Chapter 1

Identify the company with a low-cost provider strategy.

A baby products retailer sells unassembled baby furniture produced in China.

Consider the following five companies and their situations. • Company A is an established online fantasy sports gaming company that has been accused of game-rigging, bribes and kickbacks. • Company B, a ride share company, has delayed its planned initial public offering due to reports of having an inhospitable workplace characterized by sexual harassment and discrimination. • Company C, a pharmaceutical manufacturer, charges higher prices for life-saving drugs in some countries than it charges in others. • Company D, a manufacturer and marketer of high-end consumer electronics, has a strict Code of Conduct that requires its suppliers to comply with several standards regarding safe working conditions, fair treatment of workers, and environmentally safe manufacturing. • Company E, a pizza delivery business, is a being boycotted by customers and losing sponsored tie-ins with professional sports due to racist comments by its founder and CEO. Which of the above companies is distinguished by an ethical strategy as opposed to an unethical or flawed strategy?

Company D

A regional electric scooter manufacturer sells its scooter at a lower price than other manufacturers of two-wheeler scooters. What will make the product most attractive for customers?

High Value

A pharmaceutical giant acquires a manufacturer of rare specialty drugs to improve its falling share prices and invests all its wealth into the deal. Due to a deficit, it agrees to do a joint venture for the acquisition and involves a major automobile giant to fund the deal. After a rocky start, the companies now have a strong market position and generate good profits. How would you characterize this company's strategy?

It is a winning strategy

Changing circumstances and ongoing managerial efforts to improve the strategy

account for why a company's strategy evolves over time.

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.

Amy's Drive-Thru, a fast food facility, offers healthy, sustainably grown veggie and vegan fast food at higher prices than its competitors in the market and has a drive-through and indoor seated casual dining operation. What strategy is Amy's Drive-Thru using to gain competitive advantage?

a differentiation strategy

Every strategy needs

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

A search engine giant specializes in all types of search items; provides a free translation feature for 80 different languages; stores all passwords for commonly visited sites in encrypted form; allows users to view ads on previously made related searches; provides suggestive search items to assist the user; allows users to view a collection of related web pages users might want to visit; and provides a faster load time and more accurate hits than its rivals. This search engine company uses a profit formula that primarily consists of

allowing users to view ads on previously made related searches.

The heart and soul of a company's strategy-making effort is determining how to

come up with moves and actions that produce a durable competitive edge over rivals.

A creative, distinctive strategy that delivers a sustainable competitive advantage is important 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.

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 most significant signs of a well-managed company are

good strategy-making combined with good strategy execution.

A "repeatedly evolving strategy" best applies to a

mobile phone company, established in a saturated market, that plans its research and development activities to allow for quarterly releases of new products that match or overtake features of rivals' mobile phones.

A pharmaceutical company selling prescription drugs in France for the past 10 years has had moderate sales in a crowded market, as its rivals manufacture and market drugs of similar efficacy and having similar safety precautions, but that have superior market share. This particular pharmaceutical company's greatest challenge is to increase French doctors' prescribing their drugs. What would be the most effective strategy to improve sales performance in the existing market?

modifying marketing communication to increase brand familiarity within key physician segments

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.

If you were asked to develop a low-cost provider strategy for a startup passenger air carrier business, what would you most likely not recommend?

offer low prices on long-distance flights and maintain long service times for aircraft between flights

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.

To improve performance, there are many different avenues for outcompeting rivals such as

strengthening competitiveness by pursuing strategic alliances and collaborative partnerships.

An evolving strategy for a ride-share business like Uber or Lyft is not likely to be triggered by

their need to respond to short-term swings in the stock market that impact timing of an initial public offering (IPO).