490 Final
D
A "balanced scorecard" that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because A. it assists managers in putting roughly equal emphasis on short-term and long-term performance targets. B. it entails putting equal emphasis on good strategy execution and good business model execution. C. a balanced-scorecard approach pushes managers to avoid Strategic Management that reflect the results of past decisions and organizational activities. D. 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. E. it forces managers to put equal emphasis on financial and strategic objectives
D
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
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
A
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
D
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
C
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
A
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
A sustainable competitive advantage is gained when a company A. has durable competitive assets that are central to its strategy and superior to those of rival firms. B. has sufficient resources to expedite its strategy. C. realizes its inherent weaknesses are transformable to advantages. D. can stand out relative to rivals because of resource utilization. E. has resources in well-populated geographical locations.
E
A weighted industry attractiveness assessment is generally analytically superior to an unweighted assessment because A. a weighted ranking identifies which industries offer the best/worst long-term profit prospects. B. an unweighted ranking doesn't discriminate between strong and weak industry driving forces and industry competitive forces. C. it does a more accurate job of singling out which industry key success factors are the most important. D. an unweighted ranking doesn't help identify which industries have the easiest and hardest value chains to execute. E. the various measures of attractiveness are not likely to be equally important in determining overall attractiveness
C
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.
E
Adopting a set of "stretch" financial and "stretch" strategic objectives A. pushes the company to strive for lesser but adequate profitability levels, because the stretch objectives are considered unattainable. B. is a widely held method for creating a "scorecard" for monitoring company performance. C. helps convert the mission statement into meaningful company values. D. challenges company personnel to execute the strategy with greater enthusiasm, proficiency, and understanding. E. is an effective tool for pushing the company to perform at its full potential and deliver the best possible results.
E
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
A
Benchmarking involves A. comparing how different companies perform various value chain activities and then making crosscompany 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 its direct competitors. 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
B
Business process reengineering is a tool for A. expediting the redesign of existing products and shortening the design-to-market cycle. B. radically redesigning and streamlining how an activity (workflow) is performed, by pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group. C. instituting total quality management. D. making the most effective use of Six Sigma techniques. E. the rapid redesign of an organization's structure so as to quickly create organizational competencies and capabilities.`
C
From a strategy-implementing/strategy-executing perspective, operating budget allocations should A. primarily be based on the number of new strategic initiatives being implemented in each operating department. B. be based on the number of people employed in each of the divisions. C. be strategy-driven and based on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively. D. be linked to the costs of performing value chain activities as determined by benchmarking against best-in-industry competitors. E. depend on how much stretch there is in each department's objectives and what additional resources are needed to help reach these performance targets
D
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
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
B
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.
C
Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition A. are generally advocates of the ethical relativism school of thought. B. are misguided in their efforts because bribes and kickbacks are really no different from tipping for service at restaurants as you pay for a service rendered. C. face a particularly vexing problem of losing business to competitors that have no scruples—an outcome that penalizes ethical companies and company personnel. D. are out-of-step with business reality given that the preponderance of company managers are immoral. E. are in a distinct minority compared to companies that view the payment of bribes and kickbacks as a legitimate or permissible practice
c
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 latemover (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).
D
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
B
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
Perhaps the most important benefit of a vivid, engaging, and convincing strategic vision is A. helping gain managerial consensus on what resources must be developed to successfully achieve strategic objectives. B. uniting company personnel behind managerial efforts to get the company moving in the intended direction. C. helping justify the company's mission of making a profit. D. helping company personnel understand the logic of the company's business model. E. keeping company personnel well-informed.
A
Rivalry among competing sellers increases: A. when buyer demand is growing slowly. B. as it becomes more costly for buyers to switch brands. C. as the products of rival sellers become more strongly differentiated.
B
Short-termism is defined as A. making assessments of the moral character of a company's managers. B. the tendency for managers to focus on immediate performance objectives at the expense of longerterm strategic objectives. C. assessing the costs and damages to the company's reputation as a result of ethical violations. D. weighing the short-term costs of regulatory compliance with the long-term costs of noncompliance. E. assessing the short-term costs of complying with government regulations. Short-termism is the tendency for managers to focus excessively on short-term
A
Six Sigma programs A. utilize advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes. B. consist of a disciplined, statistics-based system aimed at producing not more than 2.5 defects per million iterations for a manufacturing or assembly process. C. are based on three principles: (1) all work is a statistically controllable process; (2) no wellcontrolled process allows variability; and (3) defect-free work requires tight statistical controls. D. suggest that all activities can be controlled, employee empowerment is the best control tool, and 100 percent control is possible. E. radically redesign and streamline how an activity is performed.
C
The contention that ethical standards should reflect the collective views of multiple societies in establishing a set of universal ethical principles (that are widely recognized as laying legitimacy to ethical boundaries on actions and behavior in all situations) and in allowing inclusion of a set of prevailing customary actions of local cultures or groups (with their traditions and shared values), that further prescribe to what represents ethically permissible behavior and what does not, constitutes the basic principles of A. the school of ethical relativism. B. the school of ethical universalism. C. integrated social contracts theory. D. corporate social responsibility. E. the triple bottom line.
A
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
The essential requirement for different businesses to be "related" is that A. their value chains exhibit competitively valuable cross-business commonalities. B. the products of the different businesses are bought by many of the same types of buyers. C. the products of the different businesses are sold in the same types of retail stores. D. the businesses have several key suppliers in common. E. the production methods they employ both entail economies of scale. Businesses are said to be related when their value chains exhibit competitively important cross-business commonalities.
D
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
The idea behind benchmarking and best practices is to A. identify which companies are the best performers of a strategically relevant activity and then copy their methods exactly. B. search the world for a company that performs a strategically relevant task or value chain activity at the lowest possible cost and then use business process reengineering techniques to try to meet or beat the costs of the world's low-cost performer of that activity. C. perform each activity in the industry value chain according to standard industry practice and then regularly benchmark the company's performance to see if it is actually achieving the industry standard. D. identify companies that are the best performers of an activity and then "adapt" their practices to fit the company's own specific circumstances and operating requirements.
B
The school of ethical relativism holds that A. what constitutes ethical or unethical conduct should be determined by the religious convictions of each society or each culture within a country. B. when there are cross-country or cross-cultural differences in what is deemed ethical or unethical in business situations, it is appropriate for local moral standards to take precedence over what the ethical standards may be elsewhere. C. concepts of right and wrong are always governed by business norms in each country, culture, or society. D. concepts of right and wrong are always a function of each individual's own set of values, beliefs, and ethical convictions. E. concepts of right and wrong as they apply to business behavior are always absolute and usually more stringent than universal ethical principles.
B
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
A
Total quality management (TQM) A. entails creating a total quality culture that strives for continuously improving the performance of every value chain activity and is driven by a philosophy of managing a set of business practices: 100 percent accuracy in performing tasks (zero defects), involvement and empowerment of employees at all levels, team-based work design, benchmarking, and total customer satisfaction. B. is a valuable tool for helping company managers identify what the best practice is for performing a particular activity at a high level of quality. C. works best when used in conjunction with Six Sigma quality control techniques. D. is an excellent tool for reengineering business processes and making quantum gains in the efficiency and effectiveness with which the processes are performed.
A
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
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. are a good strategy option for helping a company revamp its value chain and bypass low valueadded activities
D
What is the difference between economies of scale and economies of scope? A. Scale refers to the magnitude or size of the operation, while scope refers to the reach of defined savings within the value chain. B. Scale refers to the extent of change, while scope refers to the possibilities of change. C. Scale is about dimensions, while scope is about the capacity available for production capabilities. D. Scale refers to cost savings that accrue directly from larger-sized operations, while scope stems directly from strategic fit along the value chains of related businesses. E. Scale and scope mean the same thing and the only difference is the extent of cost savings accrued from unrelated businesses in each.
D
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.
C
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. strategic resource. C. distinctive competence. D. core competence. E. key success factor
C
Which of the following ARE common shortcomings of company vision statements? A. too specific and too flexible B. unrealistic, unconventional, and un-businesslike C. too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on superlatives D. too graphic, too narrow, and too risky E. not customer-driven, out of step with emerging technological trends, and too ambitious
A
Which of the following are integral parts of the managerial process of crafting and executing strategy? 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
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
E
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
C
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
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 A dazzling array of features and options not only drives up product price but also
E
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
A
Which of the following is true of the school of ethical universalism? A. They are ethical principles that set forth the traits and behaviors considered virtuous and that a good person is supposed to believe in and display. B. They are ethical principles embodied in international law that all societies and countries are obliged practice. C. All societies and countries apply essentially the very same set of universally defined ethical principles of right and wrong in judging the ethical correctness of business behavior. D. It is mandatory that the standards of what's ethical and what's unethical be applied universally to all businesses in all countries irrespective of local business traditions and local business norms. E. The standards of what constitutes ethical and unethical behavior in business situations are partly universal, but in the main are governed by local business norms.
A
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
C
Which of the following statements about implementing and executing a new strategy is true? A. Executing strategy calls for essentially the same kinds of creative management talent and innovative thinking as does crafting strategy. B. Executing strategy is chiefly a financially driven process aimed at squeezing the most profit out of conducting daily operations. C. Executing strategy is a job for a company's whole management team, not just a few senior managers. D. Executing strategy depends heavily on the caliber of a CEO's business vision, industry and competitive analysis skills, and entrepreneurial creativity. E. Executing strategy tends to be a simpler, quicker management task to perform as compared to crafting a winning strategy
B
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.