BUS 475 FINAL STUDY GUIDE
Which of the following statements best defines the difference between economies of scale and economies of scope?
Scale refers to cost savings based on larger-sized operations; scope is based on the strategic fit along the value chains of related businesses
the hallmarks of a high-performance corporate culture include
a can-do spirit pride in doing things right, no-excuses accountability, and a pervasive results-oriented work climate where people go the extra mile to meet or beat stretch objectives
Which of the following is NOT accurate as concerns a distinctive competence?
a distinctive competence is typically less restrictive for rivals to copy than a core competence
Every Strategy needs...
a distinctive element that attracts customers and produces a competitive edge.
When a company has become proficient in modifying, upgrading, or deepening the company's resources and capabilities in response to its changing environment and market opportunities, it is called
a dynamic capability
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"
Retrenching to a narrower diversification base is
a strategy that allows a diversified firm's energies to be concentrated on building strong positions in a smaller number of businesses rather the stretching its resources and managerial attention too thinly across many businesses.
In a single-business company, the strategy-making hierarchy consists of
business strategy, functional strategies, and operating strategies
How is the relative market share of a company's calculated?
by dividing a company's percentage share of total industry sales volume by the percentage share held by its largest rival
Competitive Intelligence can be gleaned from
company press releases, company websites, management presentations, and annual reports and 10-K filings.
Benchmarking involves
comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs of these activities
Which of the following is NOT a characteristic of an effectively worded strategic vision statement?
consensus-driven (commits the company to "mainstream" directional path that almost all stakeholders will enthusiastically support)
which of the following descriptions characterizes core competencies and capabilities in the least accurate way?
core competencies generally grow out of company efforts to master a strategy-critical technology or to invent a patent a valuable technology
A low-cost provider strategy can defeat a differentiation strategy when
customers are basically satisfied and don't think extra attributes are worth a higher price features
What is the foremost strategic issue that must be addressed by firms when operating in two or more foreign markets?
deciding on the degree to vary its competitive approach to fit the specific market conditions and buyer preferences in each host country
Profit sanctuaries are country markets or geographic regions where a company
derives substantial profits because of its protected market position or unassailable competitive advantage.
Strategy, at its essence, is about...
developing lasting success that can support growth and secure the company's future over the long term.
the "triple bottom" line refers to what three performance metrics a company should simultaneously succeed in?
economic,social,environmental
The means to enhance differentiation through activities at the forward end of the value chain system do NOT include
enhancing cost-reducing activities with defensive functionality designed to create incentives
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?
establishing a comparison feature tab that allows customers to compare offerings from other online retailers
The strategy-making, strategy-executing process is shaped by
external factors such as the industry's economic and competitive conditions and internal factors such as the company's collection of resources and capabilities
A winning strategy is one that...
fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance
The primary reasons that companies opt to expand into foreign markets are to
gain access to new customers, achieve lower costs, enhance the company's competitiveness, capitalize on core competencies, and spread business risk across a wider market base
Good corporate citizens
go beyond meeting society's expectations for ethical strategies and business behavior by fostering social benefit and balancing the interests of all.
The advantages of using an acquisition strategy to pursue opportunities in foreign markets include
having a high level of control and speed as an entry strategy to overcome trade barriers
a key organizing challenge of a decentralized structure that underscores employee empowerment is
how to balance the benefits of empowerment with the risk of less control over the decisions and actions of empowered employees
Which of the following is NOT something that can be gleaned from a company's SWOT?
how to turn a core competence into a distinctive competitive
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.
Which of the following is the best example of a well-stated financial objective?
increase earnings per share by 15% annually
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
What is it called when a diversified company can add value by shifting capital from business units generating free cash flow to those needing additional capital to expand and realize their growth potential?
internal capital markets
The most common building blocks for a company's organizational structure
involve a functional or departmental structure that includes process geographic product, or customer groups performing one or more major processing steps
Corporate restructuring strategies
involve making radical changes in a diversified company's business lineup, divesting some businesses and acquiring new ones so as to put a new face on the company's business lineup.
Even when the organizational culture is strong, it is prone to failure unless it
is compatible with what is needed for effective implementation of chosen strategy
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
A "think-local, act-local" multidomestic type of strategy
is more appealing when the country-to-country differences in buyer tastes, cultural traditions, and market conditions are diverse
A company might consider diversifying into new industry when
it is a single business company, which encounters diminishing market opportunities and stagnating sales in its principal business
Crafting and executing a strategy is a top-priority managerial task 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 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
What is most likely the first step that must be taken by the organization, once values and ethical standards have been formally established
it must be made clear that the values and ethical standards become enforceable norms of organizational behavior
A company's culture indicated all of the following except
its core competencies and capabilities along the value chain
Which of the following statements describes a key disadvantage of a decentralized organization structure?
may put the organization at risk if higher-level management is unaware of the actions of empowered personnel under their supervision
an environmental sustainability strategy consists of a company's deliberate actions to
meet the current needs of customers, suppliers, shareholders, employees and stakeholders in a manner that protects the environment, provides for the longevity for natural resources, maintains ecological support systems for future generations, and guards against ultimate endangerment of the planet
Larger firms with more complex organizational structures are
more decentralized in their decision making than smaller firms
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.
The essence of a broad differentiation strategy is to
offer unique product attributes in ways that are valuable and appealing and that buyers consider worth paying for
A focused differentiation strategy aims at securing competitive advantage by
offering a product carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers
The character of a company's culture is not a product of
organizational learning from past errant behavior on the part of executives and employees
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 key duties of a company's board fo 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
The major avenues for achieving a cost advantage over rivals include
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
The difference between political risks and economic risks is that
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
An acquisition premium is the amount by which the price offered for an existing business exceeds the
preacquisition market value of the target market
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 transnational approach of a firm using a "think-global, act-local" version of a global strategy entails
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
Which of the following is most likely one of the first steps to take in launching a successful process of implementing the organization's strategy?
put together a talented management team with the right mix of experiences, skills, and abilities to get things done
A firm pursuing a best-cost provider strategy
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).
Which of the following driving-forces would have the LEAST impact on the attractiveness of the automobile industry
shifts in who buys the product and how the product is used
A healthy fast-casual restaurant that offers only vegetarian and vegan meals insists on portraying organic ingredients in its advertisements, charges a higher price for its meals, and has a rigorous quality control process to insure the cleanliness of its facilities. What strategy is the manufacturer using to deliver superior value to customers?
signaling value by targeting sophisticated buyers
Which of the following summarizes the most valid reasons to explain what makes the managerial task of strategy implementation so challenging?
strategy execution is challenging because of the development of people-management skills required to implement successfully- those that overcome resistance to change and those that ensure the perseverance necessary to get a variety of initiatives moving along
Business strategy concerns
strengthening the market position and building competitive advantage for a single line of business
Which of the following is NOT generally an action for a company to consider in crafting a strategy of social responsibility?
taking steps to provide suppliers, distributors, and other value chain partners with handsome profit margins
Which one of the following is NOT an intangible resource?
technological assets
A differentiation strategy works best when
technological change is fast-paced and competition revolves around rapidly evolving product features.
The strategically relevant factors outside a company's industry boundaries - economic conditions, political factors, sociocultural factors, technological factors, environmental factors, and legal/regulatory conditions - are known as
the company's "macro-environment"
Two of the biggest disadvantages of unrelated diversification are
the demanding managerial requirements and the limited competitive advantage potential due to lack of cross-business strategic fit benefits
A potato chip manufacturer purchases a potato farm. Which of the following regarding its strategy is true?
the manufacturer has effectively used vertical integration to increase its bargaining position and reduce transaction costs
The bargaining leverage of suppliers is greater when
the suppliers' products/services account for a small percentage of industry members' costs
the basic requirement that has to be met for two different businesses to be called "related" is that
the value chains of the two different businesses share competitively valuable cross-business commonalities
which of the following statements is more accurate about a company's value statement and code of ethics?
they help to mold the culture and communicate what kinds of actions and behaviors are expected
According to the school of ethical universalism
to the extent there is common moral agreement about right and wrong actions and behaviors across multiple cultures and countries, there exists a set of universal ethical standards to which all societies, all companies, and all individuals can be held accountable.
The marketing emphasis of a company pursuing a broad differentiation strategy usually is to
tout differentiating features and charge premium price that more than covers the extra costs of differentiating features
how can executives and other-level managers stay informed on the effectiveness of the strategy implementation?
use management-by-walking-around approach to getting informed
All of the following will most likely hinder the development of a healthy and strong culture, except
using empowerment to help create and motivate workforce
which statement most accurately completes the following sentence: The process of implementation of corrective adjustment during strategic implementation...
varies according to the situation
Rivalry among competing sellers decreases
when buyer demand is growing rapidly
The school of ethical relativism holds that
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.
sometimes multiple cultures are formed within the same organization. When is this likely to become a series problem?
when they support incompatible business philosophies of behavior within the organization that are not consistent with an effective strategy implementation
While there are many routes to competitive advantage, the two biggest factors that distinguish one competitive strategy from another are
whether a company's target market is broad or narrow and whether the company is pursuing a low cost or differentiation strategy
One of the biggest strategic challenges to competing in the international arena include
whether to offer a standardized product worldwide or a customized product offering in each different country market
The best way for a company to achieve diversification into new industries is through
Acquiring a company already operating in the target industry, creating a new business from scratch or forming a joint venture with one or more companies to enter the target industry
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?
All three companies employ deliberate strategies
Which of the following is LIKELY to have the biggest strategy-shaping impact on on-demand transportation providers such as Uber and Lyft?
Apple launches a global network of driverless cars, buses, and trucks on demand via mobile app
Which of the following is NOT a part of the business case for why companies should act in a socially responsible manner?
Every business has a moral duty to be good corporate citizen
Which one of the following statements is most accurate? The implementation of a company's strategy should always
Be customized to fit the particulars of a company's situation
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?
Best Practice Concept
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
Which of the following consumer goods companies does NOT pursue the same business model?
Dell Laptops
How do ethical principles apply to businesses?
They are not materially different from ethical principles in general.
A weaker U.S. dollar is an economically favorable exchange-rate shift for manufacturing plants based in the United States.
This is a true statement.
Which one of the following managers is most likely to have strong capabilities oriented toward effective strategy implementation?
Valery typically probes with tough, incisive questions
Key functional strategies of a company include all of the following EXCEPT
alliance and partnerships as well as merger and acquisition growth strategies
Superior Strategy Execution Capabilities
are hard for rivals to imitate
Notions of right and wrong, fair and unfair, moral and immoral, ethical and unethical
are present in all societies, organizations, and individuals
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.
for a particular company resources/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
Which of the following is NOT an example of strategic objective
boost internal cash flows by 7% to fund new research and development activities
Which of the following is most likely to be morally valid from the perspective of ethical relativism?
bribing a government official in an undeveloped country to obtain a permit to build a hospital
A think-global, act-global strategic theme puts emphasis on
building a global brand name and aggressively pursuing opportunities to transfer ideas, products, and capabilities from one country to another
