strategy quiz

1. Strategy, at its essence, is about A. matching rival businesses' products and quality dimensions in the marketplace. B. building profits for short-term success. C. realigning the market to provoke change in rival companies. D. developing lasting success that can support growth and secure the company's future over the long term. E. re-creating a business model with regularity.

D

2. The pattern of actions and business approaches that would no[ 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

. Managers of every company should be willing and ready to modify their strategies because A. market conditions and circumstances are changing over time or the current strategy is clearly failing. B. the task of crafting strategy is a one-time event. C. the strategic vision necessitates periodic updating. D. frequent changes in strategy make it very difficult for rivals to imitate. E. all strategies are reactive.

a

.Determining 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. judging whether industry members are capable of self-manufacturing their products.

a

36.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, productattributes, 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

Functional-area strategies A. concern the actions, approaches, and practices to be employed in managing particular functions within a business.B. specify what actions a company should take to resolve specific strategic issues and problems. C. are normally crafted by operating-level managers. D. are concerned with how to unify the firm's several different operating strategies into a cohesive whole. E. are normally crafted by the company's CEO and other senior executives.

a

Integral parts of the managerial process of crafting and executing strategy include A. developing a strategic vision, strategic management, and crafting a strategy. B. developing a proven business model, deciding on the company's strategic intent, and crafting a strategy. C. strategic management, crafting a strategy, implementing and executing the chosen strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage. D. coming up with a statement of the company's mission and purpose, strategic management, choosing what business approaches to employ, selecting a business model, and monitoring developments. E. deciding on the company's strategic intent, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ.

a

Rivalry among competing sellers decreases A. when buyer demand is growing rapidly. B. as it becomes less costly for buyers to switch brands. C. as the products of rival sellers become commoditiaed. D. when there is excess production relative to demand. E. as the number of competitors increases.

a

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. PESTEL analysis C. five forces framework D. the Value Net framework E. competitor analysis

a

Managers must chart a company's strategic course by A. focusing on the local environment in which they are operating. B. ensuring excess production capacity and/or inventory. C. competing fiercely for a share in the market. D. building a bigger dealer network. E. developing a thorough understanding of the company's external and internal environment.

e

.A company needs financial objectives A. to overtake key competitors on such important measures as net profit margins and return on investment. B. because without adequate profitability and financial strength, the company's ultimate survival is jeopardiaed. C. to convince shareholders that top management is acting in their interests. D. to translate the company's business model into action items. E. to indicate to employees that financial objectives always take precedence over strategic objectives.

b

.The value net framework includes an analysis of A. the firm, substitutes, suppliers, customers, and competitors. B. the firm, suppliers, customers, competitors, and driving forces.C. substitutes, suppliers, customers, competitors, and driving forces. D. the firm, suppliers, customers, competitors, and complementors. E. substitutes, suppliers, customers, competitors, and potential entrants.

b

A company achieves sustainable competitive advantage when A. it has a profitable business model. B. a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors. C. it is able to maximiae shareholder wealth. D. it is consistently able to achieve both its strategic and financial objectives. E. its strategy and its business model are well matched and in sync.

b

In evaluating proposed or existing strategies managers should A. initiate new initiatives even though they don't seem to match the company's internal and external situation. B. scrutiniae the company's existing strategies on a regular basis to ensure they offer a good strategic fit, create a competitive advantage, and result in above-average performance. C. evaluate the firm's business model at least every three years. D. ensure core capabilities are incorporated for establishing a competitive advantage. E. align existing strategies with new strategies to emphasiae incremental gains.

b

One of the important benefits of a well-conceived and well-stated strategic vision is to A. clearly delineate how the company's business model will be implemented and executed. B. clearly communicate management's aspirations for the company to stakeholders and help steer the energies of company personnel in a common direction. C. set forth the firm budgetary objectives in clear and fairly precise terms. D. help create a balanced scorecard approach to objective setting and not stretch the company's resources too thin across different products, technologies, and geographic markets. E. indicate what kind of sustainable competitive advantage the company will try to create in the course of becoming the industry leader.

b

The key duties of a company's board of directors in the strategy-making, strategy-executing process include A. coming up with compelling strategy proposals of their own to debate against those put forward by top management. B. overseeing the company's financial accounting and financial reporting practices and evaluating the caliber of senior executives' strategy-making/strategy-executing skills. C. taking the lead in developing the company's business model and strategic vision. D. taking the lead in formulating the company's strategic plan but then delegating the task of implementing and executing the strategic plan to the company's CEO and other senior executives. E. approving the company's operating strategies, functional-area strategies, business strategy, and overall corporate strategy.

b

The 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 the bargaining power from both suppliers and influential customers. E. lesser the bargaining power from both suppliers and influential customers.

b

The primary difference between a company's mission statement and the company's strategic vision is that a A. mission statement explains why it is essential to make a profit, whereas the strategic vision explains how the company will be a moneymaker. B. mission statement typically concerns a company's present business scope and purpose, whereas a strategic vision sets forth "where we are going and why." C. mission statement deals with how to please customers, whereas a strategic vision deals with how to please shareholders. D. mission statement deals with "where we are headed," whereas a strategic vision provides the critical answer to "how will we get there?" E. mission statement addresses "how we are trying to make a profit today," while a strategic vision concerns "how will we make money in the markets of tomorrow?"

b

.The strategically relevant factors outside a company's industry boundaries·economic conditions, political factors, sociocultural forces, technological factors, environmental factors, and legal/regulatory conditions·are known as 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. a company's macro-environment. D. the competitive market environment that exists between a company and its competitors. E. the dominant economic features of a company's industry.

c

.Which of the following does no[ 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 standardiaed 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

A company's strategic plan A. maps out the company's history. B. links the company's financial targets to control mechanisms. C. outlines the competitive moves and approaches to be used in achieving the desired business results. D. focuses on offering a more appealing product than rivals.E. lists methods of making money in its chosen business.

c

A winning strategy is one that A. builds strategic fit, is socially responsible, and maximiaes 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

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

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

A company that pursues and achieves strategic objectives A. is likely to weaken the achievement of its short-term and long-term financial objectives. B. believes that the company's financial performance is not as important as it really is. C. is generally not strongly focused on its true mission of making a profit. D. is frequently in a better position to improve its future financial performance because of the increased competitiveness that flows from the achievement of strategic objectives. E. is likely to be a weak financial performer because diverting resources to the pursuit of strategic objectives takes away from the achievement of financial performance targets.

d

A company's strategy is a "work in progress" and evolves over time because of the A. importance of developing a fresh strategic plan every year that keeps employees from becoming bored with executing the same strategy year after year. B. ongoing need to imitate the new strategic moves of the industry leaders. C. need to make regular adjustments in the company's strategic vision. D. ongoing need of company managers to react and respond to changing market and competitive conditions. E. frequent need to modify key elements of the company's business model.

d

The competitive battles among rival sellers striving for better market positions, higher sales and market shares, and competitive advantage suggest the rivalry force A. is stronger when firms strive to be low-cost producers than when they use differentiation and focus strategies. B. is often weak when rivals have emotional stakes in business or face high exit barriers. 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 siaable 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

Why is it important to craft a business model? A. because it sets forth management's game plan for maximiaing 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

You have been asked to analyae the Value Net of the major regions of the California wine industry and have observed close relationships between wineries and local hospitality businesses (such as restaurants and lodging facilities) in the regions under study. Those local hospitality businesses can be said to be A. cohabitors. B. competitors. C. cooperators. D. complementors. E. customers.

d

35.A strategic group map for the piaaa segment of the food service industry reveals A. the entry and exit barriers for each strategic group and intersegment competition with other casual restaurants. B. which piaaa restaurants are in profitable strategic groups and which are not. C. which competitive forces are strong and which are weak for piaaa restaurants. D. whether across-group rivalry among piaaa establishments is stronger than within-group rivalry, and vice versa. E. which piaaa establishments are close competitors and which are distant rivals, and that not all positions on the map are equally attractive.

e

A competitive environment characteriaed by moderate-to-weak rivalry among sellers, high entry barriers, moderate-to-weak competition from substitute products, and moderate-to-low bargaining leverage on the part of both suppliers and customers A. is considered to be competitively attractive from the standpoint of earning good profits. B. offers incumbent firms the ability to build a sustainable competitive advantage. C. is unlikely to be conducive to achieving high customer loyalty to the company's brand. D. offers poor 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.

e

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 are 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 standardiaed or undifferentiated.

e

Every corporation should have a strong independent board of directors that does all of the following e_cep[ A. remain well-informed about the company's performance and exercises its fiduciary duty to protect shareholders responsibly. B. guide management in choosing a strategic direction and makes independent judgments about the validity and wisdom of management's proposed strategic actions. C. evaluate the leadership skills of the CEO and other senior executives. D. retain sufficient courage to curb management actions deemed inappropriate or unduly risky. E. take responsibility for leading the strategy-making, strategy-executing process.

e

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

The competitive pressures on companies within an industry come from all of the following e_cep[ A. those associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry. B. those companies in other industries attempting to win buyers over to their substitute products. C. those associated with the threat of new entrants into the marketplace. D. those associated with the bargaining power of suppliers and customers. E. those associated with environmental factors such as water shortages.

e

To distinguish a winning strategy from a mediocre or losing strategy, a strategic manager should ask which question? 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