Business Strategy- Exam 1

Which of the following are developed during the first stage in crafting a company strategy? (Choose every correct answer.)

-A mission statement -A strategic vision -A set of core values

Which circumstances commonly require the modification of a company's strategy? (Choose every correct answer.)

-A shift in buyer needs -Technological advances -New market opportunities

Which performance indicators are signs of a winning strategy? (Choose every correct answer.)

-Above-average financial performance -Gains in competitive position -Increased market share

Intel uses its ______ to give top priority to PC manufacturers that primarily use Intel chips.

market dominance

The general profit formula for fast-food restaurants as invented by McDonald's involves which of the following? (Choose every correct answer.)

-Advertising and in-store promotions -Strict specifications for ingredients -Standardized store design

Which three companies have broad differentiation strategies that have allowed them to maintain long-term competitive advantages?

-BMW -Apple -Johnson & Johnson

What are three of the most reliable ways a company can distinguish itself in the marketplace, build customer loyalty, and achieve a competitive advantage?

-Broad differentiation strategy -Focused low-cost strategy -Low-cost provider strategy

What are the two basic ways that companies achieve competitive advantage over their business rivals?

-By delivering higher perceived value to customers -By producing products or services at a lower cost

Which of the following are the components of a fit test that help evaluate how well a company's strategy matches its situation? (Choose every correct answer.)

-External fit -Internal fit -Dynamic fit

In what ways does a competitive advantage benefit a business?

-Greater success in the marketplace -Larger profits

Which of the following are true statements about crafting and executing strategy? (Choose every correct answer.)

-High-performing enterprises are nearly always the product of astute, creative, and proactive strategy making. -The processes of crafting and executing strategies must go hand-in-hand if an enterprise is to be successful in the long run.

What choices must managers consider when committing to a company strategy for competing against rival companies? (Choose every correct answer.)

-How to attract customers -How to respond to market conditions -How to capitalize on growth opportunities

Which of the following are factors that affect the intensity of rivalry among competing sellers within an industry? (Choose every correct answer.)

-New entrants -Substitutes -Suppliers

What are two characteristics of a broad differentiation strategy?

-Offering products or services that are difficult to imitate -Appealing to a wide range of consumers

A company's business model is comprised of which of the following? (Choose every correct answer.)

-The customer value proposition -The profit formula

When do strategic actions fall into the "should not do" category? (Choose every correct answer.)

-They make the company look bad. -They have a negative effect on customers, employees, and the surrounding community. -They cause a public backlash and accusations of being irresponsible.

Which of the following are reasons for crafting and executing strategies to be important managerial tasks? (Choose every correct answer.)

-They provide a path to competitive advantage. -They lay out the means for pleasing customers. -They establish a formula for improving performance.

A business strategy becomes unethical when it involves what elements? (Choose every correct answer.)

-Unreasonable damage to the environment -Deceitfulness -Disreputable behavior

Which conditions increase rivalry among competing sellers? (Choose every correct answer.)

-When buyer demand is growing slowly -When the cost of switching brands is low

What is a company slogan?

A brief phrase that summarizes the company's vision

What is a stretch objective?

A performance target that will require significant effort to achieve

Are SiriusXM's revenue streams from advertising and equipment sales growing or declining?

Advertising revenues and equipment sales are growing.

What is there about Apple's strategy that can lead to sustainable competitive advantage?

Apple has sustained its competitive advantage through being sufficiently innovative to thwart the efforts of rivals to copy or closely imitate the product offering.

Does the strategy seem to be keyed to a cost-based advantage, differentiating features, serving the unique needs of a niche, or some combination of these?

Apple's strategy is keyed in on differentiating features from that of its rivals in ways that will appeal to a broad spectrum of buyers.

What aspect of a company's operations is usually the easiest thing for competitors to duplicate?

Attributes of the company's products or services

What are some of the ways that companies typically implement a competitive strategy?

By delivering superior customer service By diversifying product lines By focusing on quality

What are two basic approaches in company strategy to improve chances of success in competing against rivals?

Clearly differentiate a company from its rivals. Establish a position in an uncrowded market.

Flipkart has come to epitomize the Indian e-commerce industry, achieving the top position among online shopping platforms in that country. Notably, Flipkart offered a no-questions-asked return/exchange policy, wherein customers could return goods that did not meet their expectations. Flipkart is now considering entering markets in South Africa and Kenya. What would you advise Flipkart to omit from consideration in crafting a strategy to enhance future profits in these two emerging markets?

Create a sales plan that aims to enhance initial sales and market penetration with low prices based on high operational costs.

The video explains the military origins of the term strategy, but then goes on to explain how Michael Porter closed the gap between military and business thinking with his definition of business strategy. Select the option that best defines strategy in the context of business.

Generals win wars by degrading the enemy's ability and willingness to fight. Businesses win market share by degrading a competitor's ability and willingness to compete.

Which statement about the connection between good strategy and good execution is true?

Good management consists of good strategy and good strategy execution.

What is one key characteristic of a focused low-cost strategy?

It seeks to sell to a narrow market niche.

What allowed Honda to successfully enter the U.S. lawn mower market despite local competition?

Its reputation and its expertise with gasoline engines

As you saw in the video, one of the measures used to demonstrate Usain Bolt's competitive advantage in running is the number of gold medals he won during the Olympics. Which of the following measures, as described in the video, similarly demonstrates McDonald's competitive advantage in the fast-food industry?

Market share

What company invented the business model for fast food restaurants?

McDonald's

A company's profit formula consists of the following basic elements:

P, the price charged to customers, minus C, the company's costs.

Does SiriusXM's cost structure allow for acceptable profit margins?

SiriusXM's cost structure allows for an acceptable profit margin.

Are SiriusXM's subscription fees increasing or declining?

Subscription fees are increasing.

In the video, business strategy was identified as a decision to choose "a different set of activities to deliver a unique mix of value." Which of the automotive firms follows this proposition most closely?Tes

Tesla

In the 'Art of War' Sun Tzu emphasized the fluid nature of competitive situations and the need for the strategist to recognize and incorporate that reality into their strategic planning. Which of the following has created the greatest uncertainty in the business environment across industries over the last 20 years?

The Internet

Why do some companies state their core values but make little effort to ensure that individual personnel and the company in general will abide by them?

The statement about values serves only to make the company look good.

The group of runners that finished behind Usain Bolt was closely bunched and was said to have competitive parity. Burger King and Wendy's have a similar market share in the 5% range. Which of the following likely underlies the comparative parity of these firms?

They have similar strategic resources and strategies.

What is the purpose of the fit test?

To determine how well a strategy matches the company's situation

What is the purpose of a company's strategic vision?

To steer the company toward long-term growth and profits

True or false: It is easier for rivals to imitate a company's product line than it is for them to duplicate its capabilities.

True

Sustainable competitive advantage means a firm outperforms its peers over a sustained period of time. Such superior performance is noticed by the peer group that attempts to identify the source of the performance and copy it. This concept is called "benchmarking." Which of the following demonstrates a benchmarking process?

When Bolt was younger, he trained against other great runners, comparing his training program and performance to theirs.

The threat of ______ increases competitive pressure on incumbent firms.

a new entrant in an industry

Gerard's Paella, a tapas bar and paella restaurant, offers healthy, sustainably sourced, as well as veggie and vegan, cuisine at higher prices than its competitors in the market and has a drive-through and indoor seating casual dining operation. What strategy is Gerard's Paella using to gain competitive advantage?

a focused differentiation strategy

A strategy to achieve and maintain sustainable competitive advantage is never associated with

actions taken by companies to gain sales and market share irrespective of product prices and costs.

A strategy that changes in response to new market conditions and challenges is known as ______.

an evolving strategy

A measurement system that links financial performance goals with strategic goals is called a ______.

balanced scorecard

Why does a company's strategy tend to be a "work in progress" and evolve over time?

because of changing circumstances and ongoing management efforts to improve the strategy

typically, a company's strategy making must ______.

begin at the top of a company

A blueprint that outlines the means for a company to deliver value to customers in a suitably profitable manner is known as its ______.

business model

The ability of sellers to raise prices without losing sales is restricted by ______.

buyer price sensitivity

Does Apple's strategy seem to set it apart from rivals?

by providing exciting new products that are beautifully designed, technologically advanced, easy to use, and sold in appealing stores that offer a fun experience, knowledgeable staff, and excellent service.

A cleverly crafted and well-executed strategy

can withstand the competitive challenges from rival firms.

A sound company strategy is essentially about ______ in comparison to company rivals.

competing differently

When a business is more successful than its rivals at attracting customers and handling competition, it is said to have a(n) ______ advantage.

competitive

Strategic performance is measured by the rise and fall of a company's ______.

competitiveness

A company's approach to meeting or exceeding its customers' needs at a price they consider a good value is called the _____.

customer value proposition

The actions that a company takes in accordance with its established business practices make up its ______ strategy, in contrast with actions the company takes in response to changing market conditions.

deliberate

The competitive factors that most affect industry members' ability to prosper in the marketplace are known as ______ factors.

key success

The key for a company to achieve competitive advantage is either to provide superior value to customers or to deliver value more ______.

efficiently

Actions taken in response to new strategic maneuvers by rival firms or other unanticipated market circumstances make up a company's ______ strategy.

emergent

Organizing and guiding a new business activity is called ______.

entrepreneurship

The profit _____ is the company's approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition.

formula

A toy-making business is part of a larger corporation that owns various other businesses. The toy-making business unit decides to increase its production of board games. This is an example of a(n) ______.

functional-area strategy

You are a strategic consultant to Danielle and Casey, partners in a local upscale coffee-roasting and retail business. In counseling the partners about how to achieve a sustainable competitive advantage, you most likely would advise them to

have some distinctive strategic element that draws in customers and produces a competitive edge.

Supplier power is greatest when demand for products is ______ and the products are ______.

high; in short supply

Types of actions and approaches that often characterize a company's strategy do not include actions to

improve ethical standards, ensure employees' commitments, and continuously develop new talents.

The manager of a plant that produces canned goods and is owned by a food and beverage company develops a strategy for updating its production lines while maintaining its quality controls. This is an example of a(n) ______.

operating strategy

A company's realized strategy is a combination of ______

proactive and reactive elements

A typical company's strategy is often both ______, meaning that it plans ways to improve the company's competitiveness, and ______, meaning that it responds to unforeseen market conditions.

proactive; reactive

A company's business model does not

reflect how efficiently a company can meet customer wants and needs even at the cost of incurring loss.

When evaluating proposed or existing strategies, managers should

scrutinize their company's existing strategies on a regular basis to ensure that they offer a good strategic fit, create a competitive advantage, and result in above-average performance

A sense of "where we are going" is called the company's ______.

strategic vision

When two industries are closely related to one another, companies can be threatened by the competitive pressure produced by ______ products.

substitute

Powerful ______ can end up eroding industry profitability by ______ higher prices.

suppliers; charging

A company's strategy

tends to be a combination of both proactive and reactive elements, with certain elements being abandoned because they have become obsolete or ineffective.

When evaluating strategy options, companies must determine whether a competitive ______ exists where competitors are able to create and capture new demand.

white space