BUS450 EXAM II
Which one of the following is not a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products? - To overcome disadvantages of small production volumes that limit scale economies and low production costs - To enable greater opportunities for employee advancement - To expedite the development of promising new technologies or products - To improve access to new markets - To improve supply chain efficiency
To enable greater opportunities for employee advancement
Determining whether a company's prices and costs are competitive - involves the use of benchmarking the costs in a company's value chain system (the costs of its suppliers, its internally performed activities, the costs of its distributors/dealers) against the costs of the value chain systems employed by rival firms. - requires considering the costs of a company's internally performed activities. - All of these. - typically involves the use of activity-based cost accounting. - requires looking at the costs of a company's competitively relevant suppliers and forward channel allies (distributors/dealers).
All of these
A company's strength can concern - a skill, specialized expertise, or competitively important capability. - valuable human assets and intellectual capital. - an achievement or attribute that puts the company in a position of market advantage. - All of these. - competitively valuable alliances or cooperative ventures.
All of these.
Challenging a struggling rival can - accelerate the rivals exit from the market. - All of these. - weaken the rivals resolve. - sap its financial strength and competitive position. - threaten its overall survival in the market.
All of these.
Relying on outsiders to perform certain value chain activities offers such strategic advantages as - improving the company's ability to innovate by allying with "best-in-world" suppliers. - All of these. - reducing the company's risk exposure to changing technology and/or changing buyer preferences. - increasing the firm's ability to assemble diverse kinds of expertise speedily and efficiently. - obtaining higher quality and/or cheaper components or services.
All of these.
Which of the following is a purpose of a defensive strategy? - To help protect a competitive advantage. - To pressure challengers to aim their efforts at other rivals. - To lower the risk of being attacked. - All of these. - To weaken the impact of any attack that occurs.
All of these.
Which of the following signals can be given to challengers to warn that strong retaliation is likely? - All of these. - Publicly announcing management's commitment to maintain market share. - Publicly committing to a company policy of matching competitors' terms or pricing. - Making a strong counter response to the moves of weak competitors. - Maintaining a war chest of cash and marketable securities.
All of these.
Which of the following ways are employed by defending companies to fend off a competitive attack? - Offer better training and support services. - Grant volume discounts or better financing terms. - Gain product line exclusivity to force competitors to use alternate distributors. - Introduce new features, add new models, or broaden its product line. - All of these.
All of these.
Which of the following is not one of the four basic routes to achieving a differentiation-based competitive advantage? - Incorporating product attributes and user features that lower the buyer's overall costs of using the company's product - Incorporating features that enhance buyer satisfaction in intangible or non-economic ways - Delivering value to customers via competencies and competitive capabilities that rivals don't have or can't afford to match - Incorporating features that raise product performance - Appealing to buyers who are sophisticated and shop hard for the best, stand-out differentiating attributes
Appealing to buyers who are sophisticated and shop hard for the best, stand-out differentiating attributes
Which of the following is not a principal offensive strategy option? - Using a cost-based advantage to attack competitors on the basis of price or value. - Using hit-and-run or guerrilla warfare tactics to grab sales and market share. - Being the last competitor to market a next-generation product. - Launching a preemptive strike to secure an advantageous position that rivals are prevented or discouraged from duplicating. - Pursuing continuous product innovation to draw sales and market share away from rivals.
Being the last competitor to market a next-generation product.
Which one of the following is not part of conducting a SWOT analysis? - Identifying a company's market opportunities - Drawing conclusions about the company's overall business situation—what is attractive and what is unattractive about the company's circumstances? - Identifying a company's resource strengths and competitive capabilities - Benchmarking the company's resource strengths and competitive capabilities against industry key success factors - Translating the results of the analysis into actions for improving the company's strategy and market position
Benchmarking the company's resource strengths and competitive capabilities against industry key success factors
Which of the following is not a typical reason that many alliances prove unstable or break apart? - The emergence of more attractive technological paths - Disagreement over how to divide the profits gained from joint collaboration - Changing conditions that render the purpose of the alliance obsolete - Diverging objectives and priorities - An inability to work well together
Disagreement over how to divide the profits gained from joint collaboration
Which of the following is not one of the benefits of outsourcing value chain activities presently performed in-house? - Allows a company to concentrate on its core business, leverage its key resources, and do even better what it already does best - Enables a company to gain better access to end users and better market visibility - Streamlines company operations in ways that improve organizational flexibility and cut the time it takes to get new products into the marketplace - Improves a company's ability to innovate - Helps the company assemble diverse kinds of expertise speedily and efficiently
Enables a company to gain better access to end users and better market visibility
Which of the following rivals make the best targets for an offensive attack? - Firms that are weak in areas where challenger is strong. - Large national firms with vast capabilities. - Enterprises that are strong with no possibility of going under. - Small local and regional firms with considerable resources. - Strong secure market leaders.
Firms that are weak in areas where challenger is strong.
Which of the following is typically the strategic impetus for forward vertical integration? - Gaining better access to end users and better market visibility - Broadening the company's product line - Fewer disruptions in the delivery of the company's products to end-users - Allowing the firm access to greater economies of scale - Being able to control the wholesale/retail portion of the industry value chain
Gaining better access to end users and better market visibility
Which of the following is not a good example of a company's strength? - A lower-cost value chain than rivals - More intellectual capital and better e-commerce capabilities than rivals - Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance product quality and performance - A well-known brand name and enjoying the confidence of customers - Having higher earnings per share and a higher stock price than key rivals
Having higher earnings per share and a higher stock price than key rivals
Which of the following is not one of the ways that a company can achieve a cost advantage by revamping its value chain? - Relocating facilities so as to curb the need for shipping and handling activities - Replacing certain value chain activities with faster and cheaper online technology - Cutting out distributors and dealers by selling direct to customers - Streamlining operations by eliminating low value-added or unnecessary work steps and activities - Increasing production capacity and then striving hard to operate at full capacity
Increasing production capacity and then striving hard to operate at full capacity
Which of the following is not one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits? - Ensuring that both parties live up to their commitments - Picking a good partner - Structuring the decision-making process so that actions can be taken swiftly when needed - Recognizing that the alliance must benefit both sides - Minimizing the amount of resources that the partners commit to the alliance
Minimizing the amount of resources that the partners commit to the alliance
Which of the following is not a potential advantage of backward vertical integration? - Reduced risks of disruptions in obtaining crucial components or support services - Adding to a company's differentiation capabilities and perhaps achieving a differentiation-based competitive advantage - Reduced vulnerability to powerful suppliers (who may be inclined to raise prices at every opportunity) - Reduced costs - Reduced business risk because of controlling a bigger portion of the overall industry value chain
Reduced business risk because of controlling a bigger portion of the overall industry value chain
Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called - SWOT analysis. - company resource mapping. - strategic resource assessment. - competitive positioning analysis. - competitive asset/liability analysis.
SWOT analysis.
Which of the following is not part of the task of identifying the strategic issues and problems that merit front-burner managerial attention? - Assessing what challenges the company has to overcome in order to be financially and competitively successful in the years ahead - Analyzing the company's external environment - Surveying a company's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces - Developing a "worry list" of "how to...," "whether to....," and "what to do about....." - Evaluating the company's own resources and competitive position
Surveying a company's board members, managers, select employees, and key investors regarding what strategic issues they think the company faces
Which of the following is not an example of a threat to a company's future profitability? - Likely entry of potent new competitors - The lack of a well-known brand name with which to attract new customers and help retain existing customers - Growing bargaining power on the part of the company's major customers and major suppliers - Costly new regulatory requirements - Shifts in buyer needs and tastes away from the industry's product
The lack of a well-known brand name with which to attract new customers and help retain existing customers
What does the scope of the firm refer to? - The range of activities the firm performs internally and the breadth of its product offerings. - To prevent foreign competition affecting the market. - The range of activities the firm performs externally. - The firm's capability to employ vertical integration strategies. - To gain competitive advantage based on where it locates its various value chain activities.
The range of activities the firm performs internally and the breadth of its product offerings.
Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions? - To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy - To gain quick access to new technologies or other resources and capabilities - To create a more cost-efficient operation out of the combined companies - To expand a company's geographic coverage - To extend a company's business into new product categories
To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy
Which of the following is not one of the objectives of benchmarking? - To help construct a company value chain and identify which activities are primary and which are support activities - To learn how best practice companies achieve lower costs or better results in performing benchmarked activities - To identify the best practices in performing various value chain activities - To take actions to improve a company's cost competitiveness when benchmarking reveals that its costs and results of performing an activity are not as good as what other companies have achieved - To develop cross-company comparisons of the costs of performing specific value chain activities
To help construct a company value chain and identify which activities are primary and which are support activities
Which of the following is NOT a purpose of a defensive strategy? - To decrease the risk of being attacked. - To increase the risk of having to defend an attack. - To pressure challengers to aim their efforts at other rivals. - To help protect a competitive advantage. - To weaken the impact of any attack that occurs.
To increase the risk of having to defend an attack.
Which of the following is not one of the six questions that comprise the task of evaluating a company's resources and competitive position? - How well is the company's present strategy working? - Is the company competitively stronger or weaker than key rivals? - Are the company's prices and costs competitive? - What strategic issues and problems merit front-burner managerial attention? - What are the company's most profitable geographic market segments?
What are the company's most profitable geographic market segments?
In which of the following instances is being a first-mover not particularly advantageous? - When markets are slow to accept the innovative product offering of a first-mover and fast followers possess sufficient resources and marketing muscle to overtake a first mover - When moving first with a preemptive strike makes imitation difficult or unlikely - When early commitments to new technologies, types of components, or emerging distribution channels produce an absolute cost advantage over rivals - When being a pioneer helps build a firm's image with buyers - When first-time buyers remain strongly loyal to pioneering firms in making repeat purchases
When markets are slow to accept the innovative product offering of a first-mover and fast followers possess sufficient resources and marketing muscle to overtake a first mover
Which one of the following is not something that can be learned from doing a competitive strength assessment? - Which rival company is competitively weakest and the areas where it is most vulnerable to competitive attack -Which of the rated companies is competitively strongest and what size competitive advantage it enjoys -The factors on which a company is competitively strongest and weakest vis-à-vis key rivals -Whether a company should correct its weaknesses by adopting best practices and revamping the makeup of its value chain
Whether a company should correct its weaknesses by adopting best practices and revamping the makeup of its value chain
Entering into strategic alliances and collaborative partnerships can be competitively valuable because - they represent highly effective ways to achieve low-cost leadership and capture first-mover advantages. - they are a powerful way for companies to build loyalty and goodwill among customers with diverse needs and expectations. - working closely with outsiders is essential in developing new technologies and new products in virtually every industry. - cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology. - they are quite effective in helping a company transfer the risks of threatening external developments to other companies.
cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology
To build a competitive advantage by out-managing rivals in performing value chain activities, a company must - outsource all of its value chain activities to world-class vendors and suppliers. - eliminate its resource weaknesses. - develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers or else be more cost efficient in how it performs value chain activities such that it has a low-cost advantage. - position itself in the industry's more favorably situated strategic group. - develop resources strengths that will enable it to pursue the industry's most attractive opportunities.
develop core competencies and maybe a distinctive competence that rivals don't have or can't quite match and that are instrumental in helping it deliver attractive value to customers or else be more cost efficient in how it performs value chain activities such that it has a low-cost advantage.
Sizing up a company's overall resource strengths and weaknesses - is called competitive strength assessment. - is called company resource mapping. - essentially involves constructing a "strategic balance sheet" where the company's resource strengths represent competitive assets and its resource weaknesses represent competitive liabilities. - is called benchmarking. - is focused squarely on ascertaining whether the company has more/less resource strengths than weaknesses.
essentially involves constructing a "strategic balance sheet" where the company's resource strengths represent competitive assets and its resource weaknesses represent competitive liabilities.
Strategic offensives should, as a general rule, be based on - exploiting a company's strongest strategic assets. - the buyer's needs that the company seeks to satisfy. - implementing and executing the chosen strategy efficiently and effectively. - molding an organization's character and identity. - sizing up an organization's internal and external situation.
exploiting a company's strongest strategic assets.
Mergers and acquisitions - are highly risky because of the financial drain that comes from using the company's cash resources to pay for the costs of the merger or acquisition. - frequently do not produce the hoped-for outcomes. - are nearly always successful in achieving their desired purpose. - are usually more successful in achieving cost reductions than in expanding a company's market opportunities. - are generally less effective than forming alliances or partnerships with these same companies.
frequently do not produce the hoped-for outcomes.
A company's biggest vulnerability in employing a best-cost provider strategy is - getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies. - getting trapped in a price war with low-cost leaders. - not having a sustainable distinctive competence in cost reduction. - being timid in cutting its prices far enough below high-end differentiators to win away many of their customers. - relying too heavily on outsourcing.
getting squeezed between the strategies of firms employing low-cost provider strategies and high-end differentiation strategies.
The big risk of employing an outsourcing strategy is - hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success. - hurting a company's R&D capability. - putting the company in the position of being a late mover instead of an early mover. - causing the company to become partially integrated instead of being fully integrated. - increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain.
hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.
The range of product and service segments that the firm serves within its market is known as the firm's - product outsourcing. - horizontal scope. - vertical integration. - joint venture partnership. - vertical scope.
horizontal scope.
A company achieves best-cost provider status by - doing a better job than rivals of adopting the best operating practices. - having the best cost (as compared to rivals) for each activity in the industry's value chain. - incorporating attractive or upscale attributes into its product offering at a lower cost than rivals. - providing buyers with the best attributes at the best cost. - selling a product with the best cost at the best price.
incorporating attractive or upscale attributes into its product offering at a lower cost than rivals.
A blue ocean strategy - is an offensive attack used by a market leader to steal customers away from unsuspecting smaller rivals. - involves abandoning efforts to beat out competitors in existing markets and, instead, inventing a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand. - works best when a company is the industry's low-cost leader. - involves a preemptive strike to secure an advantageous position in a fast-growing market segment. - involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals.
involves abandoning efforts to beat out competitors in existing markets and, instead, inventing a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.
A core competence - is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs. - is often grounded in a single departments set of knowledge and expertise. - is typically results-based, residing in a company's tangible physical assets on the balance sheet. - All of these. - retracts from a company's arsenal of competitive capabilities and competitive assets and is not a genuine resource strength.
is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs
Question 17 5 / 5 pts A strategic alliance - is usually a cheaper and more effective way for companies to join forces than is merger. - is a collaborative arrangement where companies join forces to defeat mutual competitive rivals. - is a partnership between two companies that is typically intended to eliminate the need to engage in outsourcing. - involves two or more companies joining forces to pursue vertical integration. - is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, joint contribution of resources, shared risk, shared control, and mutual dependence.
is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, joint contribution of resources, shared risk, shared control, and mutual dependence.
A company resource weakness or competitive deficiency - is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace. - represents a problem that needs to be turned into a strength because weaknesses prevent a firm from being a winner in the marketplace. - prevents a company from having a distinctive competence. - causes the company to fall into a lower strategic group than it otherwise could compete in. - usually stems from having a missing link or links in the industry value chain.
is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace.
Broad differentiation strategies are well-suited for market circumstances where - barriers to entry are high and suppliers have a low degree of bargaining power. - price competition is especially vigorous. - there are many ways to differentiate the product or service and many buyers perceive these differences as having value. - buyers are susceptible to clever advertising. - most buyers have the same needs and use the product in the same ways.
there are many ways to differentiate the product or service and many buyers perceive these differences as having value.
A company's competitive strategy deals with - its efforts to change its position on the industry's strategic group map. - what its strategy will be in such functional areas as R&D, production, sales and marketing, distribution, finance and accounting, and so on. - its plans for entering into strategic alliances, utilizing mergers or acquisitions to strengthen its market position, outsourcing some in-house activities to outside specialists, and integrating forward or backward. - its plans for overcoming the five competitive forces. - management's game plan for competing successfully—the specific efforts to please customers, offensive and defensive moves to counter the maneuvers of rivals, the responses to current market conditions, and the initiatives undertaken to improve the company's market position.
management's game plan for competing successfully—the specific efforts to please customers, offensive and defensive moves to counter the maneuvers of rivals, the responses to current market conditions, and the initiatives undertaken to improve the company's market position.
A differentiation-based competitive advantage - often hinges on incorporating features that (1) raise the performance of the product or (2) lower the buyer's overall costs of using the company's product or (3) enhance buyer satisfaction in intangible or non-economic ways or delivering value to customers on by differentiating on the basis of competencies and capabilities that rivals can't match. - hinges on a company's success in developing top-of-the-line product features that will command the biggest price premium in the industry. - requires developing at least one distinctive competence that buyers consider valuable. - most usually is the result of highly effective marketing and advertising. - nearly always is attached to the quality and service aspects of a company's product offering.
often hinges on incorporating features that (1) raise the performance of the product or (2) lower the buyer's overall costs of using the company's product or (3) enhance buyer satisfaction in intangible or non-economic ways or delivering value to customers on by differentiating on the basis of competencies and capabilities that rivals can't match.
For a best-cost provider strategy to be successful, a company must have - excellent marketing and sales skills in convincing buyers to pay a premium price for the attributes/features incorporated in its product. - access to greater learning/experience curve effects and scale economies than rivals. - one of the best-known and most respected brand names in the industry. - resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes. - a short, low-cost value chain.
resource strengths and competitive capabilities that allow it to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes.
A company's strategic options for remedying cost disadvantages in internally performed value chain activities do not include - outsourcing the performance of high-cost activities to vendors that can perform them more cheaply. - investing in productivity-enhancing, cost-saving technological improvements. - implementing the use of best practices, particularly for high-cost activities. - revamping its value chain to eliminate or bypass some cost-producing activities (particularly low value-added activities). - switching to activity-based costing.
switching to activity-based costing.
A company's value chain identifies - the steps it goes through to convert its net income into value for shareholders. - the competencies and competitive capabilities that underpin its efforts to create value for customers and shareholders. - the primary activities it performs in creating value for its customers and the related support activities. - the activities it performs in transforming its competencies into distinctive competencies. - the series of steps it takes to get a product from the raw materials stage into the hands of end-users.
the primary activities it performs in creating value for its customers and the related support activities.
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 - to be the first mover. - to be the last-mover—playing catch-up is usually fairly easily and nearly always much cheaper than any other option. - 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). - to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly. - to be a fast follower.
to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.
The keys to sustaining a broad differentiation strategy are - to stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features. - to emphasize personalized customer service and to add as many differentiating features as possible. - to charge a premium price that more than covers the extra costs of differentiating features and to convince customers to be brand loyal. - to out-innovate and out-advertise rivals. - to keep prices close to the average of all rivals and to spend heavily on new product R&D.
to stress constant innovation to stay ahead of imitative rivals and to concentrate on a few differentiating features.
The marketing emphasis of a company pursuing a broad differentiation strategy usually is to - communicate the product's ability to serve the customer's every need. - tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features. - emphasize selling direct to end-users and promoting personalized customer service. - underprice rival brands with comparable features. - out-advertise rivals and make frequent use of discount coupons.
tout differentiating features and charge a premium price that more than covers the extra costs of differentiating features.