Exam 1 Corporate & Business Strategy

A good strategy consists of three elements. The second element is accomplished through strategy formulation, resulting in the firm's functional, business-level, and corporate-level strategies. This is also called _____.

a guiding policy to address the competitive challenge

A firm has a 10% return on invested capital while the industry average return on invested capital is 18%, the firm has a(n) _____.

competitive disadvantage

In the external analysis phase of the AFI strategy framework, what should managers ask?

"How do external forces affect our strategy and competitive advantage?"

Which of the following are elements of a good strategy according to the AFI framework?

- A set of coherent actions to implement the firm's guiding policy - A diagnosis of the competitive challenge - A guiding policy to address the competitive challenge

Which of the following elements comprise strategic management?

- Analysis - Implementation - Formulation

Which of the following are primary strategy objectives?

- Controlling costs - Creating value

Which of the following topics should be considered during the analysis phase of the AFI framework?

- the firm's business model and competitive advantages - the role of strategic leadership and the strategy process -the firm's internal strengths and resources -the external environment and associated challenges

Walmart and Nordstrom maintain very different strategic profiles, one based on cost-leadership and the other based on differentiation through superior customer service. This is an example of _____.

- what not to do - what to do

Burger Bomb has been outperforming other burger restaurant in recent years. This indicates that Burger Bomb has which of the following?

A competitive advantage

When a firm implements a strategy that leads to superior performance relative to other companies in the same industry, it is said to have achieved ______.

A competitive advantage

Which statement about strategies is true?

A statement of desire on its own often leads to goal conflict

What is the first step in the AFI strategy framework?

Analysis

What is the best definition of the Red Queen effect?

Companies copy each other but do not change strategic positions

The high market valuation achieved by Tesla by 2019 can be largely attributed to its Blank______.

Implementation of its secret strategy

Which of the following statements is true about Tesla, the manufacturer of all-electric cars?

It has a high market valuation

What is the best definition of a cost leadership strategy?

Offering similar goods and services at a lower price

What is the field of management that focuses on attaining competitive advantage by combining analysis, formulation, and implementation?

Strategic Management

Andrew's Home Center has created a unique situation for itself in its industry that allows the company to not only provide excellent value to its customers but also control its costs. This is known as ______.

Strategic positioning

What is strategy?

The set of actions a firm takes to achieve a competitive advantage

Which of the following statements regarding tasks in the AFI strategy framework is true?

The tasks are very interdependent

A firm's overall efforts to gain and sustain competitive advantage is referred to as which of the following?

a competitive strategy

Based on its long dominance as a coffeehouse chain, Starbucks has ___.

a sustainable competitive advantage

Firms should identify a ______ so that employees can determine if they are making progress in addressing it.

clear competitive challenge

When a firm works to gain a competitive advantage by providing better goods and services than its rivals, it is employing a ______ strategy.

differentiation

A competitive advantage ____.

is assessed relative to other competitors in the industry

The question "How do we implement the formulated strategy through an organizational structure, culture, and control system that values and encourages ethical behavior?" would most likely be examined by managers in the ____ phase of the AFI strategy framework.

operational

In the ____of the strategy implementation phase of the AFI strategy framework, managers would examine how the firm should be structured in order to implement the desired strategy.

organization design

Why should a firm define a clear competitive challenge?

so that employees can assess their progress toward addressing it

In order to determine if Home Depot has a competitive advantage, we must compare Home Depot's performance to ___.

the performance of other firms in its industry

Managers often have to make decisions between two conflicting strategic options, otherwise known as ____.

trade-offs

When does a situation of competitive parity exist?

two or more firms achieve the same performance results.