Which of the following exemplifies location-based advantage for the companies competing on an international basis? A. Microsemi Corporation acquires California based Actel Corporation. B. RBC Wealth Management closes operations in South Florida. C. Samsung diversifies and ventures into textiles and food processing. D. Hyundai signs a memorandum of understanding with the government of South Korea to halt exports. E. De Beers sets up operations in the mining region of South Africa.

E. De Beers sets up operations in the mining region of South Africa.

Any company that seeks competitive advantage by being a first-mover must ask several hard questions prior to executing its strategy. Which question would it NOT ask? A. Does market takeoff depend on the new development of complementary products? B. Is a new infrastructure required before buyer demand can surge? C. Will buyers encounter high switching costs to move? D. Are there influential competitors in a position to delay or derail the efforts? E. Did the company pour too many resources into getting ahead of the market opportunity?

E. Did the company pour too many resources into getting ahead of the market opportunity?

Which of the following is NOT one of the principal components of strategic significance in the PESTEL analysis? A. Political factors including the extent to which government intervenes in the economy B. Economic conditions that include the general economic climate and specific factors such as interest rates, inflation rate, and unemployment rate, as well as conditions in the stock and bond markets that can affect consumer confidence C. Socio-cultural forces including societal values, attitudes, cultural factors, and lifestyles that impact business D. Technological factors includes the pace of change and technical developments that have the potential for impacting society E. Environmental forces that include the competitive structure, the degree of industry fragmentation, and the mobility barriers that inhibit business

E. Environmental forces that include the competitive structure, the degree of industry fragmentation, and the mobility barriers that inhibit business

All firms are subject to offensive challenges from rivals. Which of the following is NOT among the intent of the best defensive move? A. Lower the risk of being attacked B. Weaken the impact of any attack that occurs C. Pressure challengers to aim their efforts at other rivals D. Help protect a competitive advantage E. Harm the firm's competitive position

E. Harm the firm's competitive position

Which of the following is an example of a modification in the company's business model to accommodate the unique local circumstances of developing countries? A. Mahindra and Mahindra ranked number one in J. D. Power Asia Pacific's new-vehicle overall quality category. B. Home Depot could rely on its value propositions only in some developing countries. C. Unilever developed a low-cost detergent, named Wheel, for the Indian market. D. Japan is known for its competitive strength in consumer electronics. E. In China, Dell moved from its traditional Internet-based orders to orders over phone and fax.

E. In China, Dell moved from its traditional Internet-based orders to orders over phone and fax.

65. Which of the following statements regarding multidomestic and global competition is false? ␣ ␣

E. In global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the . sum of the competitive advantages (or disadvantages) it has in each country market where it competes.

Which of the following statements regarding multidomestic and global competition is false? A. In global competition, rivals vie for worldwide market leadership and the leading competitors compete head-to-head in the markets of many different countries. B. In globally competitive industries, a company's competitive position in one country both affects and is affected by its position in other countries. C. In multidomestic competition, there is greater cross-country variation in market conditions and the nature of the competitive contest among rivals than tends to be the case in globally competitive markets. D. With multidomestic competition, the competitive contest is localized, with rivals battling for national market leadership; moreover, winning in one country market does not necessarily signal that a company has the ability to fare well in the markets of other countries. E. In global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in each country market where it competes.

E. In global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in each country market where it competes.

Which of the following is NOT true of a company that succeeds in differentiating its product offering from those of its rivals? A. It can avoid having to compete on the basis of simply a low price. B. It commands a premium price for its product. C. It usually increases unit sales. D. It gains buyer loyalty to its brand. E. It attracts mainly price-conscious buyers.

E. It attracts mainly price-conscious buyers.

Which of the following exemplifies cross-country differences in demographic, cultural, and market conditions? A. Nike produces its own line of skate shoes. B. Starbucks acquires a large coffee farm in Costa Rica. C. Ireland provides low-costs loans to foreign entrants to stimulate capital investment. D. Intel's silicon chips are identical across the world. E. McDonald's offers 100% beef-free products in its outlets in India.

E. McDonald's offers 100% beef-free products in its outlets in India.

Typically, the weakest of the five competitive forces in an industry is/are: A. the threat posed by potential new entrants. B. the bargaining power and leverage that suppliers are able to exercise. C.the competitive pressures that stem from the ready availability of attractively priced substitute products. D. the bargaining power and leverage that buyers are able to exercise. E. None of these is typically the weakest.

E. None of these is typically the weakest.

Which of the following is NOT an action that a company should take to perform value chain activities more cost-effectively? A. Striving to capture all available economies of scale and taking advantage of experience and learning-curve effects B. Trying to operate facilities at full capacity C. Adopting labor-saving operating methods D. Improving supply chain efficiency E. Over-differentiating so that product features exceed the needs of most buyers

E. Over-differentiating so that product features exceed the needs of most buyers

Which of the following is NOT an option for remedying a supplier-related cost disadvantage? A. Integrate backward into the business of high-cost suppliers in an effort to reduce the costs of the items being purchased. B. Negotiate more favorable prices with suppliers. C. Collaborate closely with suppliers to identify mutual cost-saving opportunities. D. Switch to lower-priced substitute inputs. E. Persuade forward channel allies to implement best practices.

E. Persuade forward channel allies to implement best practices.

Which of the following is not an option for remedying a supplier-related cost disadvantage? A. Integrate backward into the business of high-cost suppliers in an effort to reduce the costs of the items being purchased. B. Negotiate more favorable prices with suppliers. C. Collaborate closely with suppliers to identify mutual cost-saving opportunities. D. Switch to lower priced substitute inputs. E. Persuade forward channel allies to implement best practices.

E. Persuade forward channel allies to implement best practices.

Which of the following is NOT one of the ways managers can enhance differentiation based on value drivers? A. Striving to create superior product features, design, and performance B. Striving for innovation and technological advances C. Pursuing continuous quality improvement D. Increasing the intensity of marketing, brand building, and sales activities E. Seeking out low-quality inputs

E. Seeking out low-quality inputs

Which of the following is the most unlikely element of a localized multidomestic strategy? A. Granting country managers fairly wide strategy-making latitude B. Scattering plants across many host countries, each producing product versions for local area markets C. Adapting marketing and distribution to the buying habits, customs, and culture of each host country D. Considering the preference for local suppliers (use of some local suppliers may be mandated by host governments) E. Selling directly to buyers (perhaps via the company's website) to avoid having to establish networks of wholesale/retail dealers in each country market

E. Selling directly to buyers (perhaps via the company's website) to avoid having to establish networks of wholesale/retail dealers in each country market

What does the World Trade Organization (WTO) NOT do primarily? A. Promotes fair trade practices B. Actively polices dumping C. Deals with the rules of trade between nations D. Helps producers, exporters, and importers conduct business E. Sets countries' tariff rates

E. Sets countries' tariff rates

Which of the following is NOT among the intended outcomes of horizontal merger and acquisition strategies? A. Expanding a company's geographic coverage B. Gaining quick access to new technologies or complementary resources and capabilities C. Leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities D. Extending the company's business into new product categories E. Suppressing a rival's breakthroughs in management or technology

E. Suppressing a rival's breakthroughs in management or technology

2. Which of the following factors represents the strategically relevant political factors in the macro-environment that will influence the performance of all firms across the board? A. The strength of the federal banking system B. The exogenous forces related to the general environmental demand C. Social factors that could fuel a political agenda and create greater transparency D. Bailouts and energy policies that are industry-specific E. Tax policy, fiscal policy, and tariffs providing impetus for anti-trust matters

E. Tax policy, fiscal policy, and tariffs providing impetus for anti-trust matters

Which of the following is NOT a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement? A. The alliance is critical to the company's achievement of an important objective. B. The alliance helps block a competitive threat. C. The alliance helps open up important new market opportunities. D. The alliance helps build, enhance, or sustain a core competence or competitive advantage. E. The alliance helps the company obtain additional financing on better credit terms.

E. The alliance helps the company obtain additional financing on better credit terms.

Which one of the following is NOT part of a company's macro-environment? A. Economic conditions in the economy at large B. Political factors and socio-cultural forces C. Technological factors and legal/regulatory conditions D. The immediate industry and competitive environment in which the company operates E. The company's resource strengths, resource weaknesses, and competitive capabilities

E. The company's resource strengths, resource weaknesses, and competitive capabilities

Which of the following is NOT a factor analyzed and relied on by firms when developing competitive strength in a foreign market? A. The relative size of the market, its growth potential, and the nature of domestic buyers' needs and wants B. The availability, quality, and cost of raw materials and other inputs that firms will require to produce their products and services C. The development of different styles of management, organization, and strategy D. The degree of collaboration with key suppliers and the greater the knowledge sharing throughout the related-industry cluster E. The level of industry-related support activities to foster customization of products and services

E. The level of industry-related support activities to foster customization of products and services

12. Which of the following factors is NOT a factor analyzed and relied on by firms when developing competitive strength in a foreign market? ␣

E. The level of industry-related support activities to foster customization of products and services.

13. For a company to create a home country advantage and become competitively strong in a foreign market, it should base its strategy around which of the following factors? ␣

E. The level of rivalry existing in the foreign market.

The difference between a core competence and a distinctive competence is that:

a core competence is a competitively and strategically relevant activity that a firm performs well compared to its other activities, whereas a distinctive competence is a competitively relevant activity a firm performs well compared to other rival firms.

The diamond framework is NOT LIKELY to answer which of the following questions about competing on an international basis? A. Where will the foreign entrants come from? B. Which countries have the weakest foreign rivals? C. What are the attributes of a country's business environment? D. What location of value chain activities is most beneficial? E. What are the disadvantages of allowing foreign competition?

E. What are the disadvantages of allowing foreign competition?

Which one of the following increases the competitive pressures associated with the threat of entry? A. When incumbent firms are likely to launch competitive initiatives to strongly contest the entry of newcomers B. When strong brand preference and a high degree of customer loyalty exists for the product offerings of incumbents C. When buyer demand for the product is growing fairly slowly D. When few outsiders have the expertise and financial resources and capabilities to hurdle whatever entry barriers exist E. When new entrants can expect to earn attractive profits

E. When new entrants can expect to earn attractive profits

Which one of the following increases the competitive pressures associated with the threat of entry? A. When incumbent firms are likely to launch competitive initiatives to strongly contest the entry of newcomers B. When buyers have a high degree of loyalty to the brands and product offerings of existing industry members C. When buyer demand for the product is growing fairly slowly D. When few outsiders have the expertise and resources to hurdle whatever entry barriers exist E. When newcomers can expect to earn attractive profits

E. When newcomers can expect to earn attractive profits

In which one of the following instances are the competitive pressures stemming from supplier bargaining power NOT weakened? A. When industry members pose a credible threat of backward integration into the business of suppliers B. When the cost of switching from one supplier to another is low C. When the buying firms purchase in large quantities and thus are important customers of the suppliers D. When the item being supplied is a commodity E. When the items purchased from suppliers are in short supply

E. When the items purchased from suppliers are in short supply

In which one of the following instances are the competitive pressures that industry members experience in their dealings with suppliers not weakened? A. When industry members pose a credible threat of backward integration into the business of suppliers B. When the cost of switching from one supplier to another is low C. When the buying firms purchase in large quantities and thus are important customers of the suppliers D. When the item being supplied is a commodity E. When the items purchased from suppliers are in short supply

E. When the items purchased from suppliers are in short supply

In which one of the following instances is supplier bargaining power and leverage not weakened? A. When industry members pose a credible threat of backward integration into the business of suppliers B. When the cost of switching from one supplier to another is low C. When the buying firms purchase in large quantities and thus are important customers of the suppliers D. When the item being supplied is a commodity E. When the items purchased from suppliers are in short supply

E. When the items purchased from suppliers are in short supply

In which one of the following instances is rivalry among competing sellers NOT more intense? A. When certain competitors are dissatisfied with their market position and make moves to bolster their standing B. When strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to transform their newly acquired competitors into stronger market contenders C. When competitors are fairly equal in size and capability D. When the products of rivals are weakly differentiated, buyer switching costs are low, and market demand is growing slowly E. When there are vast numbers of small rivals so the impact of any one company's actions is spread thinly across all industry members

E. When there are vast numbers of small rivals so the impact of any one company's actions is spread thinly across all industry members

Which of the following factors does not affect whether buyer bargaining power and seller-buyer collaboration are an important source of competitive pressure in an industry? A. Whether winning the business of certain customers offers a seller important market exposure or prestige B. The extent and importance of collaborative partnerships and alliances between particular sellers and buyers C. Whether buyers pose a major threat to integrate backward into the product market of sellers D. Whether sellers' products are weakly differentiated, making it easy and inexpensive for buyers to switch to competing brands E. Whether buyers have a strong preference for products of superior quality or just average quality

E. Whether buyers have a strong preference for products of superior quality or just average quality

Evaluating whether an industry presents a sufficiently attractive business opportunity usually does not involve a consideration of which of the following factors? A. The industry's growth potential B. Whether competitive pressures will likely grow stronger or weaker C. Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces D. The company's competitive position in the industry and its ability to perform industry key success factors E. Whether the industry's product is strongly or weakly differentiated

E. Whether the industry's product is strongly or weakly differentiated

In evaluating whether the industry and competitive environment presents sufficiently attractive prospects for both competitive success and attractive profits usually does NOT involve a consideration of which of the following factors? A. The industry's growth potential and whether competitive pressures will likely grow stronger or weaker, and whether strong competitive forces are squeezing industry profitability to subpar levels B. Whether the company occupies a stronger market position than rivals C. Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces D. The severity of the macro-environment problems confronting the industry E. Whether the industry's product is strongly or weakly differentiated

E. Whether the industry's product is strongly or weakly differentiated

Obtaining cost information is a primary difficulty associated with benchmarking. The following are typical sources for collecting information, EXCEPT: A. from published reports, industry research firms, and trade groups. B. from talking to knowledgeable industry leaders. C. from field trips to the facilities of competitors or non-competing firms. D. from independent firms and consulting firms to gather best practices and comparative cost data without identifying competing firms. E. from the classified government documents.

E. from the classified government documents.

Which two tests of a resource's competitive power determine whether a company's competitive advantage can be sustained in the face of active competition? A. Whether the resource or capability is competitively valuable and/or is something that rivals lack. B. Whether the resource or capability is rare and/or is hard to copy. C. Whether the resource or capability is easy to copy. D. Whether the resource or capability is competitively valuable and/or are there good substitutes available for the resource. E. Whether the resource or capability is hard to copy and/or can be trumped by different types of resources and capabilities.

E. Whether the resource or capability is hard to copy and/or can be trumped by different types of resources and capabilities.

When a company is good at performing a particular internal activity, it is said to have A. a competitive advantage over rivals. B. a competitive capability. C. a distinctive competence. D. a core competence. E. a company competence.

E. a company competence.

A focused low-cost strategy can lead to attractive competitive advantage when: A. buyers are looking for the best value at the best price. B. buyers are looking for a budget-priced product. C. buyers are price sensitive and are attracted to brands with low switching costs. D. a market is emerging and demand in the target market niche is growing rapidly and is served by industry-wide competitors E. a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

E. a firm can lower costs significantly by limiting its customer base to a well-defined buyer segment.

Assigning a weight to each measure of competitive strength assessment is generally analytically superior because A. a weighted ranking identifies which competitive advantages are most powerful. B. an unweighted ranking doesn't discriminate between companies with high and low market shares. C. it singles out which competitor has the most competitively potent core competencies. D. weighting each company's overall competitive strength by its percentage share of total industry profits produces a more accurate measure of its true competitive strength. E. all of the various measures of competitive strength are not equally important.

E. all of the various measures of competitive strength are not equally important.

Assigning a weight to each measure of competitive strength assessment is generally analytically superior because: A. a weighted ranking identifies which competitive advantages are most powerful. B. an unweighted ranking doesn't discriminate between companies with high and low market shares. C. it singles out which competitor has the most competitively potent core competencies. D. weighting each company's overall competitive strength by its percentage share of total industry profits produces a more accurate measure of its true competitive strength. E. all of the various measures of competitive strength are not equally important.

E. all of the various measures of competitive strength are not equally important.

While listening or categorizing company resources, what matters is that: A. all tangible resources are categorized correctly. B. important resources are reported against strategically subjective activities. C. resources are prioritized in terms of value propositions. D. strategically placed resources are manageable. E. all the different types of resources are included in the inventory.

E. all the different types of resources are included in the inventory.

Key "functional" strategies of a company include all of the following EXCEPT: A. R&D, technology, and product design strategies. B. production and information technology and supply chain management strategies. C. human resource and finance strategies. D. sales, marketing, and distribution strategies. E. alliance and partnerships as well as merger and acquisition growth strategies.

E. alliance and partnerships as well as merger and acquisition growth strategies.

Achieving a differentiation-based competitive advantage does NOT involve: A. incorporating product attributes and user features that lower a buyer's overall cost of using the product. B. incorporating features that raise the performance a buyer gets from using the product. C. incorporating features that enhance buyer satisfaction in noneconomic or intangible ways. D. delivering value to customers via competencies and competitive capabilities that rivals don't have or can't afford to match. E. appealing to buyers on the basis of attributes that rivals are emphasizing

E. appealing to buyers on the basis of attributes that rivals are emphasizing

The payoff of doing a thorough SWOT analysis is A. identifying whether the company's value chain is cost effective vis-à-vis the value chains of rivals. B. helping strategy-makers benchmark the company's resource strengths against industry key success factors. C. enabling a company to assess its overall competitive position relative to its key rivals. D. revealing whether a company's market share, measures of profitability, and sales compare favorably or unfavorably vis-à-vis key competitors. E. assisting strategy-makers in crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities, and the external threats to its future well-being.

E. assisting strategy-makers in crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities, and the external threats to its future well-being.

The payoff of doing a thorough SWOT analysis is: A. identifying whether the company's value chain is cost-effective vis-à-vis the value chains of rivals. B. helping strategy-makers benchmark the company's resource strengths against industry key success factors. C. enabling a company to assess its overall competitive position relative to its key rivals. D. revealing whether a company's market share, measures of profitability, and sales compare favorably or unfavorably vis-à-vis key competitors. E. assisting strategy-makers in crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities, and the external threats to its future well-being.

E. assisting strategy-makers in crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities, and the external threats to its future well-being.

48. A much-used and potent managerial tool for determining whether a company performs particular functions or activities in a manner that represents "the best practice" when both cost and effectiveness are taken into account is: A. competitive strength analysis. B. activity-based costing. C. resource cost mapping. D. SWOT analysis. E. benchmarking.

E. benchmarking.

A much-used and potent managerial tool for determining whether a company performs particular functions or activities in a manner that represents "the best practice" when both cost and effectiveness are taken into account is A. competitive strength analysis. B. activity-based costing. C. resource cost mapping. D. SWOT analysis. E. benchmarking.

E. benchmarking.

7. Rivalry among competing sellers grows in intensity when: A. rivals' products/services are sold at widely varying prices and there are only a few rivals. B. rivals have highly differentiated products and buyer demand is growing rapidly. C. there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members. D. the products/services of rivals are strongly differentiated and buyers have high switching costs. E. buyer demand is growing slowly or declining and the number of competitors is increasing and they become more equal in size and competitive capability.

E. buyer demand is growing slowly or declining and the number of competitors is increasing and they become more equal in size and competitive capability.

Rivalry among competing sellers grows in intensity when: A. rivals' products/services are sold at widely varying prices and there are only a few rivals. B. rivals have highly differentiated products and buyer demand is growing rapidly. C. there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members. D. the products/services of rivals are strongly differentiated and buyers have high switching costs. E. buyer demand is growing slowly or declining and the number of competitors is increasing and they become more equal in size and competitive capability.

E. buyer demand is growing slowly or declining and the number of competitors is increasing and they become more equal in size and competitive capability.

Each of the following is likely to help a company's low-cost provider strategy succeed EXCEPT: A. resources and capabilities to keep costs below those of its competitors. B. cost-effective management of value chain activities better than rivals. C. effective leveraging of cost drivers. D. having the innovative capability to bypass certain value chain activities being performed by rivals. E. capabilities to simultaneously deliver lower cost and higher-quality/differentiated features.

E. capabilities to simultaneously deliver lower cost and higher-quality/differentiated features.

99. The competitive advantage opportunities that a global competitor can gain by dispersing performance of its activities across many nations include all of the following Except:

E. centralizing value chain activities to foster just-in-time inventory activities.

The competitive advantage opportunities that a global competitor can gain by dispersing performance of its activities across many nations include all of the following, EXCEPT: A. being able to shift production from one country to another to take advantage of exchange rate fluctuations, differing wage rates, differing energy costs, or differing trade restrictions. B. being in better position to choose where and how to challenge rivals. C. shortening delivery times to customers by having geographically scattered distribution facilities. D. locating buyer-related activities (such as sales, advertising, after-sale service and technical assistance) close to buyers. E. centralizing value chain activities to foster just-in-time inventory activities.

E. centralizing value chain activities to foster just-in-time inventory activities.

An alliance becomes "strategic" as opposed to just a convenient business arrangement when it serves all of the following strategic purposes EXCEPT: A. builds, sustains, or enhances a core competence or competitive advantage. B. blocks a competitive threat. C. increases the bargaining power of alliance members over suppliers or buyers. D. opens up important new market opportunities. E. contracts out certain value chain activities that are normally performed in-house to outside vendors.

E. contracts out certain value chain activities that are normally performed in-house to outside vendors.

Approaches to enhancing differentiation through changes in the value chain do NOT include: A. coordinating with retailers to enhance the buying experience and building a company's image. B. coordinating with suppliers to speed up new product development cycles. C. coordinating with distributors or shippers to lower shipping costs. D. collaborating with suppliers to improve many dimensions affecting product features and quality. E. coordinating with employees to create a greater incentive systems to encourage worker productivity

E. coordinating with employees to create a greater incentive systems to encourage worker productivity

A company that has greater success in managing its strategic alliance can credit all of the following, EXCEPT: A. establishing strong interpersonal relationships to facilitate communication. B. incorporating contractual safeguards. C. making opportunities for learning a routine management process. D. establishing a system to manage alliances in a systematic fashion. E. creating organizational learning barriers across boundaries.

E. creating organizational learning barriers across boundaries.

The means to enhance differentiation through activities at the forward end of the value chain system do NOT include: A. engaging in cooperative advertising and promotions. B. creating exclusive arrangements with downstream sellers or other mechanisms that increase their incentives for enhanced-delivery customer value. C. creating and enforcing standards for downstream activities. D. assisting in training channel partners in business practices. E. enhancing cost-reducing activities with defensive functionality designed to create incentives.

E. enhancing cost-reducing activities with defensive functionality designed to create incentives.

Capturing the benefits of strategic alliances is not easy, but success generally is a function of all of the following factors, EXCEPT: A. being sensitive to cultural differences B. managing the learning process and allowing for emerging circumstances C. picking a good partner with good chemistry D. recognizing that the alliance must benefit both sides E. ensuring the division of work is directly apportioned to appropriate skill sets

E. ensuring the division of work is directly apportioned to appropriate skill sets

Viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets include all of the following, EXCEPT: A. trying to change the local market to better match the way the company does business elsewhere. B. being prepared to modify aspects of the company's business model to accommodate local circumstances. C. preparing to compete on the basis of low price. D. staying away from those emerging markets where it is impractical to modify the company's business model to accommodate local circumstances. E. focusing on local markets whose circumstances will be most challenging to the company's business model.

E. focusing on local markets whose circumstances will be most challenging to the company's business model.

61. Multidomestic competition is best characterized as a situation where: ␣ ␣

E. there is no international or global market, just a collection of mostly self-contained country markets.

Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as A. cultural, lifestyle, and demographic changes. B. the birth of new industries, new knowledge, and disruptive technologies. C. weather, climate change, and water shortages. D. interest rates, exchange rates, unemployment rates, inflation rates, and economic growth. E. how often sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently.

E. how often sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently.

2. The reasons why a company opts to expand outside its home market include all of the following except

E. identifying resources and capabilities in the company's home market.

The reasons why a company opts to expand outside its home market include all of the following EXCEPT: A. gaining access to new customers for the company's products/services. B. spreading its business risk across a wider market base. C. achieving lower costs through economies of scale, experience, and increased purchasing power. D. exploiting its core competencies and capabilities. E. identifying resources and capabilities in the company's home market.

E. identifying resources and capabilities in the company's home market.

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous in all of the following situations, EXCEPT: A. when high transportation costs make it expensive to operate from central locations. B. whenever buyer-related activities are best performed in locations close to buyers. C. if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations. D. when it is desirable to hedge against (1) the risks of fluctuating exchange rates, (2) supply interruptions or (3) adverse political developments. E. if resources retain their foreign contexts so there is competitive advantage over a broader domain.

E. if resources retain their foreign contexts so there is competitive advantage over a broader domain.

Not all positions on a strategic group map are equally attractive because A. entry and exit barriers are different for each strategic group. B. key success factors are usually quite different for differently positioned industry participants. C. small strategic groups are always less profitable than large strategic groups. D. across-group rivalry is strongest at the outer edges of the strategic group map. E. industry driving forces and competitive pressures favor some companies or groups and hurt others and the profit potential of different strategic groups varies because of strengths and weaknesses in each strategic group's position.

E. industry driving forces and competitive pressures favor some companies or groups and hurt others and the profit potential of different strategic groups varies because of strengths and weaknesses in each strategic group's position.

The principal offensive strategy options include all of the following EXCEPT: A. using a cost advantage to attack competitors on the basis of lower price or better product value. B. using hit-and-run or guerrilla warfare tactics to grab sales and market share from complacent or distracted rivals. C. launching a preemptive strike to secure an advantageous position that rivals are prevented or discouraged from duplicating. D. pursuing continuous product innovation to draw sales and market share away from less innovative rivals. E. initiating a market threat and counterattack simultaneously to effect a distraction.

E. initiating a market threat and counterattack simultaneously to effect a distraction.

An outsourcing strategy: A. is nearly always a more attractive strategic option than merger and acquisition strategies. B. carries the substantial risk of raising a company's costs. C. carries the substantial risk of making a company overly dependent on its suppliers. D. increases a company's risk exposure to changing technology and/or changing buyer preferences. E. involves farming out certain value chain activities presently performed in-house to outside vendors.

E. involves farming out certain value chain activities presently performed in-house to outside vendors.

Competitive jockeying and market maneuvering among industry rivals A. determines whether the industry's strategic group map will be static or dynamic. B. centers around collaborative efforts to overcome the bargaining power of powerful suppliers and powerful buyers. C. is usually an industry's strongest driving force. D. is usually one of the two or three weakest competitive forces because of the close familiarity that rivals have for one another's likely next moves. E. is ever-changing as fresh offensive and defensive moves are initiated and as rivals emphasize first one mix of competitive weapons and tactics and then another.

E. is ever-changing as fresh offensive and defensive moves are initiated and as rivals emphasize first one mix of competitive weapons and tactics and then another.

Market maneuvering among industry rivals: A. determines whether the industry's strategic group map will be static or dynamic. B. centers around collaborative efforts to overcome the bargaining power of powerful suppliers and powerful buyers. C. is usually an industry's strongest driving force. D. is usually one of the two or three weakest competitive forces because of the close familiarity that rivals have for one another's likely next moves. E. is ongoing and dynamic, with moves and countermoves of rivals producing a continually evolving competitive landscape that delivers winners and losers.

E. is ongoing and dynamic, with moves and countermoves of rivals producing a continually evolving competitive landscape that delivers winners and losers

A company resource weakness or competitive deficiency A. represents a problem that needs to be turned into a strength because weaknesses prevent a firm from being a winner in the marketplace. B. causes the company to fall into a lower strategic group than it otherwise could compete in. C. prevents a company from having a distinctive competence. D. usually stems from having a missing link or links in the industry value chain. E. is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace.

E. is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace.

Which one of the following is not an advantage of setting "stretch" objectives?

Helping clarify the company's strategic vision and strategic intent

Which one of the following is NOT an advantage of setting "stretch" objectives?

Helping clarify the company's strategic vision and strategic intent.

A "think local, act local" multidomestic strategy works particularly well in all of the following situations, EXCEPT when there are: A. regulations enacted by the host governments requiring that products sold locally meet strictly defined manufacturing specifications or performance standards. B. significant country-to-country differences in customer preferences and buying habits. C. diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country-to-country. D. significant country-to-country differences in distribution channels and marketing methods. E. large demands to pursue conflicting objectives simultaneously.

E. large demands to pursue conflicting objectives simultaneously.

66. The characteristics of a world market where global competition prevails include: ␣ ␣

E. low barriers to entry, such a large number of rivals that the actions of any one rival have little impact on . the sales and market shares of other rivals, and key success factors that vary from country to country.

Being first to initiate a particular strategic move can have a high payoff in all of the following EXCEPT when: A. pioneering helps build up a firm's image and reputation and creates strong brand loyalty. B. buyers remain strongly loyal to pioneering firms because of incentives and switching costs barriers. C. there is a steep learning curve and when learning can be kept proprietary. D. moving first can constitute a preemptive strike, making imitation extra hard or unlikely. E. market uncertainties make it difficult to ascertain what will eventually succeed.

E. market uncertainties make it difficult to ascertain what will eventually succeed.

The essence of a broad differentiation strategy is to: A. appeal to the high-end part of the market and concentrate on providing a top-of-the-line product to consumers. B. incorporate a greater number of differentiating features into its product/service than rivals. C. lower buyer switching costs. D. outspend rivals on advertising and promotion in order to inform and convince buyers of the value of its differentiating attributes. E. offer unique product attributes in ways that are valuable and appealing and that buyers consider worth paying for.

E. offer unique product attributes in ways that are valuable and appealing and that buyers consider worth paying for.

A differentiation-based competitive advantage: A. nearly always is attached to the quality and service aspects of a company's product offering. B. usually is the result of highly effective marketing and advertising to enhance the brand, raise awareness, and build consistent customer experience. C. requires developing at least one distinctive competence that buyers consider valuable. D. hinges on a company's success in developing top-of-the-line product features that will command the highest price premium in the industry. E. often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match.

E. often hinges on incorporating features that raise the performance of the product or lower the buyer's overall costs of using the company's product, or enhances buyer satisfaction in intangible or noneconomic ways, or delivers value to customers by differentiating on the basis of competencies and capabilities that rivals can't match.

Once a company has decided to employ a particular generic competitive strategy, then it must make the following additional strategic choices, EXCEPT whether to: A. focus on building competitive advantages. B. employ the element of surprise as opposed to doing what rivals expect and are prepared for. C. display a strong bias for swift, decisive, and overwhelming actions to overpower rivals. D. create and deploy company resources to cause rivals to defend themselves. E. pay special attention to buyer segments that a rival is already serving.

E. pay special attention to buyer segments that a rival is already serving.

An option for NOT remedying an internal cost disadvantage includes: A. investing in productivity-enhancing, cost-saving technological improvements. B. redesigning the product or some of its components to facilitate speedier and more economical manufacture or assembly. C. implementing the use of best practices throughout the company, particularly for high-cost activities. D. eliminating some cost-producing activities altogether by revamping the value chain. E. performing activities in the same way as done earlier.

E. performing activities in the same way as done earlier.

The risks of strategic alliances often include all of the following EXCEPT: A. conflicting objectives and strategies. B. deep differences of opinion about how to proceed operationally and strategically. C. important differences in corporate values. D. misunderstandings about appropriate ethical standards. E. potential for royalty from trustworthy firms.

E. potential for royalty from trustworthy firms.

A company's resource weaknesses can relate to all of the following EXCEPT: A. inferior or unproven skills, expertise, or intellectual capital in competitively important parts of the business. B. something that it lacks or does poorly in comparison to rivals. C. deficiencies in competitively important physical, organizational, or intangible assets. D. missing or competitively inferior capabilities in key areas. E. rare resources and capabilities.

E. rare resources and capabilities.

Competing companies deploy whatever means necessary to strengthen market position, including all of the following EXCEPT: A. marketing tactics including special sales promotions such as introducing new or improved features or increasing the number of styles to provide greater product selection. B. differentiating their products by offering better performance features than rivals. C. improving innovation to increase product performance and quality. D. making efforts to expand dealer networks. E. reduce distribution capabilities and market presence.

E. reduce distribution capabilities and market presence.

A company that fails to manage its strategic alliance probably has: A. incorporated contractual safeguards. B. made opportunities for learning a routine management process. C. created a system to manage alliances in a systematic fashion. D. established strong interpersonal relationships and established trust. E. refrained from making commitments to its partners and ensured they do the same.

E. refrained from making commitments to its partners and ensured they do the same.

Which of the following conditions generally raise the barriers to entering an industry?

High capital requirements, difficulties in building a network of distributors-retailers and securing adequate space on retailers' shelves, and the likelihood that industry incumbents will strongly contest the efforts of new entrants to gain a market foothold

With the aid of a strategic group map, one can: A. identify easily the entry and exit barriers for each strategic group. B. pinpoint precisely which firms are in profitable strategic groups and which are not. C. identify which competitive forces are strong and which are weak. D. measure accurately whether across-group rivalry is stronger than within-group rivalry, and vice versa. E. reveal which companies are close competitors and which are distant rivals, and that not all positions on the map are equally attractive.

E. reveal which companies are close competitors and which are distant rivals, and that not all positions on the map are equally attractive.

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

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

Challenging a struggling rival can do all of the following EXCEPT: A. sap the rival's financial strength and competitive position. B. weaken the rival's resolve. C. accelerate the rival's exit from the market. D. threaten the rival's overall survival in the market. E. strengthen the rival's loyal following.

E. strengthen the rival's loyal following.

A broad differentiation strategy works best in situations where: A. technological change is slow-paced and new or improved products are infrequent. B. buyer needs and uses of the product are very similar. C. buyers incur low costs in switching their purchases to rival brands. D. buyers have a low degree of bargaining power and purchase the product frequently. E. technological change is fast-paced and competition revolves around rapidly evolving product features.

E. technological change is fast-paced and competition revolves around rapidly evolving product features.

In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations in all of these situations, EXCEPT when: A. there are significant scale economies in performing an activity. B. the costs of manufacturing or other activities are significantly lower in some geographic locations than in others. C. when there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations). D. certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. E. the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

E. the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

Which one of the following is not part of a company's broad macro-environment? A. conditions in the economy at large. B. population demographics and societal values and lifestyles. C. technological and ecological factors. D. governmental regulations and legislation. E. the company's resource strengths, resource weaknesses, and competitive capabilities.

E. the company's resource strengths, resource weaknesses, and competitive capabilities.

The difference between a merger and an acquisition relates to: A. strategy and competitive advantage. B. the presence of available resources and competitive capabilities. C. whether the end result is related to horizontal or vertical scope. D. creating a more cost-efficient operation out of the combined companies. E. the details of ownership, management control, and the financial arrangements.

E. the details of ownership, management control, and the financial arrangements.

25. One of the big risks of competing in foreign markets is:

E. the extent to which the advantages of manufacturing goods in a particular country can be wiped out . when fluctuating exchange rates result in that country's currency growing stronger relative to the currencies of the countries where the output is being sold.

Buyer bargaining power is stronger when: A. winning the business of certain high-profile customers offers a seller important market exposure or prestige. B. the extent and importance of collaborative partnerships and alliances between particular sellers and buyers is credible. C. buyers cannot integrate backward into the product market of sellers. D. sellers' products are differentiated, making it easy and inexpensive for buyers to switch to competing brands. E. the industry's products are standardized or undifferentiated.

E. the industry's products are standardized or undifferentiated.

First-mover disadvantages (or late-mover advantages) rarely ever arise when: A. the costs of pioneering are much higher than being a follower and only negligible learning/experience curve benefits accrue to the pioneer. B. rapid market evolution gives fast followers an opening to leapfrog the pioneer with next-generation products of their own. C. the pioneer's products are somewhat primitive and do not live up to buyer expectations, allowing clever followers to win disenchanted buyers with better-performing products. D. the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover. E. the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.

E. the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.

100.Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous except when ␣

E. there are reasons to decouple buyer-related activities in favor of locational advantages.

Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous, EXCEPT when: A. buyer-related activities (such as sales, advertising, after-sale service and technical assistance) need to take place close to buyers. B. buyers demand short delivery times and/or high transportation costs make it uneconomical to operate from one or just a few locations. C. it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and adverse political developments. D. there are diseconomies of scale in trying to operate from a single location. E. there are reasons to decouple buyer-related activities in favor of locational advantages.

E. there are reasons to decouple buyer-related activities in favor of locational advantages.

The best test of whether potential entry is a strong or weak competitive force is A. the strength of buyer loyalty to existing brands. B. whether the industry's driving forces make it harder or easier for new entrants to be successful. C. whether the strategies of industry members are well matched to the industry's key success factors. D. whether the industry offers an opportunity for a blue ocean strategy. E. to ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates.

E. to ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates.

The best test of whether potential entry is a strong or weak competitive force is: A. the strength of buyer loyalty to existing brands. B. whether the industry's driving forces make it harder or easier for new entrants to be successful. C. whether the strategies of industry members are well-matched to the industry's key success factors. D. whether there are any vacant spaces on the industry's strategic group map. E. to ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates.

E. to ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates.

Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is: A. to be the first mover. B. to be a fast follower. C. to be a late mover (because it is cheaper and easier to imitate the successful moves of the leaders and moving late allows a company to avoid the mistakes and costs associated with trying to be a pioneer—first-mover disadvantages usually overwhelm first-mover advantages). D. to be the last-mover—playing catch-up is usually fairly easy and almost always is much cheaper than any other option. E. to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.

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

A global strategy is one in which a company performs all of the following tasks, EXCEPT: A. employs the same basic competitive approach in all countries where it operates. B. sells much of the same products everywhere. C. strives to build global brands. D. coordinates its actions worldwide with strong headquarters control represents a think-global, act-global approach. E. uses local brand names to cater to a country's specific needs.

E. uses local brand names to cater to a country's specific needs.

Strategic Group mapping analysis does not entail drawing conclusions about: A. where on the map is the best place to be and why. B. which companies/strategic groups are destined to prosper because of their positions. C. which companies/strategic groups seem destined to struggle. D. what accounts for why some parts of the map are better than others. E. where on the map is the easiest position to shift from to a more favorably situated position.

E. where on the map is the easiest position to shift from to a more favorably situated position.

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on A. whether most buyers possess roughly equal or varying degrees of bargaining power. B. how many buyers are engaged in collaborative partnerships with sellers. C. whether entry barriers are high or low. D. whether the overall quality of the items being furnished by industry members is rising or falling. E. whether buyer demand is strong or declining.

E. whether buyer demand is strong or declining.

A strategy of vertical integration can have both important strengths and weaknesses depending on all of the following, EXCEPT: A. whether it can limit the performance of strategy-critical activities in ways that increase cost, build expertise, protect proprietary know-how, or increase differentiation. B. the impact on investment costs, flexibility, and response times. C. the administrative costs of coordinating operations across more vertical chain activities. D. how difficult it will be for the company to acquire the set of skills and capabilities needed to operate in another stage of the vertical chain. E. whether competitors outsource any of their value chain activities.

E. whether competitors outsource any of their value chain activities.

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on: A. the degree to which buyers have any bargaining preferences and the extent to which buyers are price-sensitive. B. how many buyers are engaged in collaborative partnerships with sellers. C. whether entry barriers are high or low and the size of the pool of likely entry candidates. D. whether the overall quality of the items being furnished by industry members is rising or falling. E. whether demand-supply conditions represent a buyer's market or a seller's market.

E. whether demand-supply conditions represent a buyer's market or a seller's market.

The competitive power of a company resource strength or competitive capability hinges on all of the following EXCEPT: A. how hard it is for competitors to copy. B. whether it is rare and something rivals lack. C. whether it is really competitively valuable and has the potential to contribute to a competitive advantage. D. whether it is nonsubstitutable E. whether it available in plenty.

E. whether it available in plenty.

Companies operating in an international marketplace have to respond to all of the following, EXCEPT: A. whether to customize their offerings in each different country market to match the tastes and preferences of local buyers. B. whether to pursue a strategy of offering a mostly standardized product worldwide. C. how much to customize their offerings in each different country market to match the tastes and preferences of local buyers. D. the tensions between market pressures to localize a company's product offerings country by country and the competitive pressures to lower costs through greater product customization. E. whether to buy a struggling competitor at a bargain price or pay a premium to gain entry to the local market.

E. whether to buy a struggling competitor at a bargain price or pay a premium to gain entry to the local market.

31. The competitiveness of any company's facilities in any country is partly dependent upon: ␣ ␣

E...ALL OF THESE: A. whether exchange rate changes over time have a favorable or unfavorable cost impact. B. exchange rate movements, which are unpredictable, swinging, first one way and then another way. C the government's currency growing weaker in relation to the currencies of the countries where the . lower-cost imports are being made. D. a weak currency. E. All of these

9. Competing in the markets of foreign countries generally does NOT involve which of the following?

ECrafting a multidomestic strategy that works just as well in one country as in another and that also has . the appeal of turning the world market into a mostly homogeneous market.

Which of the following is NOT one of the benefits of outsourcing value chain activities presently performed in-house?

Enables a company to gain better access to end users and better market visibility.

Which of the following is not among the principal managerial tasks associated with managing the strategy execution process?

Engaging the services of staffing firms to maintain the company's personnel data

4. Explain why a company's strategy cannot be completely planned out in advance and why crafting a company's strategy cannot be a one-time, once-and-for-all managerial exercise. Identify at least three factors that account for why company strategies evolve. Give examples. (pg. 8)

Factors such as; changing market conditions, advancing technology, shifting buyer's needs and unexpected moves by competitors.

A good example of vertical integration is:

a crude oil refiner purchasing a firm engaged in drilling and exploring for oil.

Which of the following rivals make the best targets for an offensive attack?

Firms with weaknesses in areas where the challenger is strong.

The most powerful and widely used tool for diagnosing the principle competitive pressures in a market is the

Five Forces Model

Which of the following statements about fluctuating exchange rates and the related effects on companies competing in foreign markets is true? A. Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets. B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Companies that are manufacturing goods in a particular country and are exporting much of what they produce lose out when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. D. The advantages of manufacturing goods in a particular country improve when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E. Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets.

Which of the following is a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche

Which of the following is a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche.

B) resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower

For a best-cost provider strategy to be successful, a company must have A) excellent marketing and sales skills in convincing buyers to pay a premium price for the attributes/ features incorporated in its product. B) resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes. C) access to greater learning/experience curve effects and scale economies than rivals. D) one of the best-known and most respected brand names in the industry. E) a short, low-cost value chain.

Which of the following ways are employed by defending companies to fend off a competitive attack?

Gain product line exclusivity to force competitors to use other distributors.

Which of the following is typically the strategic impetus for forward vertical integration?

Gaining better access to end users and better market visibility.

Which of the following are characteristics of an effectively-worded strategic vision statement?

Graphic, directional, and focused

Which of the following are characteristics of an effectively worded strategic vision statement?

Graphic, directional, and focused.

Which of the following does NOT represent a potential core competence?

Having a wider product line than rivals

Which of the following is NOT a good example of a company's resources?

Having higher earnings per share and a higher stock price than key rivals

Which one of the following is NOT among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned?

Hiring and firing senior-level executives and working with the company's chief strategic planning officer to improve the company's strategy when performance comes up short of expectations.

Managers in all types of businesses must address the central strategic question

How are we going to get there?

1) Which of the following is NOT one of the managerial considerations in determining how to compete successfully?

How can a company modify its entire product line to emphasize its internal service attributes?

Which of the following is NOT one of the managerial considerations in determining how to compete successfully?

How can the company modify its entire product line to emphasize their internal service attributes?

Which of the following is not a major question to ask in thinking strategically about industry and competitive conditions in a given industry?

How many companies in the industry have good track records for revenue growth and profitability?

Which of the following is not an important factor for company managers to consider in drawing conclusions about whether the industry presents an attractive opportunity?

How many of the industry's key success factors do companies in the industry typically incorporate into their strategies

Which of the following is not something a company's strategy is concerned with

How quickly and closely to copy the strategies being used by successful rival companies

Which of the following is NOT a primary focus of a company's strategy?

How to achieve above-average gains in the company's stock price and thereby meet or beat shareholder expectations

Which of the following is not a primary focus of a company's strategy?

How to achieve above-average gains in the company's stock price and thereby meet or beat shareholder expectations

A) whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match

How valuable a low-cost leader's cost advantage depends on A) whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs. B) how easy it is for the low-cost leader to gain the biggest market share. C) the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs. D) the leader's ability to combine the cost advantage with a reputation for good quality. E) the low-cost leader's ability to be the industry leader in manufacturing innovation so as to keep lowering its manufacturing costs.

What question can be used to distinguish a winning strategy from a mediocre or losing strategy ?

How well does the strategy fit the company's situation?

Which of the following questions can be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy?

How well does the strategy fit the company's situation?

Which one of the following questions can be used to distinguish a winning strategy from a mediocre or losing strategy?

How well does the strategy fit the company's situation?

Which one of the following questions can be used to distinguish a winning strategy from a mediocre or losing strategy?

How well does the strategy fit the company's situation?

Which of the following statements regarding multidomestic and global competition is false? A. In global competition, rivals vie for worldwide market leadership and the leading competitors compete head to head in the markets of many different countries. B. In globally competitive industries, a company's competitive position in one country both affects and is affected by its position in other countries. C. One of the features of multidomestic competition is there is greater cross-country variation in market conditions and the nature of the competitive contest among rivals than tends to be the case in globally competitive markets. D. With multidomestic competition, the competitive contest is localized, with rivals battling for national market leadership; moreover, winning in one country market does not necessarily signal that a company has the ability to fare well in the markets of other countries. E. In global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in each country market where it competes.

In global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in each country market where it competes.

Which of the following statements regarding global competition is false? A. In global competition, rivals vie for worldwide market leadership. B. In globally competitive industries, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets. C. In global competition, a firm's overall competitive advantage (or disadvantage) grows out of its entire worldwide operations. D. In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails. E. In global competition, many of the same rival companies compete against each other in many different countries, but especially so in countries where sales volumes are large and where having a competitive presence is strategically important to building a strong global position in the industry.

In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails.

D) When buyers have widely varying needs and special requirements and the prices of substitute products

In which of the following circumstances is a strategy to be the industry's overall low-cost provider not particularly well matched to the market situation? A) When the offerings of rival firms are essentially identical, standardized, commodity-like products B) When there are few ways to achieve differentiation that have value to buyers C) When price competition is especially vigorous D) When buyers have widely varying needs and special requirements and the prices of substitute products are relatively high E) When entry barriers are low and there is a stream of newcomers to the industry

C) When the products of rivals are weakly differentiated and most competitors are resorting to clever

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 the products of rivals are weakly differentiated and most competitors are resorting to clever advertising to try to set their product offerings apart 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

Which of the following is the best example of a well-stated financial objective?

Increase earnings per share by 15 percent annually.

Which of the following is the best example of a well-stated financial objective?

Increase earnings per share by 15% annually

Which one of the following is NOT a common type of driving force?

Increasing efforts to collaborate closely with suppliers

Which of the following are most UNLIKELY to qualify as driving forces?

Increasing efforts to collaborate with suppliers via strategic alliances and partnerships, escalating risk levels and normalization of cost and efficiency in the industry

The competitive power of a company's resource strength is NOT measured by which one of the following tests?

Is the resource strength something that a company does internally rather than in collaborative arrangements with outsiders?

Which of the following questions tests the merits of the firm's strategy and distinguishes it as a winning strategy?

Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?

Which of the following questions ought to be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy?

Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?

Which of the following questions tests the merits of the firm's strategy and distinguishes it as a winning strategy?

Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance?

Which of the following questions ought to be used to distinguish a winning strategy from a so-so or flawed strategy?

Is the strategy well-matched to the company's situation, helping the company achieve a sustainable competitive advantage, and resulting in better company performance?

Which of the following is NOT one of the problems and risks of cross-border alliances between domestic and foreign firms? A. Overcoming language and cultural barriers. B. The amount of time required to build trust, effective communication, and coordination between allies. C. Developing mutually agreeable ways of dealing with key issues or differences. D. Making it harder to pursue a multidomestic strategy as compared to a global strategy. E. Suspicions about whether allies are being forthright in exchanging information and expertise.

Making it harder to pursue a multidomestic strategy as compared to a global strategy.

What can happen when international rivals compete against one another in multiple-country markets? A. Businesses create attractive industries that would have otherwise badly deteriorated. B. It could produce a business lineup consisting of too many slow-growth, declining, low-margin, or competitively weak businesses. C. It could create a greater diversity in the types of value chain activities between each business. D. It could initiate a deterrence effect that encourages mutual restraint in taking aggressive action against one another due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war. E. It could increase shareholder interests by concentrating corporate resources on foreign business activities to contend for market leadership.

It could initiate a deterrence effect that encourages mutual restraint in taking aggressive action against one another due to the fear of a retaliatory response that might escalate the battle into a cross-border competitive war.

What is a primary drawback of a localized multidomestic strategy? A. It hinders the use of cross-border coordination of a company's activities and increases a company's vulnerability to adverse shifts in currency exchange rates. B. It makes it very difficult to take into account significant country-to-country differences in distribution channels and marketing methods. C. It makes it difficult and costly to be responsive to country-to-country differences in customer needs, buying habits, cultural traditions, and market conditions. D. It hinders the transfer of a company's competencies and resources across country boundaries and hinders the pursuit of a single, uniform competitive advantage in all country markets where a company operates. E. It is unsuitable for competing in the markets of emerging countries and posing added difficulty in modifying a company's business model to compete on the basis of low price.

It hinders the transfer of a company's competencies and resources across country boundaries and hinders the pursuit of a single, uniform competitive advantage in all country markets where a company operates.

What is the best way to achieving the efficiency potential of a global strategy? A. It demands managerial attention to be focused on objective-setting specifically oriented toward production practices. B. It requires that resources and best practices be shared, value chain activities be integrated, and capabilities be transferred from one location to another as they are developed. C. It requires that the best identified resources and capabilities be centralized at headquarters. D. It requires value chain activities to be dispersed across many countries to elevate cost control management as a primary focus in all countries. E. All of these.

It requires that resources and best practices be shared, value chain activities be integrated, and capabilities be transferred from one location to another as they are developed.

Which of the following most accurately reflect a company's resource strengths?

Its human, physical and/or organization assets; its skills and competitive capabilities; and its achievements or attributes that enhance the company's ability to compete effectively

According to both the text discussion and the summary in Table 2.3, which of the following is not a common shortcoming of company vision statements?

Lacking in analysis—based more on managerial emotion and excessive ambition than on what is realistically achievable

Which one of the following pairs of variables is LEAST likely to be useful in drawing a strategic group map?

Level of profitability and size of market share

Why should long-run objectives take precedence over short-run objectives?

Long-run objectives are necessary for achieving long-term performance and block focus on short-term results and put the company in a position to perform better later

Which of the following is not an element of a company's business strategy?

Management actions to revise the company's financial and strategic performance targets

Which of the following is NOT something a company's strategy is concerned with?

Management's choices about how quickly and closely to copy the strategies being used by successful rival companies

E) Benchmarking

Meaning: Comparing how different companies preform various value chain activities Significance: Helps identify the best practices in performing an activity and to emulate the best practices of others Example: Back up cameras used to be a luxury item that many customers would purchase, however, now companies like Honda and Toyota are utilizing it in their vehicles

D) Activity based-costing

Meaning: Evaluating a company's cost competitiveness compared to its competitors costs in primary and secondary activities Significane: Determines the cost of performing each activity in the value chain and determining its strengths and weaknesses which can hinder the customer value proposition Example: If a company is shipping it's product for $X and the competitor is doing it for less, the activity based costing method will showcase that information and allow the company to negotiate a bettie price or find a cheaper supplier.

A) SWOT Analysis:

Meaning: Evaluating whether a company is in position to pursue market opportunities or needs to defend against external threats. This is done by examining internal strengths and weaknesses, market opportunities, and external threats Significance: Provides a basis for crafting a strategy that capitalizes on company's strengths, overcomes weaknesses, aims at capturing opportunities, and defending against threats

B) Company Value Chain:

Meaning: Identifies the primary activities and related support activities that create customer Value Significance: Ideal tool for examine the workings of a company's customer value proposition and business model. It allows for a deep look at the company's cost structure and ability to offer low prices. Example: Walmart is one of Target's main competitors, so Target uses company value chain analysis to determine ways to compete against Walmart's low price.

C) Industry Value Chain

Meaning: Seeking cost competitiveness in suppliers by looking into their value chain, and cost competitiveness of distribution channels Significance: It pressures suppliers, distributors, etc to reduce costs, determine win-win opportunities, or find other more economical strategies. Example: A car manufacturer determines that his input costs are higher if the supplier cleans the car. The car manufacturer cleans the part himself and cuts costs.

Which of the following is NOT one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits?

Minimizing the amount of resources that the partners commit to the alliance.

Which of the following is NOT generally a "driving force" capable of producing fundamental changes in industry and competitive conditions?

Movement in the economy and in interest rates

Which of the following is NOT a typical host government requirement that affects the operations of foreign companies? A. Establishing local content requirement on goods made inside their borders by foreign companies. B. Having rules and policies that protect local companies from foreign competition. C. Placing restrictions on exports to ensure adequate local supplies. D. Requiring foreign companies to use vertical integration to support operations of local companies. E. Imposing burdensome tax structures and regulatory requirements upon foreign companies doing business within their borders.

Requiring foreign companies to use vertical integration to support operations of local companies.

A powerful tool for sizing up the company's competitive assets and determining whether they can provide the foundation necessary for competitive success in the marketplace is termed:

Resource and capability analysis

A) revamping the firm's value chain to eliminate or bypass some cost-producing activities and/or out-

The major avenues for achieving a cost advantage over rivals include A) revamping the firm's value chain to eliminate or bypass some cost-producing activities and/or out- managing rivals in the efficiency with which value chain activities are performed. B) having a management team that is highly skilled in cutting costs. C) being a first-mover in adopting the latest state-of-the-art technologies, especially those relating to low- cost manufacture. D) outsourcing high-cost activities to cost-efficient vendors. E) paying lower wages and salaries than rivals.

Which of the following principal aspects should be included in managing the strategy execution process?

Organizing the company along the lines of best practice

Which one of the following is not an accurate attribute of an organization's strategic vision?

Outlining how the company intends to implement and execute its business model

Which one of the following is NOT an accurate attribute of an organization's strategic vision?

Outlining how the company intends to implement and execute its business model.

Which of the following is the best example of a well-stated strategic objective?

Overtake key competitors on product performance or quality within three years.

Which of the following is the best example of a well-stated strategic objective?

Overtake key competitors on product quality within three years

What is the framework that comprises a set of major factors (that vary from country to country) that describe the nature of each country's business environment? A. Porter's five forces model. B. Porter's Diamond of National Competitive Advantage. C. Ricardo's economic rule of comparative advantage. D. International Business Agenda for Global Environment (IBAGE). E. All of these.

Porter's Diamond of National Competitive Advantage.

Which of the following is NOT a potential advantage of backward vertical integration?

Reduced business risk because of controlling a bigger portion of the overall industry value chain.

A winning strategy must pass which three tests?

The Fit Test, the Competitive Advantage Test, and the Performance Test

Which of the following is NOT a component of evaluating a company's resources and competitive position?

Scanning the environment to determine a company's best and most profitable customers

Which of the following is the most unlikely element of a "think global, act global" approach to crafting a global strategy? A. Minimal responsiveness to buyer tastes, cultural traditions, and market conditions in each country market. B. Scattering plants across many countries, with each plant producing product versions for local area markets. C. Utilizing the same competitive capabilities, distribution channels, and marketing approaches worldwide. D. Requiring local managers in host countries to stick close to the chosen global strategy. E. Selling much the same products under the same brand names worldwide.

Scattering plants across many countries, with each plant producing product versions for local area markets.

Which of the following is the most unlikely element of a localized multidomestic strategy? A. Granting country managers fairly wide strategy-making latitude. B. Plants scattered across many host countries, each producing product versions for local area markets. C. Marketing and distribution adapted to the buying habits, customs, and culture of each host country. D. Preference for local suppliers (use of some local suppliers may be mandated by host governments). E. Selling direct to buyers (perhaps via the company's website) to avoid having to establish networks of wholesale/retail dealers in each country market.

Selling direct to buyers (perhaps via the company's website) to avoid having to establish networks of wholesale/retail dealers in each country market.

Which of the following is an integral part of the managerial process of crafting and executing strategy?

Setting objectives and using them as yardsticks for measuring the company's performance and progress

Which of the following is an integral part of the managerial process of crafting and executing strategy?

Setting objectives and using them as yardsticks for measuring the company's performance and progress.

What two factors inhibit the ability of rivals to imitate a firm's most valuable resources and capabilities?

Social complexity and causal ambiguity

What is the best technique for revealing the different market or competitive position that rival firms occupy in the industry?

Strategic group mapping

What does a company specifically exhibit when it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective?

Strategic intent.

The competitive moves and business approaches a company's management is using to grow the business, compete successfully, attract and please customers, conduct operations, respond to changing economic and market conditions, and achieve organizational objectives is referred to as its

Strategy

3. List six things to look for in identifying the components of an organization's strategy. Give examples of each? (noel gave it to me)

Strategy is all about How: ●How to attract and please customers. ●How to compete against rivals. ●How to position the firm in the marketplace. ●How best to respond to changing economic and market conditions. ●How to capitalize on attractive opportunities ●How to achieve the firm's performance targets.

Which of the following is NOT a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins

Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins

Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

Striving to be more profitable than rivals by aiming for a competitive edge based on bigger profit margins

D) command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its

Successful differentiation allows a firm to A) be the industry's best-cost provider. B) set the industry ceiling on price. C) avoid being dragged into a price war with industry rivals and not be overly concerned about whether entry barriers into the industry are high or low. D) command a premium price for its product, and/or increase unit sales, and/or gain buyer loyalty to its brand. E) take sales and market share away from rivals by undercutting them on price.

Which of the following is MOST likely to qualify as a driving force?

Successful introduction of innovative new products or new ways to market products

Greenfield ventures, like all market entry strategies can pose serious problems to achieving foreign market entry success. What is not deemed a barrier to success? A. Such ventures can require costly capital investments and are the slowest entry route for building the business. B. Such ventures can have a tendency to divert valuable resources from current business. C. Such ventures really need well-functioning strong markets as well as well established institutions to ensure protection of foreign investor rights. D. Such ventures require managerial talent experienced in getting new subsidiaries up and running. E. Such ventures can be costlier than making an acquisition.

Such ventures require managerial talent experienced in getting new subsidiaries up and running.

Which of the following is NOT among the principal managerial tasks associated with managing the strategy execution process?

Surveying employee's opinions on how costs can be reduced and how employee morale and job satisfaction can be improved.

Executing the strategy

Surveying employees on how they think costs can be reduced and how employee morale and job satisfaction can be improved

. A winning strategy must pass which three tests?

The Fit Test, the Competitive Advantage Test, and the Performance Test

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is NOT accurate? A. Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets. B. The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Exporters win when the currency of the country from which the goods are being exported grows weaker relative to the currencies of the countries that the goods are being exported to. D. The advantages of manufacturing goods in a particular country can be undermined when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E. Domestic companies under pressure from lower-cost imports are benefited when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates.

Which of the following is NOT a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement?

The alliance helps the company obtain additional financing on better credit terms.

C) whether a company's market target is broad or narrow and whether the company is pursuing a

The biggest and most important differences among the competitive strategies of different companies boil down to A) how they go about building a brand name image that buyers trust and whether they are a risk-taker or risk-avoider. B) the different ways that companies try to cope with the five competitive forces. C) whether a company's market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation. D) the kinds of actions companies take to improve their competitive assets and reduce their competitive liabilities. E) the relative emphasis they place on offensive versus defensive strategies.

Which of the following is a clear representation of a company's capability?

The capacity of a firm to perform some activity

A) the size of the buyer group that a company is trying to appeal to.

The chief difference between a broad differentiation strategy and a focused differentiation is A) the size of the buyer group that a company is trying to appeal to. B) the degree of bargaining power that buyers have. C) whether the product is strongly differentiated or weakly differentiated from rivals. D) the type of value chain being used to achieve a differentiation-based competitive advantage. E) the number of upscale attributes incorporated into the product offering.

C) the size of the buyer group that a company is trying to appeal to.

The chief difference between a low-cost provider strategy and a focused low-cost strategy is A) whether the product is strongly differentiated or weakly differentiated from rivals. B) the degree of bargaining power that buyers have. C) the size of the buyer group that a company is trying to appeal to. D) the type of value chain being used to achieve a low-cost competitive advantage. E) the number of upscale attributes incorporated into the product offering.

Which of the following is NOT pertinent in identifying a company's present strategy?

The company's mission, strategic objectives, and financial objectives

Which one of the following is not part of a company's macroenvironment?

The company's resource strengths, resource weaknesses, and competitive capabilities

C) its capability to incorporate upscale attributes at lower costs than rivals whose products have similar

The competitive advantage of a best-cost provider is A) having the best value chain in the industry. B) its brand name reputation. C) its capability to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes. D) a distinctive competence in delivering top-notch quality and customer service. E) a distinctive competence in supply chain management.

Strategy

The competitive moves and business approaches a company's management is using to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve organizational objectives.

C) meet or exceed buyer expectations on key quality/performance/features/service attributes and beat

The competitive objective of a best-cost provider strategy is to A) outmatch the resource strengths of both low-cost providers and differentiators. B) position the company outside the competitive arena of low-cost producers and differentiators. C) meet or exceed buyer expectations on key quality/performance/features/service attributes and beat their expectations on price (given what rivals are charging for much the same attributes). D) deliver superior value to buyers by doing such a good job of cost control that it ends up with the best cost (as compared to rivals) in performing each activity in its value chain. E) identify and concentrate on those differentiating features that are inexpensive to incorporate.

E) be unique in ways that are valuable and appealing to a wide range of buyers.

The essence of a broad differentiation strategy is to A) appeal to the high end part of the market and concentrate on providing a top-of-the-line product to consumers. B) incorporate a greater number of differentiating features into its product/service than rivals. C) lower buyer switching costs. D) outspend rivals on advertising and promotion in order to inform and convince buyers of the value of its differentiating attributes. E) be unique in ways that are valuable and appealing to a wide range of buyers.

C) low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused

The generic types of competitive strategies include A) build market share, maintain market share, and slowly surrender market share. B) offensive strategies and defensive strategies. C) low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation. D) low-cost/low price strategies, high-quality/high price strategies, and medium quality/medium price strategies. E) price leader strategies, price follower strategies, technology leader strategies, first-mover strategies, offensive strategies, and defensive strategies.

What are two drawbacks of a "think local, act local" multidomestic strategy? A. The especially high vulnerability to fluctuating exchange rates and the fact it can usually be defeated by companies employing cross-border coordination techniques. B. The excessive vulnerability and exposure that exists to fluctuating exchange rates and the need to craft a separate strategy for each country market in which the company competes. C. The hindering of a company's transfer of competencies and resources across country boundaries (since somewhat different competencies and capabilities are likely to be employed in different host countries) and that it does not promote the building of a single unified competitive advantage in all country markets where a company competes. D. The greater exposure to both increases in tariffs and restrictive trade barriers and the added difficulty in accommodating the diverse trade restrictions and regulatory requirements of host governments. E. Not being able to export products manufactured in one country to markets in other countries and the fact that the strategy is largely unsuitable for competing in the markets of emerging countries.

The hindering of a company's transfer of competencies and resources across country boundaries (since somewhat different competencies and capabilities are likely to be employed in different host countries) and that it does not promote the building of a single unified competitive advantage in all country markets where a company competes.

Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity?

The industry's growth potential, whether competition appears destined to become stronger or weaker, and whether the industry's overall profit prospects are above average, average, or below average

Which of the following is NOT an example of an external threat to a company's future profitability?

The lack of a distinctive competence

Which of the following is NOT an example of a threat to a company's future profitability and well-being?

The lack of a well-known brand name with which to attract new customers and help retain existing customers

Which of the following factors is NOT a factor analyzed and relied on by firms when developing competitive strength in a foreign market? A. The relative size of the market, its growth potential, and the nature of domestic buyers' needs and wants. B. The availability, quality, and cost of raw materials and other inputs that firms will require to produce their products and services. C. The development of different styles of management, organization, and strategy. D. The degree of collaboration with key suppliers and the greater the knowledge sharing throughout the related-industry cluster. E. The level of industry-related support activities to foster customization of products and services.

The level of industry-related support activities to foster customization of products and services.

For a company to create a home country advantage and become competitively strong in a foreign market, it should base its strategy around which of the following factors? A. The proximity of suppliers, end users, and complementary industries. B. Different styles of management and organization and the degree of local rivalry. C. The availability and relative prices of inputs. D. Demand conditions in the industry's home market, including size and growth potential and the nature of domestic buyers' needs and wants. E. The level of rivalry existing in the foreign market.

The level of rivalry existing in the foreign market.

Which of the following most accurately describes the task of crafting a company's strategy?

The more a company's operations cut across different products, industries, and geographical areas, the more that headquarters executives have little option but to delegate considerable strategy-making authority to down-the-line managers in charge of particular subsidiaries, product lines, geographic sales offices, and plants.

Which of the following most accurately describes the task of crafting a company's strategy?

The more a company's operations cut across different products, industries, and geographical areas, the more the headquarters executives have little option but to delegate considerable strategy-making authority to down-the-line managers in charge of particular subsidiaries, product lines, geographic sales offices, and plants

In doing SWOT analysis, why is it not sufficient just to compile 4 lists (one each for resource strengths, resource weaknesses, market opportunities, and external threats) and then move on?

The most important part of SWOT analysis is using the 4 lists to draw conclusions about a company's overall situation and then acting on the conclusions in these lists to better match a company's strategy to its resource strengths and market opportunities, correct the important weaknesses, and defend against external threats.

Which of the following is NOT one of the basic reasons that a company's strategy evolves over time?

The need on the part of company managers to initiate fresh strategic actions that boost employee commitment and create a results-oriented culture.

Which of the following is not one of the basic reasons that a company's strategy evolves over time?

The need on the part of company managers to initiate fresh strategic actions that boost employee commitment and create a results-oriented culture

Which of the following is not one of the basic reasons that a company's strategy evolves over time?

The need on the part of company managers to make regular adjustments in the company's business model

A) deliver superior value to buyers by satisfying their expectations on key quality/performance/features/

The objective of a best-cost provider strategy is to A) deliver superior value to buyers by satisfying their expectations on key quality/performance/features/ service attributes and beating their expectations on price (given what rivals are charging for much the same attributes). B) offer buyers the industry's best-performing product at the best cost and best (lowest) price in the industry. C) attract buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. D) outcompete rivals using low-cost provider strategies. E) translate its best-cost status into achieving the highest profit margins of any firm in the industry.

B) knock the socks off rival companies by doing a better job of satisfying buyer needs and preferences.

The objective of competitive strategy is to A) contend successfully with the industry's 5 competitive forces. B) knock the socks off rival companies by doing a better job of satisfying buyer needs and preferences. C) get the company into the best strategic group and then dominate it. D) establish a competitively powerful value chain. E) grow revenues at a faster annual rate than rivals are able to grow their revenues.

Which of the following is not a relevant consideration in identifying an industry's dominant economic features?

The prevalence of technological change

Changing circumstances and ongoing managerial efforts to improve the strategy:

account for why a company's strategy evolves over time.

A) value-conscious buyers.

The target market of a best-cost provider is A) value-conscious buyers. B) brand-conscious buyers. C) price-sensitive buyers. D) middle-income buyers. E) young adults (in the 18-35 age group).

Which of the following is not an accurate description of the task of crafting a company's strategy?

The task of crafting strategy is best done by a company's chief strategic planning officer, who should report directly to the company's CEO and board of directors

Which of the following is NOT an accurate description of the task of crafting a company's strategy?

The task of crafting strategy is best done by a company's chief strategic planning officer, who should report directly to the company's CEO and board of directors.

Which of the following is NOT an appropriate guideline for developing a strategic group map for a given industry?

The variables chosen as axes for the map should be highly correlated.

A weaker U.S. dollar is an economically favorable exchange-rate shift for manufacturing plants based in the United States. A. This is a true statement. B. No, the U.S. dollar must be stronger. C. Yes, because it provides for a weakened foreign demand for U.S.-made goods. D. Yes, because it makes such plants less cost competitive with foreign plants. E. Yes, because it provides incentives of foreign companies to locate manufacturing facilities in the U.S. to make goods for U.S. consumers.

This is a true statement.

Which of the following BEST describes the market opportunities that tend to be most relevant to a particular company?

Those market opportunities that match up well with the firm's competitive assets, offer the best prospect for growth and profitability, and present the most potential for competitive advantage

How are a company's organizational capabilities developed and enabled?

Through deployment of a company's resources or some combination of its resources

Which of the following does NOT represent a company resource?

Through deployment of a company's resources or some combination of its resources

Why do companies decide to enter a market? A. To capture economies of scale in product development, manufacturing, or marketing. B. To raise input costs through greater pooled purchasing power. C. To increase the rate at which they disperse experience and move up the learning curve. D. To concentrate risk within a broader base of countries, especially when sales are down in one area and the company can undermine sales elsewhere. E. To exploit the natural resources found within its home market.

To capture economies of scale in product development, manufacturing, or marketing.

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack?

To dissuade challengers from attacking or diverting them into using less threatening options.

Which one of the following is NOT a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products?

To enable greater opportunities for employee advancement.

Which of the following is NOT a typical strategic objective or benefit that drives mergers and acquisitions?

To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy.

Which one of the following is NOT a reason why a company decides to enter foreign markets? A. To spread business risk across a wider geographic market base. B. To capitalize on company competencies and capabilities. C. To achieve lower costs through economies of scale, experience, and increased purchasing power. D. To gain economic incentives offered by governments of developing countries wishing to expand industry and job creation. E. To gain access to more buyers for the company's products/services.

To gain economic incentives offered by governments of developing countries wishing to expand industry and job creation.

Which of the following is NOT a purpose of a defensive strategy?

To increase the risk of having to defend an attack.

Which of the following is not a reason that industry rivals are often motivated to enter into strategic partnerships with key suppliers?

To reduce the bargaining power they face from buyers of their products

Which of the following is NOT a typical reason for companies to expand into the markets of foreign countries? A. To gain access to new customers, especially when a company encounters dwindling growth opportunities in its home market. B. To strengthen its capability to employ vertical integration strategies, especially those that involve partial integration (building positions in selected stages of the industry's value chain). C. To achieve lower costs and enhance the firm's competitiveness. D. To capitalize on company competencies and capabilities. E. To spread business risk across a wider geographic market base.

To strengthen its capability to employ vertical integration strategies, especially those that involve partial integration (building positions in selected stages of the industry's value chain).

D) do two things: (1) perform value chain activities more cost-effectively than rivals and (2) be proactive

To succeed with a low-cost provider strategy, c ompany managers have to A) pursue backward or forward integration to detour suppliers or buyers with considerable bargaining succeed with a low-cost provider strategy, company managers have to power and leverage. B) move the performance of most all value chain activities to low-wage countries. C) sell direct to users of their product or service and eliminate use of wholesale and retail intermediaries. D) do two things: (1) perform value chain activities more cost-effectively than rivals and (2) be proactive in revamping the firm's overall value chain to eliminate or bypass "nonessential" cost-producing activities. E) outsource the biggest majority of value chain activities.

Which of the following are common shortcomings of company vision statements?

Too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on superlatives

Which of the following ARE common shortcomings of company vision statements?

Too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on superlatives.

Which of the following is not a common shortcoming of company vision statements?

Too narrow--doesn't leave enough room for future growth

Which of the following is not among the most common types of driving forces?

Ups and downs in interest rates, changes in the number of seller-supplier collaborative alliances, and changes in overall industry profitability

Which of the following is NOT a viable strategy option for a local company in competing against global challengers? A. Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments. B. Developing business models to exploit shortcomings in local distribution networks or infrastructures. C. Taking advantage of low-cost labor and other competitively important local workforce qualities. D. Transferring a company's expertise to cross-border markets and initiating actions to contend on a global scale. E. Using acquisitions and rapid growth strategies to defend against expansion-minded multinationals.

Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments.

Which of the following is NOT a strategic disadvantage of vertical integration?

Vertical integration reduces the opportunity for achieving greater product differentiation.

Which of the following is NOT a prime example of a blue-ocean market strategy?

Walmart's logistics and distribution.

Which of the following is NOT one of the six questions that comprise the task of evaluating a company's resources and competitive position?

What are the company's most profitable geographic market segments?

Which of the following is NOT a question asked to deduce a marketing-related key success factor?

What are the industry product R&D capabilities and expertise in product design?

Which of the following is not one of the central questions in evaluating a company's business prospects?

What are the key products or service attributes demanded by consumers?

Which one of the following questions is NOT pertinent to company managers in thinking strategically about what directional path should be taken by the company and about developing a strategic vision?

What business approaches and operating practices should we consider in trying to implement and execute our business model?

In which of the following situations is employing a "think local, act local" multidomestic strategy highly questionable? A. When a company desires to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide. B. When there are significant country-to-country differences in customer preferences and buying habits industry is characterized by big economies of scale and strong experience curve effects. C. When the trade restrictions of host governments are diverse and complicated. D. When there are significant country-to-country differences in distribution channels and marketing methods. E. When host governments enact regulations requiring that products sold locally meet strictly defined manufacturing specifications or performance standards.

When a company desires to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide.

In which of the following circumstances is it advantageous for a multinational competitor to concentrate its activities in a limited number of locations in order to build competitive advantage? A. When the costs of performing certain value chain activities are significantly lower in certain geographic locations than in others. B. When a company has competitively superior patented technology that it can license to foreign partners. C. When there is a steep learning or experience curve associated with performing an activity in a single location. D. When certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. E. When there are significant scale economies in performing the activity.

When a company has competitively superior patented technology that it can license to foreign partners.

Which of the following conditions acts to weaken buyer bargaining power?

When buyers are unlikely to integrate backward into the business of sellers

When can companies gain competitive advantage over those rivals with plants in countries where costs are high? A. When companies have production facilities that carry input costs (especially labor) much higher than that found in low-cost countries. B. When companies meet government regulations that favor the local business climate and environmental regulations. C. When companies can build production facilities in low-cost countries (or source their products from contract manufacturers in these countries). D. When unique natural resources are easily extracted and carry very high export/tariffs or quotas. E. All of these.

When companies can build production facilities in low-cost countries (or source their products from contract manufacturers in these countries).

In which of the following instances is being a first-mover NOT particularly advantageous?

When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover.

In which of the following cases are late-mover advantages (or first-mover disadvantages) NOT likely to arise?

When opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand.

Which of the following is one of the four conditions that make an internal startup strategy appealing over an acquisition? A. When an internal startup is more costly. B. When adding production capacity has a significant impact on supply-demand balancing. C. When an internal startup has the inability to gain distribution access advantages. D. When the internal startup will have the necessary scale and resource strengths to compete with rivals. E. All of these.

When the internal startup will have the necessary scale and resource strengths to compete with rivals.

When is a think-local, act-local approach to strategy making appropriate? A. When the need for local responsiveness is minimal and when potential efficiency gains from standardization is unrestricted by cross-country opportunities. B. When the local manager is intellectually savvy. C. When the local market provides strong opportunity for growth and profitability. D. When the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited. E. When the need for centralized decision making is relevant due to various macroeconomic and market conditions.

When the need for local responsiveness is high due to significant cross-country differences in demographic, cultural, and market conditions and where benefits from standardization is limited.

C) the extra price the product commands exceeds the added costs of achieving the differentiation.

Whether a broad differentiation strategy ends up enhancing company profitability depends mainly on whether A) many buyers view the product's differentiating features as having value. B) most buyers have similar needs and use the product in the same ways. C) the extra price the product commands exceeds the added costs of achieving the differentiation. D) buyer switching costs are low and customer loyalty to any one brand is low. E) buyers are prone to shop the market for sellers having the best price.

According to both the text discussion and the summary in Figure 3.4, which of the following is not among the factors that determine whether competitive rivalry among industry members is strong, moderate, or weak?

Whether industry members are vertically integrated and whether the industry is characterized by significant scale economies and rapid technological change

Which one of the following is NOT a reliable measure of how well a company's current strategy is working?

Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product

Which of the following is not a factor in determining whether the suppliers to an industry are a source of strong, moderate, or weak competitive pressures?

Whether the industry supply chain is global or mostly national, whether suppliers have a wide or narrow product line, and whether industry members place orders frequently or infrequently with suppliers

In evaluating whether the industry and competitive environment presents sufficiently attractive prospects for both competitive success and attractive profits usually does NOT involve a consideration of which of the following factors?

Whether the industry's product is strongly or weakly differentiated

Whether a resource or capability can support a competitive advantage is determined by which two components of the four tests of competitive power analysis?

Whether the resource or capability is competitively valuable and/or is something that rivals lack

Which two tests of a resource's competitive power determine whether a company's competitive advantage can be sustained in the face of active competition?

Whether the resource or capability is hard to copy and/or can be trumped by different types of resources and capabilities

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?

Whether to employ a market share leadership strategy.

E) Redesigning products to eliminate features that might have market appeal, but excessively increase production costs

Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively? A) Striving to capture all available economies of scale and learning/experience curve effects B) Trying to operate facilities at full capacity C) Adopting labor-saving operating methods D) Improving supply chain efficiency E) Redesigning products to eliminate features that might have market appeal, but excessively increase production costs

E) A market share dominator strategy

Which of the following is not one of the five generic types of competitive strategy? A) A low-cost provider strategy B) A broad differentiation strategy C) A best-cost provider strategy D) A focused low-cost provider strategy E) A market share dominator strategy

C) Increasing production capacity and then striving hard to operate at full capacity

Which of the following is not one of the ways that a company can achieve a cost advantage by revamping its value chain? A) Cutting out distributors and dealers by selling direct to customers B) Replacing certain value chain activities with faster and cheaper online technology C) Increasing production capacity and then striving hard to operate at full capacity D) Relocating facilities so as to curb the need for shipping and handling activities E) Streamlining operations by eliminating low value-added or unnecessary work steps and activities

E) There is no such thing as a "best" competitive strategy; a company's "best" strategy is always one that

Which one of the following generic types of competitive strategy is typically the best strategy for a company to employ? A) A low-cost leadership strategy B) A broad differentiation strategy C) A best-cost provider strategy D) A focused low-cost provider strategy E) There is no such thing as a "best" competitive strategy; a company's "best" strategy is always one that is customized to fit both industry and competitive conditions and the company's own resources and competitive capabilities.

Which one of the following is not a reason industry members are often motivated to enter into collaborative partnerships with key suppliers? A. To reduce the costs of switching suppliers B. To speed the availability of next-generation components C. To enhance the quality of parts and components being supplied and reduce defect rates D. To squeeze out important cost savings for both themselves and their suppliers E. To reduce inventory and logistics costs

Which one of the following is not a reason industry members are often motivated to enter into collaborative partnerships with key suppliers? A. To reduce the costs of switching suppliers B. To speed the availability of next-generation components C. To enhance the quality of parts and components being supplied and reduce defect rates D. To squeeze out important cost savings for both themselves and their suppliers E. To reduce inventory and logistics costs

B) delivering superior value to buyers and building competencies and resource strengths in performing

While there are many routes to competitive advantage, they all involve A) building a brand name image that buyers trust. B) delivering superior value to buyers and building competencies and resource strengths in performing value chain activities that rivals cannot readily match. C) achieving lower costs than rivals and becoming the industry's sales and market share leader. D) finding effective and efficient ways to strengthen the company's competitive assets and to reduce its competitive liabilities. E) getting in the best strategic group and dominating it.

A company's mission statement typically addresses which of the following questions?

Who are we and what do we do?

Which of the following statements regarding multidomestic competition is false? A. One of the features of multidomestic competition is that buyers in different countries are attracted to different product attributes. B. With multidomestic competition, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets. C. One of the features of multidomestic competition is that industry conditions and competitive forces in each national market differ in important respects. D. One of the features of multidomestic competition is that the mix of competitors in each country market varies from country to country. E. With multidomestic competition, rivals battle for national championships, and winning in one country market does not necessarily signal the ability to fare well in other countries.

With multidomestic competition, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets.

Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called:

a SWOT analysis.

It is normal for a company's strategy to end up being

a blend of deliberate planned actions to improve the company's competitiveness and financial performance and as-needed unplanned reactions to unanticipated developments and fresh market conditions.

It is normal for a company's strategy to end up being

a blend of proactive actions to improve the company's competitiveness and financial performance and adaptive reactions to unanticipated developments and fresh market conditions

It is normal for a company's strategy to end up being:

a blend of proactive actions to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions.

The difference between a company competence and a core competence is that:

a company competence represents real proficiency in performing an internal activity, whereas a core competence is a competitively and strategically relevant activity.

When a company is good at performing a particular internal activity, it is said to have:

a company competence.

Profit sanctuaries are country markets or geographic regions where: A. a company can rank the competitive advantage opportunities in each industry. B. a company possesses good strategic fit with other businesses and identifies the value chain where this fit occurs. C. a company derives substantial profits because of its protected market position or unassailable competitive advantage. D. a company creates substantial investment strategies because it is losing competitive advantage over competitors. E. a company invests its dividends in expanding its foreign market presence.

a company derives substantial profits because of its protected market position or unassailable competitive advantage.

A company's strategic vision concerns

a company's directional path and future product-martket-customer-technology focus

Sluggish performance results relative to rivals are a reliable warning sign that the company has either a weak strategy or poor strategy execution or both. The best way to identify a well-conceived, well-executed strategy is to determine whether the company is experiencing:

a desirable growth rate in new customer acquisition and favorable customer retention efforts for establishing a strong customer experience.

Backward vertical integration can produce:

a differentiation-based competitive advantage when activities enhance the performance of the final product.

When a company has a proficiency in performing a strategically and competitively important value chain activity better than its rivals, it is said to have:

a distinctive competence

When a company performs a particular competitively important activity truly well in comparison to its rivals, it is said to have:

a distinctive competence.

Every strategy needs

a distinctive element that attracts customers and produces a competitive edge

Every strategy needs :

a distinctive element that attracts customers and produces a competitive edge

Every strategy needs:

a distinctive element that attracts customers and produces a competitive edge.

Transferring core competencies and resource strengths from one country market to another is A. a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage. B. best accomplished with a multidomestic strategy as opposed to a global strategy. C. feasible only with a global strategy; it can't be done with a multidomestic strategy. D. unlikely to result in a competitive advantage. E. nearly always the easiest and most sure-fire way to build competitive advantage in trying to compete successfully in foreign markets.

a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage.

The task of crafting a strategy is

a job for a company's whole management team—senior executives plus the managers of business units, operating divisions, functional departments, manufacturing plants, and sales districts (as per the strategy-making hierarchy shown in Figure 2.2).

The formation of a new corporation, jointly owned by two or more companies agreeing to share in the revenues, expenses, and control, is known as:

a joint venture.

For every emerging opportunity there exists:

a market penetration curve, and this typically has an inflection point where the business model falls into place.

The characteristics of a world market where global competition prevails include: A. a market situation where competitive conditions across national markets are linked strongly enough to form a true world market and where leading competitors typically compete head to head in many different countries. B. minor cost variations from country to country (as concerns production, distribution, sales and marketing, and other primary components of the industry value chain) and minimal cross-country trade restrictions. C. a competitive environment comprised of so many competitors that no company has a sizable worldwide market share. D. many companies racing for global market leadership, with most contenders using the same basic type of competitive strategy and positioned in the same strategic group. E. low barriers to entry, such a large number of rivals that the actions of any one rival have little impact on the sales and market shares of other rivals, and key success factors that vary from country to country.

a market situation where competitive conditions across national markets are linked strongly enough to form a true world market and where leading competitors typically compete head to head in many different countries.

The difference between a merger and an acquisition is that:

a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired).

The difference between the concept of a company mission statement and the concept of a strategic vision is that

a mission statement typically concerns a company's present business scope (who we are and what we do) whereas the principal concern of a strategic vision is the company's long term direction and future product-market-customer-technology focus

The difference between a company's mission statement and the concept of a strategic vision is that

a mission statement typically concerns a company's present business scope and purpose whereas a strategic vision sets forth "where we are going and why"

The primary difference between a company's mission statement and the company's strategic vision is that

a mission statement typically concerns a company's present business scope and purpose, whereas a strategic vision sets forth "where we are going and why."

The primary difference between a company's mission statement and the company's strategic vision is that:

a mission statement typically concerns a company's present business scope and purpose, whereas a strategic vision sets forth "where we are going and why."

The difference between the concept of a company mission statement and the concept of a strategic vision is that:

a mission statement typically concerns a company's purpose and its present business scope ("who we are and what we do and why we are here"), whereas the principal concern of a strategic vision portrays a company's aspirations for its future ("where are we going").

The difference between a company's mission statement and the concept of a strategic vision is that

a mission statement typically concerns an enterprise's present business scope and purpose—"who we are, what we do, and why we are here"—whereas the focus of a strategic vision is on the direction the company is headed and what its future product-customer-market-technology focus will be.

A linked and closely integrated set of competitive assets centered around one or more cross-functional capabilities and closely integrated competitive assets is termed:

a resource bundle.

The difference between a resource and a capability is:

a resource is a productive input or competitive asset, while a capability is the capacity of the firm to perform some internal activity competently.

To succeed in predicting the next strategic moves and countermoves of close or key rivals, it is useful to consider such indicators as:

a rival's current strategy, objectives, capabilities, and assumptions about itself and the industry.

A creative, distinctive strategy that delivers a sustainable competitive advantage is important because

a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance.

A company achieves sustainable competitive advantage when

a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors.

A multidomestic strategy represents: A. a think-local, act-local approach to international strategy. B. a sound approach when decision-making is centralized. C. a focused strategy on a global scale with decision making centralized. D. a decision-based approach whereby senior managerial positions are occupied by home-country staff. E. All of these.

a think-local, act-local approach to international strategy.

A company's strategic plan consists of

a vision of where it is headed, a set of performance targets, and a strategy to achieve them

5. Identify four factors that affect whether an industry does or does not present a company with a good business opportunity? Give examples

a. Are prevailing driving forces affecting the industry's profitability favorably or not i. i.e. is the Internet going to put Sears out of business b. How well does a company's strategy deliver on the industry's success factors i. Do we have the resources to compete (i.e do we access to capital to develop a gold mine) c. Whether the presence of complementors and the possibility of cooperative actions improve the company's prospects i. Can we compete with Walmart on price, given their buying power? d. How the company is being impacted by the state of the macro environment i. We are in a recession. Is digging an oil well at this present time a good idea?

4. Identify at least three benefits of constructing a strategic group map. Draw a map and explain the rationale for it.

a. Helps to determine how much of a thread competitors are. The closer the more of a threat b. Helps to identify which positions are attractive c. From an external source (the book only shows two benefits) i. Helps in identifying barriers for entry and exit ii. Helps in identifying strategic areas with the help of which benefits can be easily gained iii. Helps in identifying best firms in the industry iv. Helps in rectifying major rivals

2. Identify and briefly describe five common barriers to entering an industry. Give examples.

a. Large cost advantages for existing competitors, i.e. economies of scale b. Strong brand preference of consumers c. Patents & IP d. Network effects (people buying what their friends are buying, eg video games) e. Capital requirements high f. Difficult building networks with suppliers/vendors g. Regulative policies (i.e. cable, tv) h. Regulative trade policies (import tariffs, etc)

3. Explain the meaning and significance of each of the following and their relationship to one another? Give examples.

a. driving forces i. things that shape/change an industry. ii. Analysis has 3 steps: identify forces, understand if they as a whole make the industry more/less attractive, understand what strategy changes are needed to prepare for the impact of those forces iii. Examples: 1. Growth rate 2. Globalization 3. New technology 4. Shifts in buyer demographics 5. Entry/exit of major firms b. Strategic group mapping i. A map, which classifies a company by certain criteria to identify how competitors stand to each other in an industry. Criteria could be (example) product differentiation versus price/quality. Should not be correlated. ii. Example: differentiated, focused c. key success factors These are essential questions any company needs to pay attention to if they want to survive against competitors. They can change from industry to industry and even over time i. What product attributes are crucial for buyers ii. What resources are needed to be competitive iii. What shortcomings are almost certain to put a company at a significant disadvantage

Changing circumstances and ongoing managerial efforts to improve the strategy

account for why a company's strategy evolves over time

Changing circumstances and ongoing managerial efforts to improve the strategy

account for why a company's strategy evolves over time.

The pattern of actions and business approaches that would NOT define a company's strategy include:

actions to gain sales and market share with lower prices despite increased costs.

Functional strategies

add detail to the overall business strategy and specify what resources and organizational capabilities are needed to put the business strategy into action.

The two best reasons for investing company resources in vertical integration (either forward or backward) are to:

add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.

The managerial task of effectively conveying the essence of the strategic vision is made easier by

adopting a catchy slogan and then using it repeatedly to illuminate the direction and purpose of "where we are headed and why."

An export strategy is vulnerable except when an exporter is: A. exposed to higher manufacturing costs in the home country than in foreign countries where rivals have plants. B. subject to the relatively high costs associated with shipping the product to distant foreign countries. C. affected by adverse shifts occurring in currency exchange rates. D. dependent on the importing countries' enforcement of tariffs or other trade barriers. E. affected by both production and shipping costs remaining competitive with rivals.

affected by adverse shifts occurring in currency exchange rates.

A "think global, act global" approach to crafting a global strategy involves: A. pursuing the same basic competitive strategic theme (low cost, differentiation, best cost, and focused) in all countries where the firm does business. B. selling much the same products under the same brand names everywhere and expanding into most, if not all, nations where there is significant buyer demand. C. integrating and coordinating the company's strategic moves worldwide. D. utilizing the same competitive capabilities, distribution channels, and marketing approaches worldwide. E. All of these.

all of these

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous A. when high transportation costs make it expensive to operate from central locations. B. whenever buyer-related activities are best performed in locations close to buyers. C. if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations. D. when it is desirable to hedge against (1) the risks of fluctuating exchange rates, (2) supply interruptions or (3) adverse political developments. E. All of these.

all of these

In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations when: A. there are significant scale economies in performing an activity. B. the costs of manufacturing or other activities are significantly lower in some geographic locations than in others. C. when there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations). D. certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. E. All of these.

all of these

One of the most viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets includes: A. Trying to change the local market to better match the way the company does business elsewhere. B. Being prepared to modify aspects of the company's business model to accommodate local circumstances. C. Preparing to compete on the basis of low price. D. Staying away from those emerging markets where it is impractical to modify the company's business model to accommodate local circumstances. E. All of these.

all of these

The diamond framework is an aid in deciding/revealing: A. the appropriate level of competition one can expect. B. the basis of the new rival's strengths. C. the countries where rivals will be weakest. D. the advantages of conducting particular business activities in that country. E. All of these.

all of these

The managerial purpose of setting objectives includes

all of these

Thinking strategically about industry and competitive conditions in a given industry involves evaluation such considerations as

all of these

What does the World trade Organization (WTO) do primarily? A. Promotes fair trade practices. B. Actively polices dumping. C. Deals with the rules of trade between nations. D. Helps producers, exporters, and importers conduct business. E. All of these.

all of these

Which of the following is an option for tailoring a company's strategy to fit unusual circumstances presented in developing-country markets? A. Prepare to compete on the basis of low price. B. Modify aspects of a company's business model and/or strategy to accommodate local customs. C. Attempt to modify the local market to do business in the manner that the company uses elsewhere. D. Avoid markets where it is impractical or uneconomic to do business in such a way as to accommodate local circumstances. E. All of these.

all of these

A company's "macro-environment" refers to

all the relevant forces and factors outside a company's boundaries--general economic conditions, population demographics, societal values and lifestyles, technological factors, governmental legislation and regulation, and closer to home, the industry and competitive arena in which it operates

A company achieves sustainable competitive advantage when

an attractive number of buyers have a lasting preference for its products of services as compared to the offerings of competitors

Adapting to new conditions and constantly evaluating what is working and what needs to be improved are normal parts of the strategy-making process which result in:

an evolving strategy

A company should not couch its mission in terms of making a profit because a profit is more correctly:

an objective and a result of what a company does

A company should not couch its mission in terms of making a profit because a profit is more correctly:

an objective and a result of what a company does.

The payoff of good scouting reports on rivals is an improved ability to:

anticipate what moves rivals are likely to make next, thereby providing a valuable assist in outmaneuvering them in the marketplace.

Strategic alliances:

are collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective.

What separates companies that make a sincere effort to be good corporate citizens from companies that are content to do only what is legally required of them

are company leaders who believe that making a profit is not good enough and that performance should also include social and environmental metrics.

Economies of Scope

are cost reductions that flow from operating in multiple business (a larger scope of operation), whereas economies of scale accrue from a larger-size operation.

Profit Sanctuaries

are country markets that provide a company with substantial profits because of a strong or protected market position.

The best strategic alliances:

are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit, thereby enabling the firm to build on its strengths and to learn.

The "driving forces" in an industry:

are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions.

The most important aspect(s) of a company's business strategy

are the actions and moves in the marketplace that managers take to gain a sustainable competitive advantage.

Transaction Costs

are the costs of completing a business agreement or deal of some sort of, over and above the price of the deal. They can include the costs of searching for an attractive target, the costs of evaluating its worth, bargaining costs, and the costs of completing the transaction.

Good strategy combined with good strategy execution:

are the most telling signs of good management.

Good strategy combined with good strategy execution

are the most trustworthy signs of good management

The key success factors in an industry:

are those competitive factors that most affect industry members' abilities to prosper in the marketplace—the particular strategy elements, product attributes, operational approaches, resources, and competitive capabilities that spell the difference between being a strong competitor and a weak one, and between profit and loss.

The advantages of manufacturing goods in a particular country and exporting them to foreign markets: A. are largely unaffected by fluctuating exchange rates. B. are greatest when local distributors and dealers in that country can be convinced not to carry products that are made outside the country's borders. C. can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold. D. are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E. are seriously compromised by the potential for local government officials to raise tariffs on the imports of foreign-made goods into their country.

are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold.

The rivalry among competing sellers in an industry intensifies

as the number of rivals increases and as they become more equal in size and competitive capability.

Resource and capability analysis is designed to:

ascertain which of a company's resources and capabilities are competitively valuable.

The payoff of doing a thorough SWOT analysis is:

assisting strategy-makers in crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities, and the external threats to its future well-being.

A sound, well-communicated strategic vision matters, and the related payoffs occur in several respects, except in connection with

avoiding strategic inflection points and management's reaction in aligning decision choices.

A sound, well-communicated strategic vision matters, and the related payoffs occur in several respects, except in connection with:

avoiding strategic inflection points and management's reaction in aligning decision choices.

A vertical integration strategy can expand the firm's range of activities:

backward into sources of supply and/or forward toward end users.

For a particular company resource/capability to have real competitive power and perhaps qualify as a basis for competitive advantage, it should:

be hard to copy, be rare and something rivals lack, be competitively valuable, and not be easily trumped by substitute resource strengths possessed by rivals.

A company needs financial objectives

because adequate profitability and financial strength is critical to effective pursuit of its strategic vision as well as to its long-term health and ultimate survival

Industry conditions change:

because important forces are enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways.

A European-based company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets in many different parts of the world: A. is competitively disadvantaged when the euro declines in value against the Brazilian real. B. is competitively disadvantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C. becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported. D. is competitively advantaged when the euro appreciates in value against the Brazilian real. E. has no interest in whether the euro grows stronger or weaker versus the Brazilian real unless its chief competitors are other companies located in countries whose currency is also the euro.

becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported.

A "think local, act local" multidomestic type of strategy: A. is very risky, given fluctuating exchange rates and the propensity of foreign governments to impose tariffs on imported goods. B. is usually defeated by a "think global, act global" type of strategy. C. becomes more appealing the bigger the country-to-country differences in buyer tastes, cultural traditions, and market conditions. D. is generally an inferior strategy when one or more foreign competitors are pursuing a global low-cost strategy. E. can defeat a global strategy if the "think local, act local" multicountry strategist concentrates its efforts exclusively in those foreign markets which have superior resources.

becomes more appealing the bigger the country-to-country differences in buyer tastes, cultural traditions, and market conditions.

A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets: A. is competitively disadvantaged when the U.S. dollar declines in value against the currencies of the countries to which it is exporting. B. is largely unaffected by fluctuating exchange rates. It would, however, be affected if its plants were in foreign countries. C. becomes more competitive in foreign markets when the U.S. dollar gains in value against the currencies of the countries to which it is exporting. D. becomes more competitive in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting. E. has no interest in whether the dollar grows stronger or weaker versus foreign currencies unless it is competing only against companies located in foreign countries.

becomes more competitive in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting.

A European manufacturer that exports goods made at its European plants to the United States: A. is competitively disadvantaged when the euro declines in value against the U.S. dollar. B. is largely unaffected by fluctuating exchange rates between the euro and the U.S. dollar. It would, however, be affected if its plants were in the U.S. C. becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar. D. becomes more competitive in European markets when the euro declines in value against the U.S. dollar. E. has no interest in whether the euro grows stronger or weaker versus the U.S. dollar unless its chief competitors are other companies located in countries whose currency is also the euro.

becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar.

The Achilles heel (or biggest disadvantage/pitfall) of relying heavily on alliances and cooperative strategies is:

becoming dependent on other companies for essential expertise and capabilities.

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

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

Management's storyline for how and why the company's business approaches will generate revenues sufficient to cover costs and produce attractive profits and returns on investment

best describes what is meant by a company's business model

Management's blueprint for how and why the company's business approaches will generate revenues sufficient to cover costs and produce attractive profits and returns on investment:

best describes what is meant by a company's business model.

Crafting a strategy involves

blending deliberate/planned initiatives with emergent/unplanned reactive responses to changing circumstances, while abandoning planned strategy elements that have failed in the marketplace

A think-global, act-global strategic theme puts emphasis on: A. executing a global domination strategy that focuses the company's resource strengths on entry strategies across all country boundaries. B. ensuring that value chain activities are defined by country-specific attributes to capitalize on economies of scale. C. building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another. D. elevating resources and capabilities developed on a country-by-country basis so as to capitalize on a country's uniqueness. E. All of these.

building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another.

A Cash Hog

business generates cash flows that are too small to fully fund its operations and growth and requires cash infusions to provide additional working capital and finance new capital investment.

As per Figure 2.2, the strategy-making hierarchy in a single business company consists of

business strategy, functional area strategies, and operating strategies.

In a single-business company, the strategy-making hierarchy consists of

business strategy, functional strategies, and operating strategies

In a single-business company, the strategy-making hierarchy consists of:

business strategy, functional strategies, and operating strategies.

An offensive to yield good results can be short if:

buyers respond immediately (to a dramatic cost-based price cut or imaginative ad campaign).

Using domestic plants as a production base for exporting goods to selected foreign country markets: A. can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets. B. can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country and does not have to compete head-to-head against strong host country competitors. C. can be a powerful strategy since a company can maintain a one-country production base allowing it to capitalize on company competencies and capabilities. D. is usually a weak strategy when competitors are pursuing multi-country strategies. E. can be a powerful strategy because a company is not vulnerable to fluctuating exchange rates.

can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets.

Experience indicates that strategic alliances:

can suffer culture clash and integration problems due to different management styles and business practices.

The competitive advantage opportunities that a global competitor can gain by dispersing performance of its activities across many nations include all of the following Except: A. being able to shift production from one country to another to take advantage of exchange rate fluctuations, differing wage rates, differing energy costs, or differing trade restrictions. B. being in better position to choose where and how to challenge rivals. C. shortening delivery times to customers by having geographically scattered distribution facilities. D. locating buyer-related activities (such as sales, advertising, after-sale service and technical assistance) close to buyers. E. centralizing value chain activities to foster just-in-time inventory activities.

centralizing value chain activities to foster just-in-time inventory activities.

Management's strategic vision for an organization

charts a strategic course for the organization ("where are we going") and provides a rationale for why this directional path makes good sense

Management's strategic vision for an organization:

charts a strategic course for the organization ("where we are going") and provides a rationale for why this directional path makes good sense

A company's business model

clarifies (1) how the business will provide customers with value, and (2) why the business will generate revenues sufficient to cover costs and produce attractive profits.

One of the important benefits of a well-conceived and well-stated strategic vision is to

clearly communicate management's aspirations for the company to stakeholders and help steer the energies of company personnel in a common direction

One of the important benefits of a well-conceived and well-stated strategic vision is to:

clearly communicate management's aspirations for the company to stakeholders and help steer the energies of company personnel in a common direction.

A company needs financial objectives to:

communicate management's targets for financial performance and achieve strategic objectives

Increasing globalization of the industry can be a driving force because:

companies need to spread their operating reach into more and more country markets to meet consumer demand and take advantage of available operating activities.

Multidomestic competition refers to situations where: A. no domestic companies have very large market shares and each national market has many competitors. B. competition in one national market is independent of competition in other national markets, and as a consequence, there is—strictly speaking—no "international or world market." C. domestic rivals pursue focused or market niche strategies and do not compete internationally. D. domestic companies have a competitive disadvantage in competing with foreign rivals that operate in many different countries. E. most competitors operate in more than 2 country markets but rarely in more than 20.

competition in one national market is independent of competition in other national markets, and as a consequence, there is—strictly speaking—no "international or world market."

A company that has competitive assets that are central to its company strategy and superior to those of rival firms creates a:

competitive advantage over other companies.

A company's strategy consists of

competitive moves and approaches that managers have developed to grow the business, attract and please customers, conduct operations, and achieve targeted objectives.

Focused Differentiation Strategy

concentrating on a narrow buyer segment (or market niche) and outcompeting rivals with a product offering that meets the specific tastes and requirements of niche members better than the product offering of rivals.

Functional-area strategies

concern the actions, approaches, and practices to be employed in managing particular functions or business processes or key activities within a business

Functional-area strategies:

concern the actions, approaches, and practices to be employed in managing particular functions within a business.

An industry's key success factors

concern the particular strategy elements, product attributes, resources, competencies, competitive capabilities, and market achievements that spell the difference between being a strong competitor and a weak competitor—and sometimes between profit and loss.

To improve performance, there are many different avenues for outcompeting rivals such as:

confining their operations to local or regional markets or developing product superiority or even concentrating on a narrow product lineup

To improve performance, there are many different avenues for outcompeting rivals such as

confining their operations to local or regional markets or developing product superiority or even concentrating on a narrow product lineup.

To use location to build competitive advantage when competing in both domestic and foreign markets, a company must: A. scatter its production plants across many different country markets to minimize shipping costs to its distribution centers and/or to wholesalers/retail dealers. B. consider (1) whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations, and (2) in which countries to locate particular activities. C. concentrate buyer-related activities in a few well-chosen locations so as to maximize the capture of distribution-related scale economies. D. disperse both production and distribution activities across many nations in order to hedge against fluctuating exchange rates and lessen the risks of adverse political developments. E. avoid selling in countries where there are high trade barriers or where buyers purchase in small quantities.

consider (1) whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations, and (2) in which countries to locate particular activities.

In identifying an industry's key success factors, strategists should:

consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful, and what shortcomings are almost certain to put a company at a significant competitive disadvantage.

To use location to build competitive advantage, a company that operates transnationally or globally must: A. employ either an export strategy or a franchising strategy. B. scatter its production plants across many countries in different parts of the world so as to minimize transportation costs. C. consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities. D. locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs. E. concentrate all of its value chain activities in a single country—the one that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities.

Crafting a deliberate strategy involves developing strategy elements that:

consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods

Crafting a deliberate strategy involves developing strategy elements that

consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods.

What a company's top executives are saying about where the company is headed and about what the company's future product-customer-market-technology will be

constitutes their strategic vision for the company

What a company's top executives are saying about where the company is headed long term and about what the company's future product-market-customer-technology mix will be:

constitutes their strategic vision for the company

A company's objectives

convert the strategic vision into specific performance targets—well-stated objectives are quantifiable, or measurable, and contain a deadline for achievement.

Entering into strategic alliances and collaborative partnerships can be competitively valuable because:

cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology.

In a diversified company, the strategy-making hierarchy consists of

corporate strategy, business strategies, functional strategies, and operating strategies

In a diversified company, the strategy-making hierarchy consists of:

corporate strategy, business strategies, functional strategies, and operating strategies.

A "think global, act global" approach to strategy-making is preferable to a "think local, act local" approach when: A. a big majority of the company's rivals are pursuing localized multidomestic strategies. B. country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy. C. plants need to be scattered across many countries to avoid high shipping costs. D. market growth rates vary considerably from country to country. E. host governments enact regulations requiring that products sold locally meet strict manufacturing specifications or performance standards.

country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy.

A company's strategy and its quest for competitive advantage are tightly connected because:

crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance

A company's strategy and its quest for competitive advantage are tightly connected because

crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance

Synergy

creating added value for shareholders via diversification requires building a multi-business company where the whole is greater than the sum of its parts- an outcome known as synergy.

A company that has greater success in managing their strategic alliance can credit all of the following, EXCEPT:

creating organizational learning barriers across boundaries.

A company needs performance targets or objectives:

for its operations as a whole and also for each of its separate businesses, product lines, functional departments, and individual work units.

Management is obligated to monitor new external developments, evaluate the company's progress, and make corrective adjustments in order to:

decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods

Management is obligated to monitor new external developments, evaluate the company's progress, and make corrective adjustments in order to

decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods.

Management is obligated to monitor new external developments, evaluate the company's progress, and make corrective adjustments in order to:

decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods.

Business strategy, as distinct from corporate strategy, is chiefly concerned with

deciding how to build competitive advantage and improve performance in a particular line of business.

Business strategy, as distinct from corporate strategy, is chiefly concerned with:

deciding how to build competitive advantage and improve performance in a particular line of business.

The leadership challenges that top executives face in making corrective adjustments when things are not going well include:

deciding when adjustments are needed and what adjustments to make.

A company's strategic vision

delineates management's aspirations for the business, providing a panoramic view of "where we are going" and a convincing rationale for why this makes good business sense

External threats may pose various degrees of adversity upon the company and can surface from many sources and examples, EXCEPT for:

demographic shifts that can curtail product innovation.

The primary role of a functional strategy is to:

determine how to support particular activities in ways that support the overall business strategy and competitive approach

The primary role of a functional strategy is to

determine how to support particular activities in ways that support the overall business strategy and competitive approach.

As a rule, the collective impact of competitive pressures associated with the five competitive forces:

determines the extent of the competitive pressure on industry profitability.

When evaluating whether an industry's environment presents a company with an above-average profitability and an attractive business opportunity, it primarily involves:

determining the industry outlook for future profitability.

The objectives of a well-crafted strategy require management to strive to:

develop a lasting success that can support growth and secure the company's future over the long term.

The objectives of a well-crafted strategy require management to strive to:

develop lasting success that can support growth and secure the company's future over the long term

2) The objectives of a well-crafted strategy require management to strive to:

develop lasting success that can support growth and secure the company's future over the long term.

Good strategy execution requires management's:

diligent pursuit of operating excellence.

In expanding into foreign markets, a company can strive to gain competitive advantage (or offset domestic disadvantages) by: A. building a state-of-the-art facility to fully capture scale economies via an export strategy. B. using export, licensing, or franchising strategies so as to minimize risk and capital investment. C. locating buyer-related activities in all countries where it sells its product. D. dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets. E. avoiding the use of strategies that entail coordinating its domestic strategic moves with its strategic moves in the various foreign markets it enters.

dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets.

Well-conceived visions are ________ and ____________ to a particular organization and they avoid generic, feel-good statements that could apply to hundreds of organizations.

distinctive; specific

Well-conceives visions are ___________ and ____________ to a particular organization and they avoid generic, feel-good statements that could apply to hundreds of organizations.

distinctive; specific

A useful way to identify a company's resources is to view them as:

divided into two main categories, tangible and intangible.

Masterful strategies come from

doing things differently from competitors where it counts--out -innovating them, being more efficient, adapting faster--rather than running with the herd

Masterful strategies come from:

doing things differently from competitors where it counts—out-innovating them, being more efficient, adapting faster—rather than running with the herd.

Sharing and transferring resources and capabilities across borders may also contribute to the development of broader or deeper competencies and capabilities thereby helping a company achieve A. control over its resource capabilities. B. dominating depth in some competitively valuable area C. intensity of resource diversification. D. precision and compliance in resource agility and responsiveness E. All of these.

dominating depth in some competitively valuable area

In order to gain value from the SWOT analysis, it is important that the company address the two most important parts of a SWOT analysis, which are:

drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into strategic actions.

A strategic group map is a helpful analytical tool for

driving forces and competitive pressures favor some strategic groups and hurt others; and ascertaining whether the profit potential of different strategic groups varies due to the strengths and weaknesses in each group's respective market positions.

What is it called when a company sells its goods in foreign markets at prices that are below the prices at which it normally sells in its home market or well below its full costs per unit? A. Dumping practices. B. Price-clearing system. C. Clearance sale. D. Discounting practices. E. Competitive advantage.

dumping practices

Business strategy, as distinct from corporate strategy, is chiefly concerned with

forging actions and approaches to compete successfully in a particular line of business

SWOT analysis _________. a.) provides the basis for crafting a strategy that capitalizes on the company's strengths, overcomes its weaknesses, aims squarely at capturing the company's best opportunities, and defends against competitive and environmental threats b.) provides a quick overview of where on the scale from "alarmingly weak" to "exceptionally strong" the attractiveness of the company's overall business situation ranks. c.) helps provide a basis for matching the company's strategy to its internal resource capabilities and its external opportunities and threats. d.) helps identify a company's core competencies and competitive capabilities and the seriousness of its resource weaknesses and competitive deficiencies. e.) all of these

e.) all of these

The strategy-making, strategy-executing process

embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, and new opportunities.

A rival's strategic moves and countermoves are both:

enabled and constrained by the set of capabilities they have at hand and thus serve as a strong signal of future strategic actions.

A competitively valuable resource or capability is a company's:

enabling foundation of its business model.

Capturing the benefits of strategic alliances is not easy, but success generally is a function of six factors, except when:

ensuring the division of work is directly apportioned to appropriate skill sets.

The task of stitching together a strategy

entails addressing a series of how's: how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, and how to achieve strategic and financial objectives.

The task of stitching together a strategy

entails addressing a series of hows: how to grow the business, how to please customers, how to outcompete rivals, how to respond to changing market conditions, and how to achieve strategic and financial objectives

A balanced scorecard for measuring company performance

entails creating a set of objectives that is "balanced" in the sense of including both financial and strategic objectives

A balanced scorecard for measuring company performance

entails setting both financial and strategic objectives and putting balanced emphasis on their achievement.

Trying to determine what strategic moves rivals are likely to make next

entails understanding rivals' strategies, watching their actions on a regular basis, sizing up their strengths and weaknesses, gauging how well they are faring in the marketplace, assessing how much pressure they are under to improve their performance, and evaluating the relative merits of their strategic options and alternatives so as to better predict their likely next moves.

Corporate Strategy

establishes an overall game plan for managing a set of businesses in a diversified multibusiness community. The senior executives including the CEO create this strategy

Mergers and acquisitions:

frequently do not produce the hoped-for outcomes.

Strategic Fit

exists whenever one or more activities constituting the value chain of different businesses are sufficiently similar as to present opportunities for cross-business sharing or transferring of the resources and capabilities that enable these activates

Mergers and acquisitions are often driven by such strategic objectives as:

expanding a company's geographic coverage or extending its business into new product categories.

Strategic offensives should, as a general rule, be based on:

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

Vertical integration strategies:

extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain.

Managerial jobs with strategy-making responsibility

extend throughout the managerial ranks and exist in every part of a company--business units, operating divisions, functional departments, manufacturing plants, and sales districts

Managerial jobs with strategy-making responsibility:

extend throughout the managerial ranks and exist in every part of a company—business units, operating divisions, functional departments, manufacturing plants, and sales districts.

Vertical integration can lower costs by:

facilitating the coordination of production flows and avoiding bottlenecks.

A company's values relate to such things as

fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship

A company's values relate to such things as:

fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship.

A company's values relate to such things as:

fair treatment, integrity, ethical behavior, innovativeness,, teamwork, top-notch quality, superior customer service, social responsibility, and community citizenship.

The task of top executives when the company faces disruptive changes in its environment is to not only raise questions about the appropriateness of its direction and strategy but also to:

ferret out the causes and decide when adjustments are needed and what adjustments are needed for improved performance and operating excellence.

A "balanced scorecard" that includes both strategic and financial performance target is a conceptually strong approach for judging a company's overall performance because

financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities whereas strategic performance measures are leading indicators of a company's future financial performance

A "balanced scorecard" that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because:

financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities, whereas strategic performance measures are leading indicators of a company's future financial performance and business prospects.

The competitive threat that outsiders will enter a market is weaker when

financially strong incumbents send strong signals that they will launch strategic initiatives to combat the entry of newcomers.

Companies that seize opportunities in the marketplace are usually those that have been:

first movers willing to accept business risk.

A winning strategy is one that:

fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance.

A winning strategy is one that

fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance.

A winning strategy is one that:

fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance.

A winning strategy is one that

fits the company's internal and external situations, builds sustainable competitive advantage, and improves company performance

The strategic impetus for forward vertical integration is to:

gain better access to end users and better market visibility.

Information regarding the four components of the framework for Competitor Analysis can NOT:

gathered from rivals internal proprietary strategic information.

Evaluating the industry's driving forces, as a whole, requires understanding their influence on the attractiveness of industry environment and:

generally are defined in ways that will strengthen or weaken market demand, competition, and industry profitability in future years.

Companies racing for global market leadership: A. generally have to consider establishing competitive positions in the markets of emerging countries. B. are well-advised to avoid all the risks and problems of competing in emerging country markets. C. seldom have the resource capabilities it takes to be effective in competing in emerging country markets and usually are at a strong competitive disadvantage to the domestic market leaders. D. can usually be expected to earn sizable profits quickly in emerging country markets. E. usually encounter very low barriers in entering the markets of emerging countries.

generally have to consider establishing competitive positions in the markets of emerging countries.

A Cash Cow business

generates cash flows over and above its internal requirements, thus provides a corporate parent with funds for investing in cash hog businesses, financing new acquisitions, or paying dividends.

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to:

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.

A "think-local, act local" multidomestic strategy entails: A. a narrow product line aimed at serving buyers in the same segments of country markets worldwide. B. giving local managers considerable strategy-making latitude and often producing different product versions for different countries. C. aggressive efforts to locate facilities in those country markets that have superior resources. D. pursuing strong product differentiation and competing in many buyer segments. E. extensive efforts to transfer a company's competencies and resource strengths from one country to another so as to keep entry costs into new country markets low.

giving local managers considerable strategy-making latitude and often producing different product versions for different countries.

Crafting and executing strategy are top-priority managerial tasks because:

good strategy coupled with good strategy execution are the most telling signs of good management and greatly raises the chances that a company will be a standout performer in the marketplace

Crafting and executing strategy are top-priority managerial tasks because

good strategy coupled with good strategy execution greatly raises the chances that a company will be a standout performer in the marketplace

The most trustworthy signs of a well-managed company are

good strategy-making combined with good strategy execution

The most telling signs of a well managed company are:

good strategy-making combined with good strategy execution.

A creative, distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage

is a company's most reliable ticket to above-average profitability--indeed, the tight connection between competitive advantage and profitability means that the quest for sustainable competitive advantage always ranks center stage in crafting a strategy.

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

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

The advantages of using a franchising strategy to pursue opportunities in foreign markets include: A. having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees. B. being particularly well-suited to the global expansion efforts of companies with multidomestic strategies. C. allowing a company to achieve scale economies. D. being well suited to companies who employ cross-border transfer strategies. E. being well suited to the global expansion efforts of manufacturers.

having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchisor to expend only the resources to recruit, train, and support and monitor franchisees.

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships to:

help master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry.

Cross-border alliances between domestic and foreign firms are more effective in: A. building multiple profit sanctuaries than in forging a mutually supportive global strategy. B. reducing supply chain costs than in reducing distribution costs. C. helping establish a new beachhead of opportunity rather than in achieving and sustaining global market leadership. D. helping the partners pursue a multidomestic strategy as compared to a global strategy. E. helping the partners pursue a global strategy as compared to a multidomestic strategy.

helping establish a new beachhead of opportunity rather than in achieving and sustaining global market leadership.

The big risk of employing an outsourcing strategy is:

hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.

The range of product and service segments that the firm serves within its market is known as the firm's:

horizontal scope.

The competitive power of a company's core competence or distinctive competence depends on:

how hard it is to copy and how easily it can be trumped by substitute resource strengths and competitive capabilities of rivals.

One important concern a company has in trying to compete successfully in foreign markets is: A. convincing shippers to keep cross-country transportation costs low enough that the company can export its goods to foreign countries cheaply. B. whether it will have to integrate forward into wholesale and/or retail activities in order to gain visibility for its products in foreign countries. C. how it can gain location-based competitive advantage in locating its various value chain activities. D. how to convince local government officials to reduce tariffs on the imports of its goods into their country. E. developing the expertise to avoid the impact of fluctuating exchange rates.

how it can gain location-based competitive advantage in locating its various value chain activities.

A Uniqueness Driver

is a factor that can have a strong differentiating effect

A Cost Driver

is a factor that has a strong influence on a company's costs

A strategic alliance:

is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, the joint contribution of resources, shared risk, shared control, and mutual dependence.

The diamond framework can be used to reveal the answers to all of the following that are important for competing on an international basis EXCEPT: A. where foreign entrants into an industry are most likely to come from. B. how to formulate an exit strategy to push foreign competitors out of the market on the basis of competing strengths. C. which countries' foreign rivals are likely to be the weakest. D. how managers can decide which foreign markets to enter first. E. where to locate different value chain activities so they are the most beneficial.

how to formulate an exit strategy to push foreign competitors out of the market on the basis of competing strengths.

Business strategy concerns:

how to gain and sustain a competitive advantage for a single line of business.

The primary operating strategies are concerned with:

how to manage initiatives of strategic significance within each functional area, and adding detail and completeness) in ways that support functional strategies and the overall business strategy.

Tangible resources do not include:

human assets.

A company's mission statement should be sufficiently descriptive and should ...

identify the company's services and products, specify the buyer's needs that the company seeks to satisfy, identify the customer or market that the company intends to serve, and give the company its own identity.

In analyzing driving forces, the strategist's role is to

identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition, and (3) industry profitability.

The task of driving forces analysis is to:

identify the driving forces, assess whether their impact will make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces.

The task of driving forces analysis is to

identify what the driving forces are, assess whether the drivers of change are, on the whole, acting to make the industry more or less attractive, and determine what strategy changes are needed to prepare for the impacts of the driving forces.

The reasons why a company opts to expand outside its home market include all of the following EXCEPT: A. gaining access to new customers for the company's products/services. B. spreading its business risk across a wider market base. C. achieving lower costs through economies of scale, experience, and increased purchasing power. D. exploiting its core competencies and capabilities. E. identifying resources and capabilities in the company's home market.

identifying resources and capabilities in the company's home market.

Potential entrants are more likely to be deterred from actually entering an industry when

incumbent firms are willing and able to be aggressive in defending their market positions against entry.

According to both the text discussion and the summary in Figure 3.5, competitive pressures associated with the threat of new entrants grow stronger when

industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence, when current industry members are unable or unwilling to strongly contest the entry of newcomers, and when a newcomer can reasonably expect to earn attractive profits.

The principal offensive strategy options include all of the following EXCEPT:

initiating a market threat and counterattack simultaneously to effect a distraction.

Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of

inspiring company personnel to unite behind managerial efforts to get the company moving in the intended direction

Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of:

inspiring company personnel to unite behind managerial efforts to get the company moving in the intended direction

A blue-ocean strategy:

involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

The heart and soul of a company's strategy-making effort

involves coming up with moves and actions that produce a durable competitive edge over rivals

The heart and soul of a company's strategy-making effort:

involves coming up with moves and actions that produce a durable competitive edge over rivals.

Outsourcing

involves contracts out certain value chain activities to outside vendors.

The managerial task of developing a strategic vision for a company

involves deciding upon what strategic course a company should pursue in preparing for the future and why this directional path makes good business sense

The managerial task of developing a strategic vision for a company:

involves deciding upon what strategic course a company should pursue in preparing for the future and why this directional path makes good business sense.

Backward Integration

involves entry into activities previously performed by suppliers or other enterprises positioned along earlier stages of the industry value chain system.

Forward Integration

involves entry into value chain system activities closer to the end user.

An outsourcing strategy:

involves farming out certain value chain activities presently performed in-house to outside vendors.

There are a number of advantages to executing a global strategy, but there are also drawbacks that can make the strategy difficult to execute. A primary drawback of a global strategy is that it: A. allows firms to address local needs as precisely as locally based rivals can. B. permits firms to be more responsive to changes in local market conditions, either in the form of new opportunities or competitive threats. C. provides for lower transportation costs and also may involve higher tariffs. D. involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise. E. All of these.

involves higher coordination costs due to more complex tasks of managing a globally integrated enterprise.

A strategic group:

is a cluster of industry members with similar competitive approaches and market positions in the market.

A creative distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage:

is a company's most reliable ticket to above-average profitability and a competitive advantage, despite the best efforts of competitors to match or surpass this advantage.

Balanced Scorecard

is a performance measurement system that combines the use of both strategic and financial objectives, tracking their achievement, and giving management a more complete and balance view of how well an organization is performing. Here is an example of the flow of a balanced scorecard.

An International Strategy

is a strategy for competing in two or more countries simultaneously.

Greenfield Venture

is a subsidiary business that is established by setting up the entire operation from the ground up.

A Transnational Strategy

is a think-global, act-local approach that incorporates elements of both multi-domestic and global strategies.

The best indicator of how well a company's strategy is working is whether the company:

is achieving its stated financial and strategic objectives, its financial performance is better than the industry average, and it is gaining customers and increasing market share.

Sizing up a company's complement of resource strengths and weaknesses:

is akin to constructing a "strategic balance sheet" where strengths represent competitive assets and weaknesses represent competitive liabilities.

A core competence:

is an activity that a firm performs proficiently that is also central to its strategy and competitive success.

A set of "stretch" financial and strategic objectives

is an effective tool for avoiding ho-hum results

Adopting a set of "stretch" financial and "stretch" strategic objectives:

is an effective tool for pushing the company to perform at its full potential and deliver the best possible results.

A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets across the world: A. is competitively disadvantaged when the U.S. dollar declines in value against the Brazilian real. B. is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C. becomes less competitive in foreign markets when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. D. is competitively advantaged when the U.S. dollar appreciates in value against the Brazilian real. E. is unaffected by changes in the valuation of foreign currencies against the Brazilian real—all that matters to a U.S. company is the valuation of the U.S. dollar against the Brazilian real.

is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported.

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products, and considerable bargaining leverage on the part of both suppliers and customers:

is competitively unattractive from the standpoint of earning good profits.

Functional Area Strategy

is concerned with a particular activity in a business to support the business strategy. For example this could be specific to R&D, production, sales and marketing, distribution, or finance. The sectional or functional leaders from these various departments make these decisions.

A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products, and little bargaining leverage on the part of both suppliers and customers:

is conducive to industry members earning attractive profits.

The competitive strategy of a firm pursuing a "think global, act local" approach to strategy-making: A. entails little or no strategy coordination across countries. B. usually involves cross-subsidizing the prices in those markets where there are significant country-to-country differences in the product attributes that customers are most interested in. C. involves selling a mostly standardized product worldwide, but varying a company's use of distribution channels and marketing approaches to accommodate local market conditions. D. is essentially the same in all country markets where it competes but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions. E. involves having strongly differentiated product versions for different countries and selling them under distinctly different brand names (one for each country or group of neighboring countries) so that there will be no doubt in customers' minds that the product is more local than global.

is essentially the same in all country markets where it competes but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions.

A company that pursues and achieves strategic objectives

is frequently in a better position to improve its future financial performance because of the increased competitiveness that flows from the achievement of strategic objectives

A company that pursues and achieves strategic objectives:

is frequently in a better position to improve its future financial performance because of the increased competitiveness that flows from the achievement of strategic objectives.

Strategic intent

is when a company relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective. An example is MS&L used ambitious stretch objectives to triple its revenue in three years.

Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because:

it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals.

Strategic Vision

it describes, "Where we are going" defining management aspirations for the company and the course and direction charted to achieve them. An example for a hair salon could be "Our Salon will change the way you think about a hair cut. Full service comfort, friendly staff, a relaxing atmosphere, and the best prices in town that will leave you glowing inside and out."

Companies often implement a transnational strategy because: A. it combines flexible coordination with the pursuit of conflicting objectives simultaneously. B. it provides an easy mode of operating to transfer and share resources and capabilities across borders. C. it is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner. D. it is the least complex and easiest to implement of all the strategy choices. E. All of these.

it is conducive to mass customization techniques that enable companies to address local preferences in an efficient semi-standard manner.

Crafting and executing strategy are top-priority managerial tasks because:

it is management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance

A company's strategies stand a better chance of succeeding when:

it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.

A company's strategy stands a better chance of succeeding when:

it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.

A company's strategy stands a better chance of succeeding when

it is predicted on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals

The strength of a "think local, act local" multidomestic strategy is that: A. it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country. B. each of a company's country strategies is almost totally different from and also unrelated to its strategies in other countries. C. the plants located in different countries can be operated independent of one another, thus promoting greater achievement of scale economies. D. it avoids host country ownership requirements and import quotas. E. it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country.

If a company doesn't possess standalone resource strengths capable of contributing to competitive advantage:

it may have a bundle of resources that can be leveraged to develop a distinctive competence.

A company achieves a competitive advantage when:

it provides buyers with superior value compared to rival sellers or offers the same value at a lower cost.

Bypassing regular wholesale/retail channels in favor of direct sales and Internet retailing can have appeal if:

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

A company exhibits strategic intent when

it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective

A company exhibits strategic intent when:

it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective.

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense EXCEPT when:

it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently.

A company exhibits strategic intent when:

itrelentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective.

The elements of a company's business model are

its customer value proposition as well as the company's profit formula.

Organizational capabilities are virtually always:

knowledge-based, residing in people and in the company's intellectual capital, or in organizational processes and systems, which embody tacit knowledge.

A company's strategic plan:

lays out its future direction and business purpose, performance targets and strategy

The higher the switching costs for industry members, the more it can

limit supplier bargaining power.

Companies that compete internationally can pursue competitive advantage in world markets (or offset domestic disadvantages) by: A. using a differentiation-based competitive strategy in those country markets with superior resources. B. deliberately choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices), thus keeping costs and prices lower than rivals. C. using an export strategy to circumvent the risks of adverse exchange rate fluctuations. D. locating value chain activities in whatever nations prove most advantageous in a manner that uses location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination. E. employing a multidomestic strategy instead of a global strategy.

locating value chain activities in whatever nations prove most advantageous in a manner that uses location to lower costs or achieve greater product differentiation, allow for the transfer of competitively valuable competencies and capabilities from one country to another, and allow for cross-border coordination.

A strategic vision constitutes management's view and conclusions about the company's :

long-term direction and what product-market-customer mix seems optimal.

A strategic vision constitutes management's view and conclusions about the company's:

long-term direction and what product-market-customer mix seems optimal.

When trade-offs have to be made between achieving long-term and achieving short-term objectives:

long-term objectives should take precedence unless the short-term performance targets have unique importance.

A primary disadvantage of a licensing strategy is the need to: A. monitor the licensing agreement. B. safeguard the company's proprietary know-how. C. work with reputable firms. D. lose some degree of control over their competitive offering. E. All of these.

lose some degree of control over their competitive offering.

The big problem a franchisor faces is: A. allowing franchisees to achieve scale economies. B. maintaining quality control due to a lack of commitment to consistency and standardization C. eliminating the costs and risks associated with establishing a foreign business location. D. one where foreign facilities and marketing strategies are shared with local businesses. E. being able to achieve higher product quality and better product performance than with an export strategy.

maintaining quality control due to a lack of commitment to consistency and standardization

Company managers connect values to the chosen strategic vision and mission by:

making it clear that company personnel are expected to live up to the values in conducting the company's business and pursuing its strategic vision

Company managers connect values to the chosen strategic vision by

making it clear that company personnel are expected to live up to the values in conducting the company's business and pursuing its strategic vision

Leading and managing the strategy process calls upon managers to

making sure the company has a good strategic plan, staying on top of what is happening, putting constructive pressure on the organization to achieve good results, pushing corrective actions, leading the development of stronger capabilities, and displaying ethical integrity and spearheading social responsibility initiatives.

What separates a powerful strategy from a run-of-the-mill or ineffective one is:

management's ability to forge a series of moves, both in the marketplace and internally, that sets the company apart from rivals, and produces sustainable competitive advantage

What separates a powerful strategy from a run-of-the-mill or ineffective one is

management's ability to forge a series of moves, both in the marketplace and internally, that sets the company apart from rivals, tilts the playing field in the company's favor, and produces sustainable competitive advantage over rivals

A company's strategy concerns:

management's action plan for outperforming competitors and achieving superior profitability

A company's strategy concerns

management's action plan for running the business and conducting operations--its commitment to pursue a particular set of actions in growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations, and achieving targeted objectives.

A company's strategy concerns:

management's action plan four outperforming competitors and achieving superior profitability

A company's strategic vision describes:

management's aspirations for the future and delineates the company's strategic course and long-term direction.

A company's strategy is most accurately defined as:

management's commitment to provide direction and guidance, in terms of not only what the company should do but also what it should not do.

A company's strategy is most accurately defined as

management's commitment to provide direction and guidance, in terms of not only what the company should do but what it should not do.

A company's strategy is most accurately defined as

management's commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, conducting operations, and improving the company's financial and market performance.

A company's strategy is most accurately defined as

management's game plan for growing the business, attracting and pleasing customers, conducting operations, and achieving financial and market performance objectives.

A company's strategic plan consists of

management's vision mapping out where a company is headed, the company's financial and strategic objectives, and management's strategy to achieve the objectives and move the company along the chosen strategic path.

In crafting a company's strategy:

managers need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals.

In crafting a company's strategy

managers need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals

In crafting a company's strategy

managers need to come up with a sustainable competitive advantage that draws in customers and produces a competitive edge over rivals.

In crafting a company's strategy

managers need to come up with some distinctive "aha" element to the strategy that draws in customers and produces a competitive edge over time

In identifying an industry's dominant economic features, there is a need to consider such things as

market size and growth rate, the number of buyers, the scope of competitive rivalry, the number of rivals, demand-supply conditions, product innovation, the degree of product differentiation, the presence of scale economies and/or learning/experience curve effects, and the pace of technological change.

Being first to initiate a particular strategic move can have a high payoff in all of the following EXCEPT when:

market uncertainties make it difficult to ascertain what will eventually succeed.

The external market opportunities which are MOST relevant to a company are the ones that:

match up well with the firm's competitive assets, offer the best prospects for growth and profitability, and present the most potential for competitive advantage.

Merger and acquisition strategies:

may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.

In the strategy-making, strategy-executing process, effective corporate governance requires a company's board of directors to:

oversee the company's strategic direction, evaluate the caliber of senior executives' skills, handle executive compensation, and oversee financial reporting practices.

The advantages of using an export strategy to build a customer base in foreign markets include: A. being able to minimize shipping costs, avoiding tariffs, and curbing the effects of fluctuating exchange rates. B. minimizing its risk and direct investments requirements. C. being cheaper and more cost effective than licensing and franchising. D. being cheaper and more cost effective than a multicountry strategy. E. being more suited to accommodating local buyer tastes and host government regulations than a global strategy.

minimizing its risk and direct investments requirements.

A primary reason for why mergers and acquisitions sometimes fail is due to the:

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

Strategy-making is

more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives

Strategy-making is:

more of a collaborative group effort that involves all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives.

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company:

must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality.

Company objectives:

need to be broken down into performance targets for each of its organizational levels—for separate businesses, product lines, functional departments, and individual work units.

Company objectives

need to be broken down into performance targets for each of its separate businesses, product lines, functional departments, and individual work units

Company objectives

need to be broken down into performance targets for each of its separate businesses, product lines, functional departments, and individual work units.

Outsourcing strategies can offer such advantages as:

obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.

The market opportunities most relevant to a particular company are those that:

offer the best prospects for growth and profitability.

A Blue Ocean Strategy

offers growth in revenues and profits by discovering or inventing new industry segments that create altogether new demand.

A company's strategic plan

outlines the competitive moves and approaches to be used in achieving the desired business results

A company's strategic plan:

outlines the competitive moves and approaches to be used in achieving the desired business results.

The key duties of a company's board of directors in the strategy-making, strategy-executing process include:

overseeing the company's financial accounting and financial reporting practices and evaluating the caliber of senior executives' strategy-making/strategy-executing skills.

A strategic vision has enormous motivational value and can usually be stated adequately in one to two paragraphs, and managers should be able to personally:

paint a convincing and inspiring picture of the company's journey and destination effectively.

A strategic visions has enormous motivational value and can usually be stated adequately in one to two paragraphs, and managers should be able to personally:

paint a convincing and inspiring picture of the company's journey and destination effectively.

The faster a company's business environment is changing only makes it imperative for strategy makers to:

pay attention to early warnings of future change and be willing to experiment to establish a market position in the future.

A company's internal strengths should always serve as the basis of strategy because:

placing heavy reliance on the company's best competitive assets is the soundest route to attracting customers and competing successfully against rivals.

The difference between political risks and economic risks is that: A. political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies. B. political risks stem from stability in foreign business, while economic risks stem from an excess of property right protections. C. political rights stem from hostility to foreign business, while economic risks stem from the instability of the monetary system. D. political risks stem from risks due to exchange rate fluctuations, while economic risks stem from hostility to foreign business. E. political risks stem from the stability of a country's monetary system, while economic risks stem from instability in national business.

political risks stem from instability or weakness in national governments, while economic risks stem from the stability of a country's monetary system, and its economic and regulatory policies.

Related Businesses

possess competitively valuable cross-business value chain and resource matchups.

Developing a strategic vision for a company entails

prescribing a strategic direction for the company to pursue and a rationale for why this strategic path makes good business sense

Resource and capability analysis is achieved by:

probing the caliber of a firm's competitive assets relative to those of rival firms.

SWOT analysis:

provides a good overview and conclusions about the company's overall situation.

A company achieves a competitive advantage when it:

provides buyers with superior value compared to rival sellers or offers the same value at a lower cost.

The approach of a firm using a "think global, act local" version of a global strategy entails: A. producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country. B. little or no strategy coordination across countries. C. pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions. D. selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so buyers in each country market will think they are buying a locally made brand. E. selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country), but opting to only sell direct to buyers at the company's website so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market.

pursuing the same basic competitive strategy theme (low cost, differentiation, best cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions.

Well-stated objectives are:

quantifiable or measurable, and contain deadlines for achievement

Well-stated objectives are:

quantifiable or measurable, and contain deadlines for achievement.

Correctly diagnosing an industry's key success factors:

raises a company's chances of crafting a sound strategy.

Factors that cause the rivalry among competing sellers to be weaker include

rapid growth in buyer demand and high buyer switching costs.

Perhaps the most reliable way for a company to improve its financial performance over time is to

recognize that the achievement of strategic objectives fosters better long-term financial performance

Perhaps the most reliable way for a company to improve its financial performance over time is to:

recognize that the achievement of strategic objectives signals that the company is well positioned to sustain or improve its performance.

Companies that compete internationally are able to benefit from coordinating activities across different countries domains by: A. coordinating production schedules worldwide to take advantage of exchange rate fluctuations, component shortages, and changing wage rates or energy costs. B. redirecting shipments to higher sales demand areas. C. shifting workloads to plants with underutilized capacity. D. transferring resource-based advantages at low cost. E. All of these.

redirecting shipments to higher sales demand areas.

Relying on outsiders to perform certain value chain activities offers such strategic advantages as:

reducing the company's risk exposure to changing technology and/or changing buyer preferences.

Restructuring

refers to overhauling and streamlining the activities of a business-combining plant with excess capacity, selling off underutilized assets, reducing unnecessary expenses, and otherwise improving the productivity and profitability of a company.

The Scope of the Firm

refers to the range of activities which the firm performs internally, the breadth of its product and service offerings, the extent of its geographic market presence, and its mix of business.

Breaking down resistance to a new strategic vision typically requires that management, on an as needed basis:

reiterate the company's need for the new direction, while addressing employee concerns head-on, calming fears, lifting spirits, and providing them with updates and progress reports as events unfold.

Strategic objectives

relate to strengthening a company's overall business and competitive position

Strategic objectives:

relate to strengthening a company's overall marketing standing and competitive position.

A company's business model

relates to the principle business components that will allow the business to generate revenues ample to cover costs and produce a profit

Strategic intent refers to a situation where a company:

relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective

Strategic intent refers to a situation where a company

relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving the objective

The principal advantages of strategic alliances over vertical integration or horizontal mergers/acquisitions is defined best by:

resource pooling and risk sharing, more adaptive response capabilities, and the speed of deployment wherewithal.

A productive input or competitive asset that is owned or controlled by a company is termed a:

resource, and there are different types of resources at the firm's disposal that vary not only in kind but in quality as well.

There are two approaches that can make the process of uncovering and identifying a firm's capabilities more systematic. They include:

resources assessment and the functional approach.

With the aid of a strategic group map, one can:

reveal which companies are close competitors and which are distant rivals, and that not all positions on the map are equally attractive.

Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when

sales are made to buyer groups with either strong bargaining power or high sensitivity.

The customer value proposition lays out the company's approach to:

satisfying buyer wants and needs at a price customers will consider a good value

In evaluating proposed or existing strategies managers should

scrutinize the company's existing strategies compatibility with desired outcomes on a regular basis.

The real purpose of the company's strategic vision:

serves as management's tool for giving the organization a sense of direction.

Stretch Objectives

set performance standards high enough for an organization to perform at its full potential and deliver the best results. An example could be Google developing drones for the delivery of online orders through Amazon.

A company's business model:

sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner

A company's business model

sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner

A company's strategy is increasingly effective the more it can match the company strategy to competitive conditions, so the firm can:

shift the competitive battle in favor of the firm by altering the underlying factors driving the five forces.

Top management efforts to communicate the strategic vision to company personnel

should be done in language that inspires and motivates company personnel to unite behind executive efforts to get the company moving in the intended direction

An engaging and convincing strategic vision

should be done in language that inspires and motivates company personnel to unite behind executive efforts to get the company moving in the intended direction.

A Cross-market Subsidization

supporting competitive offensive in one market with resources and profits diverted from operations in another market- can be a powerful competitive weapon.

A company's resource and capability analysis:

signal whether it has the wherewithal to be a strong competitor in the marketplace.

A creative, distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage

signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives.

SWOT analysis is a simple but powerful tool for:

sizing up a company's resources and capabilities, strengths and deficiencies, its market opportunities, and the external threats to its future well-being.

Not all buyers of an industry's product have equal degrees of bargaining power with sellers, because:

some sellers may be less sensitive than others to price, quality, or service differences.

Low-cost Provider Strategy

sriving to achieve lower overall costs than rivals on comparable products that attract a broad spectrum of buyers.

A company's strategy consists of the action plan management is taking to: A. stake out a unique market position and achieve superior profitability. B. compete against rivals and establish a transitory competitive advantage. C. concentrate on improving the existing product offering irrespective of the changing and turbulent markets. D. develop a more appealing business model than rivals. E. identify its strategic vision, its strategic objectives, and its strategic intent.

stake out a unique market position and achieve superior profitability.

Political Risks

stem from instability or weakness in national governments and hostility to foreign business.

Economic Risks

stem from the stability of a country's monetary system, economic and regulatory policies, and the lack of property rights protections.

Crafting a strategy involves

stitching together a proactive/intended strategy and then adapting first one piece and then another as circumstances surrounding the company's situation change or better options emerge

A company requires a dynamically evolving portfolio of resources and capabilities to:

sustain its competitiveness and help drive improvements in its performance.

When firms are involved in a mix of in-house and outsourced activity in any given stage of the vertical chain, it is called:

tapered integration.

Tangible resources include:

technological assets such as patents, copyrights, and trade secrets.

The main reason that listing or categorizing company resources matters is:

that all the different types of resources are included.

One important indicator of how well a company's present strategy is working is whether:

the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.

The concept of strategic groups is relevant to industry and competitive analysis because:

strategic group maps help identify how each competing firm is positioned and the relationship to their closest competitors.

Establishing and achieving strategic objectives merits very high priority on management's agenda because

strategic outcomes are leading indicators of a company's future financial performance and business prospects.

The competitive moves and business approaches a company's management is using to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve organizational objectives is referred to as its:

strategy

The competitive moves and business approaches a company's management is using to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve organizational objectives is referred to as its

strategy

The difference between a company's strategy and a company's business model is that

strategy relates broadly to a company's competitive moves and business approaches (which may or may not lead to profitability) while its business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint of being able to earn satisfactory profits and returns on investment

The difference between a company's strategy and a company's business model is that:

strategy relates broadly to a company's competitive moves and business approaches while its business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint of being able to generate revenues sufficient to cover costs and realize a profit

Which of the following is not a factor to consider in identifying an industry's dominant economic features?

strength of driving forces and competitive forces

Managers can deliberately set challenging performance targets at levels high enough to promote outstanding company performance by establishing:

stretch objectives which challenge the organization to deliver stretch gains in performance.

A "balanced scorecard" for measuring company performance:

strikes a "balance" between financial and strategic objectives

A "balanced scorecard" for measuring company performance:

strikes a "balance" between financial and strategic objectives.

Factors that cause the rivalry among competing sellers to be weak include

strong buyer loyalty, rapid growth in buyer demand, and so many industry rivals that any one company's actions have little impact on the businesses of its rivals.

Based on both the chapter discussion and the summary in Figure 3.6, competitive pressures stemming from substitute products are weaker when

substitutes are higher-priced, buyers don't believe substitute products have equal or better features, and buyers' costs of switching to substitutes are relatively high.

An industry's key success factors can always be deduced by asking what factors:

such as product attributes and service characteristics are crucial, and what resources and competitive capabilities are needed, and what shortcomings are evident to put a company at a competitive disadvantage.

A viable business model includes a valuable customer value proposition that

suggests the greater the value provided and the lower the price, the more attractive the value proposition

The primary role of a functional strategy is to

support the overall business strategy and competitive approach

The essential difference between a "think global, act global" and a "think global, act local" approach to strategy-making is that: A. a "think global, act global" approach entails extensive strategy coordination across countries and a "think global, act local" approach entails little or no strategy coordination across countries. B. the former aims at implementing the same business model worldwide, whereas the latter aims at implementing customized business models to better match local market circumstances. C. the "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions. D. a "think global, act global" approach involves selling a mostly standardized product worldwide, whereas a "think global, act local" approach entails selling products that are highly differentiated from country to country. E. a "think global, act global" approach involves selling under a single brand name worldwide, whereas a "think global, act local" approach entails utilizing multiple brands (typically one for each different country or group of neighboring countries).

the "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions.

The four tests of a resource's competitive power are often referred to as:

the VRIN test, which asks if a resource is valuable, rare, inimitable, and non-substitutable.

Business strategy concerns

the actions and approaches crafted by management to produce successful performance in one specific line of business

A company's values concern

the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission

A company's values or core values concern:

the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission

A company's values or core values concern:

the beliefs, traits, and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and mission.

Excellent execution of an excellent strategy is:

the best test of managerial excellence and the best recipe for making a company a standout performer.

Excellent execution of an excellent strategy is

the best use of managerial excellence and the best recipe for making a company a standout performer

In mapping strategic groups:

the best variables to use as axes for the map are those that identify the competitive characteristics that delineate strategic approaches used in the industry.

The best quantitative evidence of whether a company's present strategy is working well is:

the caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer.

Driving forces analysis helps managers identify whether:

the collective impact of the driving forces will act to increase/decrease market demand, increase/decrease competition, and raise/lower industry profitability in the years ahead.

A company's strategy consists of

the competitive moves and business approaches the managers are employing to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve targeted objectives.

The most powerful of the five competitive forces is USUALLY

the competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry.

What makes the marketplace a competitive battlefield is

the constant rivalry of firms to strengthen their standing with buyers and win a competitive edge over rivals.

Competitive pressures stemming from buyer bargaining power tend to be weaker when:

the costs incurred by buyers in switching to competing brands or to substitute products are relatively high.

The difference between a merger and an acquisition relates to:

the details of ownership, management control, and the financial arrangements.

Strategic group mapping is a visual technique for displaying:

the different market or competitive positions that rival firms occupy in an industry and for identifying each rival's closest competitors.

In analyzing the strength of competition among rival firms, an important consideration is

the diversity of competitors in terms of long-term direction objectives, strategies, and countries of origin.

A strategy of vertical integration can have substantial drawbacks, including:

the environmental costs of coordinating operations across vertical chain activities.

One of the big risks of competing in foreign markets is: A. the extent to which the advantages of exporting goods from a particular country can be wiped out when fluctuating exchange rates result in that country's currency growing much weaker relative to the currencies of the countries to which the goods are being exported. B. whether the economies of foreign countries will continue to grow at double-digit rates. C. the fact that some countries have lower wage rates than others. D. the potential for local government officials to reduce tariffs on the imports of its goods into their country. E. the extent to which the advantages of manufacturing goods in a particular country can be wiped out when fluctuating exchange rates result in that country's currency growing stronger relative to the currencies of the countries where the output is being sold.

the extent to which the advantages of manufacturing goods in a particular country can be wiped out when fluctuating exchange rates result in that country's currency growing stronger relative to the currencies of the countries where the output is being sold.

A company's resources and capabilities represent:

the firm's competitive assets, which are considered big determinants of its competitiveness and ability to succeed in the marketplace.

Competitive pressures stemming from the threat of entry are weaker when

the industry outlook is risky or uncertain

Buyer bargaining power is stronger when

the industry's products are standardized or undifferentiated.

As a rule, the stronger the collective impact of the five competitive forces,

the lower the combined profitability of industry participants and the more "competitively unattractive" is the industry environment.

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when:

the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first-mover.

Strategy is about competing differently than rivals, thus strategy success is about:

the sources of sustained advantages and superior profitability

Thinking strategically about the industry and competitive environment involves in-depth analysis and evaluation of such consideration as

the market positions of industry rivals and their relative strength, and the competitive forces rivals are facing and what impact they will have on competitive intensity and industry profitability.

First-mover disadvantages (or late-mover advantages) rarely ever arise when:

the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.

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

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

A company's strategy is a "work in progress" and evolves over time because of

the ongoing need of company managers to react and respond to changing industry and competitive conditions.

A company's strategy is a "work in progress" and evolves over time because of:

the ongoing need of company managers to react and respond to changing market and competitive conditions

A company's strategy is a "work in progress" and evolves over time because of

the ongoing need of company managers to react and respond to changing market and competitive conditions

Cross-country variations in government policies and economic conditions affect: A. the formation of investment priorities and the steering of corporate resources. B. the opportunities available to foreign entrants and the risks of operating within that country. C. the ability of foreign markets to remain competitive. D. the ability of weak-performing businesses to stage a narrow base for business operations. E. cross-business opportunities such as transferring skills or technology to the new market.

the opportunities available to foreign entrants and the risks of operating within that country.

A company's strategy evolves over time as consequence of

the proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy

. A company's realized strategy evolves from one version to the next due to:

the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms.

A company's strategy evolves from one version to the next because of

the proactive efforts of company managers to improve this of that aspect of the strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms

Operating strategies concern

the relatively narrow strategic initiatives and approaches for managing key operating units (plants, distribution centers, geographic units) and specific operating activities (the management of specific brands, supply chain—related activities, and website sales and operations).

Operating strategies concern

the relatively narrow strategic initiatives for managing key operating units within a business (plants, distribution centers, geographic units) and for performing strategically significant operating tasks (maintenance, shipping, inventory control, purchasing, advertising) in ways that support functional strategies and the overall business strategy

Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous except when A. buyer-related activities (such as sales, advertising, after-sale service and technical assistance) need to take place close to buyers. B. buyers demand short delivery times and/or high transportation costs make it uneconomical to operate from one or just a few locations. C. it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and adverse political developments. D. there are diseconomies of scale in trying to operate from a single location. E. there are reasons to decouple buyer-related activities in favor of locational advantages.

there are reasons to decouple buyer-related activities in favor of locational advantages.

Crafting and executing strategy are top-priority managerial tasks because

there is a compelling need for managers to proactively shape how the company's business will be conducted and because a strategy-focused enterprise is more likely to be a stronger bottom-line performer than a company whose management views strategy as secondary and puts its priorities elsewhere

When an industry member is a major customer of the supplier, and the relationship (partnership) is unusually effective and mutually advantageous

there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers.

Multidomestic competition is best characterized as a situation where: A. the competitive arena among rival companies involves several neighboring countries rather than either a single country or the world market as a whole. B. competition is mainly among the domestic companies of a few neighboring countries (five countries at most). C. there are extensive trade restrictions, sharply fluctuating exchange rates, and high tariff barriers in many country markets that work against the formation of a true world market. D. competition among domestic companies predominates and foreign competitors are a minor factor. E. there is no international or global market, just a collection of mostly self-contained country markets.

there is no international or global market, just a collection of mostly self-contained country markets.

A company's strengths are important because:

they represent the quality of its competitive assets that enhance its competitiveness in the marketplace.

Companies that compete on an international basis have a competitive advantage over their purely domestic rivals A. to achieve a larger domestic interest by developing sufficient resource strengths and competitive capabilities for success. B. to benefit from coordinating activities across different countries' domains. C. solely for the benefit of their shareholders. D. that guarantees the generation of big profits, big returns on investment, and big cash surpluses after dividends are paid. E. None of these.

to benefit from coordinating activities across different countries' domains.

Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is:

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

One of the frequently used successful and dependable strategic approaches is:

to come up with a distinctive element that builds strong customer loyalty and yields a winning competitive edge.

One of the keys to successful strategy-making is

to come up with one or more strategy elements that act as a magnet to draw customers and yield a lasting competitive edge

The extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system is known as:

vertical scope.

The big issue an acquisition-minded firm must consider is whether strategically: A. to acquire the firm at a price that is prohibitive—in other words, a price that cannot recapture the investment. B. to require the acquired firm's resources and management capability to sustain the on-going struggling operation. C. to pay a premium price for a successful local company or to buy a struggling firm at a discount price. D. to pay a price that builds in all the synergistic advantages to the acquired firm. E. to pay a very high premium price that sends a signal to the market that the new firm has arrived.

to pay a premium price for a successful local company or to buy a struggling firm at a discount price.

A key approach for a company to grow sales and profits in several country markets is to A. transfer its valuable competencies and resource strengths among these markets to aid in the development of broader competencies and capabilities. B. employ a multidomestic strategy rather than a global strategy. C. locate technical after-sale services close to buyers. D. minimize transportation costs among these markets. E. take advantage of less restrictive restrictions and requirements of host governments.

transfer its valuable competencies and resource strengths among these markets to aid in the development of broader competencies and capabilities.

Perhaps the most important benefits of a vivid, engaging, and convincing strategic vision is

uniting company personnel behind managerial efforts to get the company moving in the intended direction

Perhaps the most important benefit of a vivid, engaging, and convincing strategic vision is:

uniting company personnel behind managerial efforts to get the company moving in the intended direction.

The best strategy options for a local company in competing against global challengers include: A. locating buyer-related activities, such as sales, advertising, or technical assistance, close to buyers. B. export strategies, entering into alliances and/or joint ventures with one or more foreign companies having globally competitive strengths, and/or cross-border transfer strategies. C. export strategies, licensing strategies, franchising strategies, and cross-market coordination strategies. D. using an understanding of local customer preferences to create customized products or services, transferring the company's expertise to cross-border markets, and/or using acquisitions and rapid growth strategies to defend against expansion-minded multinationals. E. offensives aimed at the global challengers' strengths, promoting anti-dumping legislation, and/or launching some type of guerilla warfare strategy.

using an understanding of local customer preferences to create customized products or services, transferring the company's expertise to cross-border markets, and/or using acquisitions and rapid growth strategies to defend against expansion-minded multinationals.

A company with strategic intent

usually has an exceptionally hold and grandiose long-term objective--like becoming the dominant global market leader-and an unshakable commitment to concentrating its full resources and strategy on achieving that objective

The basic strategy options for local companies in competing against global challengers include: A. best-cost provider and focused low-cost provider and low-cost leadership strategies. B. export strategies, licensing strategies, and cross-border transfer strategies. C. utilizing understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals. D. franchising strategies, multidomestic strategies keyed to product superiority, global low-cost leadership strategies, and cross-border coordination strategies. E. focused differentiation and broad differentiation strategies.

utilizing understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals.

Strategic Group mapping analysis does not entail drawing conclusions about:

where on the map is the easiest position to shift from to a more favorably situated position.

A Greenfield venture in a foreign market is one: A. where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up. B. where foreign facilities and marketing strategies are shared with local businesses. C. where the company learns through training by the foreign entity on how to compete. D. that supports exports into a foreign market by marketing indirectly thru local rivals. E. that offers lower risk and a faster path to financial returns.

where the company creates a wholly owned subsidiary business by setting up all aspects of the operation upon entering the market from the ground up.

Just how strong the competitive pressures are from substitute products depends on

whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes.

Whether the buyers of an industry's product have strong or weak bargaining leverage over the terms and conditions of sale depends on

whether buyers purchase in relatively large or small quantities, whether the costs of switching to competing brands or to substitute products are high or low, and how well informed buyers are about sellers' prices, products, and costs.

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of

whether demand for supplier products is high and they are in short supply.

One of the biggest strategic challenges to competing in the international arena includes: A. ways to avoid the risks of shifting exchange rates. B. ways to charge the same price in all country markets. C. defining how many foreign firms to license to produce and distribute the company's products. D. whether to offer a standardized product worldwide or a customized product offering in each different country market. E. whether to pursue a global strategy or an intercontinental strategy.

whether to offer a standardized product worldwide or a customized product offering in each different country market.

When a company operates in the markets of two or more different countries, its foremost strategic issue is: A. whether to use strategic alliances to help defeat its rivals. B. whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries. C. whether to maintain a national (one-country) manufacturing base and export goods to the other countries. D. choosing which foreign companies to team up with via strategic alliances or joint ventures. E. whether to test the waters with an export strategy before committing to some other competitive approach.

whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.

A company's business model:

zeros in on the customer value proposition and its related profit formula