Chapter 4
Which of the following are potential market opportunities that managers try to identify when tailoring strategy to a company's situation?
Acquiring rival companies with attractive capabilities Expansion into new geographic markets Serving additional customer groups or market segments
How can a company improve cost competitiveness on the distribution side of its value chain?
By changing to a more cost-effective distribution strategy By encouraging forward channel allies to reduce their costs and markups By collaborating with distributors to find win-win cost reduction strategies
How can a company use its supplier relationships to bolster its customer value proposition?
By choosing suppliers that have higher standards By offering suppliers quality-based incentives By integrating suppliers into the design process
How can a company enhance differentiation at the forward end of the value chain system
By participating in cooperative advertising By offering incentives to downstream partners to enhance customer value By setting standards and train channel partners to implement them
How can managers improve a firm's customer value proposition and enhance differentiation?
By reallocating resources By introducing new technologies By adopting best practices
Which of the following accurately reflect the relationship between a company's activities and its resources and capabilities?
Continuous investment of resources in value chain activities leads to the creation of a competence. Prioritizing a competitive capability transforms it into a core competence. Value-creating activities contribute to the formation and development of capabilities.
The clothing retailer Patagonia remains competitive with a customer value proposition that focuses on which of the following?
Corporate environmental responsibility High quality
Detailed examination of a company's value chain, including its customer value proposition and business model, allows for evaluation of which of the following?
Cost structure and pricing Capabilities that enhance differentiation Profit margin
To appraise a company's strengths, managers determine how well the firm performs key aspects of the business, including which of the following?
Customer service Supply chain management Sales and marketing
What business practice is the most important factor that allows a company to seize the moment when a golden marketing opportunity presents itself?
Diligent market reconnaissance
Most of a firm's organizational capabilities can be characterized as being either of which two of the following?
Existing in a firm's processes and systems Being based on knowledge
A value chain system is defined as a company's own value chain combined with those of its suppliers but not those of its wholesale distributors, who deal with finished products.
False
What would likely be part of the value chain for a service-based business, such as a packaging-design firm?
Hiring creative talent Brainstorming new ideas Delivering artwork to clients
What can be learned through value chain analysis?
How each activity of a rival delivers value to customers The competitive differences among rivals The differences in how competitors perform specific activities
Which of the following are considered internal weaknesses of a company?
Inferior capabilities Deficiencies in intangible assets Unproven skills
Which company resources and capabilities reflect a high level of social complexity?
Internal company culture Interpersonal relationships between managers Trust-based relations with customers
Which of the following are characteristics of a company's core competence?
It is competitively valuable. It contributes to the company's profitability. It is central to a company's strategy.
Which of the following are benefits of employing a third party to provide benchmarking data?
It maintains anonymity. It helps avoid ethical issues.
In addition to human resources, which of the following are a company's intangible assets?
Its brands Its reputation Its image
A company can examine its value chain to analyze which of the following?
Its cost structure Its business model Its customer value proposition
As a type of company resource, relationships include which of the following?
Joint ventures Partnerships Dealer networks
Which of the following types of market opportunities are the most relevant for a company to pursue?
Market opportunities that match up with the company's competitive assets Market opportunities that offer the best chances for profitability Market opportunities that offer the best chances for growth
Which of the following are key components of a company's competitive strategy?
Marketing Information technology Human resources
Information gleaned from a SWOT analysis can be used to create strategic actions that include which of the following?
Matching the company's strategy to its internal strengths Correcting significant weaknesses Defending against external threats
Which statements about a company's capabilities are true?
One method of identifying capabilities starts with a survey of the functions performed within the company. One method of identifying capabilities starts with a list of the company's resources.
A company's tangible resources, typically defined as resources that can be easily quantified, include which of the following?
Organizational resources Financial resources Technological resources
Which activities make up the primary value chain in the pulp and paper industry?
Papermaking Timber farming Logging
The value of performing a detailed competitive strength assessment is that it allows a company to do which of the following?
Pinpoint competitors' relative weaknesses Address vulnerabilities Plan offensive and defensive strategies
Which of the following are criteria of VRIN tests for evaluating the competitive advantage of a resource or capability?
Rarity Inimitability
A competitive strength assessment would most likely use information obtained through which of the following?
Resource and capability analysis SWOT analysis Benchmarking
A company's competitive assets are made up of which of the following?
Resources Capabilities
The value chains of a company's distribution-channel partners are significant because they directly affect which of the following?
Sales volumes Customer satisfaction Retail prices
What qualities help create differentiation based on quality, which improves a company's competitive advantage?
Status Image Design Innovation
Changes in what factors contribute to the erosion of a company's competitive advantage over time?
Technology Distribution channels Customer preferences
Which of the following are factors that help indicate the success of a company's business strategy?
The company's stock price The rate of customer retention Sales and earnings growth
To solidify a company's future financial and competitive success, managers can examine the results of broad industry analysis and internal company evaluations. What will this will help them understand?
The company's strategic and competitive challenges What problems require their foremost attention Which of the company's competitive shortcomings need addressing
Which of the following are external factors that pose threats to a company's profitability and competitive well-being?
The emergence of lower cost or improved technologies Unfavorable demographic shifts Burdensome new regulations
The value chain of a company's suppliers is significant for which of the following reasons?
The quality of goods supplied affects the purchasing company's differentiation capabilities. Suppliers' activities and costs directly affect a company's own value chain activities. A supplier's value chain costs correlate with a company's own competitiveness.
What are characteristics of resources that are both valuable and rare?
They are true strategic assets. They are competitively superior.
Which of the following are true of a company's core competencies?
They can be leveraged to create new product demand. They can be leveraged to create new markets.
Which of the following are profitability ratios that help determine a company's financial performance?
Total return on assets Net profit margin Net return on total assets
What technique is most useful for helping a company analyze how its competitors deliver products or services that their customers want at an attractive price? Multiple choice question.
Value chain analysis
What analytic tools are helpful in evaluating the competitiveness of a company's costs and customer value proposition?
Value chain analysis Benchmarking
Which statements about gathering company benchmarking information are true?
Visiting the facilities of noncompeting companies is one way of gathering benchmarking information. Comparing the costs of two companies can be misleading if the companies use different cost accounting principles. Some benchmarking information can be obtained from published reports by trade groups and industry research firms.
Which of the following are things that management must do to maintain the value of the company's resources and capabilities?
Watch for the chance to develop new capabilities Continually modify existing assets
When are resources and capabilities difficult for competitors to replicate?
When they are unique When they take time to build up When they require large-scale operations
Which of the following issues might be included in a manager's priority list of problems?
Whether to acquire a rival company How to deal when rivals reduce prices How to respond to foreign competitors
There are times, such as during the financial crisis of 2008-2009, when adverse market conditions can create ______ that plunges a company into crisis and put its future in jeopardy.
a sudden-death threat
When a company is able to maintain its competitive edge despite competitors' efforts to overcome it, the company is said to have achieved ______.
a sustainable competitive advantage
Of the four tests of a resource's competitive power, the most difficult is ______.
assessing the availability of substitutes
The process of comparing the performance of numerous value chain activities across multiple types of companies to assess the costs and effectiveness of these activities is called
benchmarking
The ability of a company to perform competently in carrying out a particular internal activity, such as product innovation or development, is called a ______.
capability
When a company's proficiency rises from that of mere ability to perform an activity to the point of being able to perform it consistently well and at acceptable cost, it is said to have a(n)
competence
To evaluate a firm's ______ power, it is necessary to identify the firm's capabilities and resources and then determine their quality.
competitive
Capabilities that utilize various resources and result from collaboration across multiple departments, such as R&D, marketing, sales, and manufacturing, are known as ______ capabilities.
cross-functional
When a company offers unusually low prices for high-quality products, its business model is based on having a competitive ______.
customer value proposition
If a company's competence level in some activity domain is superior to that of its rivals, it is known as a
distinctive competence
A company's ongoing ability to adapt and renew its competitive assets, capabilities, and resources is referred to as a ______ capability.
dynamic
When a company continually recalibrates and upgrades its equipment and other resources, the firm has a competitive advantage called ______ capability. Multiple choice question.
dynamic
Access to widely available resources and capabilities is one source of a firm's competitive advantage.
false
Although it is an important way for a company to evaluate its business practices relative to other firms, the greatest barrier to benchmarking is ______ the necessary information.
gaining access to
A company's sales revenues minus the cost of goods sold divided by the sales revenues is called the company's ______ margin.
gross profit
Debt-to-equity, long-term debt-to-capital, and total debt-to-assets are all examples of ______ ratios.
leverage
For managers to guide a company's strategy successfully, they must first identify its ______.
market opportunities
A competitive asset owned or controlled by a company is referred to as a(n) ______.
resource
Closely integrated competitive assets that are tied to one or more cross-functional capabilities are called
resource bundles
A two-step process that provides managers with a powerful tool for sizing up a company's competitive assets and determining whether they can provide the foundation necessary for competitive success in the marketplace is known as
resource or capability analysis
Patents and copyrights are types of resources that are part of a company's ______.
technological resources
A company's strategy should always be based on ______.
the company's internal strengths
The operating income of a company divided by its interest expenses is called the ______ ratio.
times-interest-earned
An activity that a company performs poorly in comparison to its competitors is an example of a competitive deficiency, or
weakness
