SM Test 2

C) that pieces of strategically relevant activities and capabilities often end up scattered across many

. One of the big weaknesses of traditional functional organization structures is A) making it hard to effectively empower employees. B) making it difficult to have closely related activities report to a single executive. C) that pieces of strategically relevant activities and capabilities often end up scattered across many departments—remedying this deficiency often entails reengineering the work effort and pulling the people who performed the pieces in functional departments into a group that works together to perform the whole process, thus creating process departments. D) impeding the use of outsourcing. E) making it hard to fix managerial accountability for poor results.

B) the markets in various countries are part of the world market and competitive conditions across country

In global competition A) the leading companies compete for having the biggest share of the world market, but only occasionally compete head-to-head in different countries. B) the markets in various countries are part of the world market and competitive conditions across country markets are strongly linked. C) a company's overall market strength is the sum of its market shares in each country market where it has a presence. D) the industry leaders are foreign companies; domestic companies are relegated to runner-up status. E) a firm's overall competitive advantage is determined by the size of the competitive advantage it has in each of its profit sanctuaries.

C) in helping establish a new beachhead of opportunity than in achieving and sustaining global market

Strategic alliances between domestic and foreign firms are more effective A) in building multiple profit sanctuaries than in forging a mutually supportive global strategy. B) in reducing supply chain costs than in reducing distribution costs. C) in helping establish a new beachhead of opportunity than in achieving and sustaining global market leadership D) in helping the partners pursue a multicountry strategy as compared to a global strategy. E) in helping the partners pursue a global strategy as compared to a multicountry strategy.

B) an international competitor competes in a select few foreign markets (and perhaps has only modest ambitions to enter additional country markets) while a global competitor has or is pursuing a market presence on most continents and is expanding its operations into additional country markets annually.

The difference between a company that competes "internationally" and a company that competes "globally" is that A) a global competitor operates in "many" country markets and an international competitor operates in just a "few" country markets. B) an international competitor competes in a select few foreign markets (and perhaps has only modest ambitions to enter additional country markets) while a global competitor has or is pursuing a market presence on most continents and is expanding its operations into additional country markets annually. C) an international competitor has a market presence in countries on one continent and a global competitor has a market presence in countries on most all of the world's continents. D) an international competitor has a market presence in a few of the biggest country markets in the world and a global competitor has a market presence in most all of the major country markets of the world. E) an international competitor has an international strategy and a global competitor has a global strategy.

A) a good way for companies to develop broader or deeper competencies and competitive capabilities that

Transferring core competencies and resource strengths from one country market to another is A) a good way for companies to develop broader or deeper competencies and competitive capabilities that can become a strong basis for sustainable competitive advantage. B) best accomplished with a multicountry strategy as opposed to a global strategy. C) feasible only with a global strategy; it can't be done with a multicountry strategy. D) unlikely to result in a competitive advantage. E) nearly always the easiest and most sure-fire way to build competitive advantage in trying to compete successfully in foreign markets.

E) All of the above.

A "think global, act global" approach to crafting a global strategy involves A) pursuing the same basic competitive strategy theme (low-cost, differentiation, best-cost, focused) in all countries where the firm does business. B) selling much the same products under the same brand names everywhere and expanding into most, if not all, nations where there is significant buyer demand. C) integrating and coordinating the company's strategic moves worldwide. D) utilizing the same competitive capabilities, distribution channels, and marketing approaches worldwide. E) All of the above.

B) country-to-country differences are small enough to be accommodated with the framework of a mostly

A "think global, act global" approach to strategy-making is preferable to a "think local, act local" approach when A) a big majority of the company's rivals are pursuing localized multicountry strategies. B) country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy. C) plants need to be scattered across many countries to avoid high shipping costs. D) market growth rates vary considerably from country to country. E) host governments enact regulations requiring that products sold locally meet strict manufacturing specifications or performance standards.

E) All of the above.

A "think local, act local" multicountry strategy works particularly well when A) host governments enact regulations requiring that products sold locally meet strictly-defined manufacturing specifications or performance standards. B) there are significant country-to-country differences in customer preferences and buying habits. C) diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country-to-country. D) there are significant country-to-country differences in distribution channels and marketing methods. E) All of the above.

C) becomes more appealing the bigger the country-to-country differences in buyer tastes, cultural

A "think local, act local" multicountry type of strategy A) is very risky, given fluctuating exchange rates and the propensity of foreign governments to impose tariffs on imported goods. B) is usually defeated by a "think global, act global" type of strategy. C) becomes more appealing the bigger the country-to-country differences in buyer tastes, cultural traditions, and market conditions. D) is generally an inferior strategy when one or more foreign competitors is pursuing a global low-cost strategy. E) can defeat a global strategy if the "think local, act local" multicountry strategist concentrates its efforts exclusively in those foreign markets which have superior resources.

B) giving local managers considerable strategy-making latitude and often producing different product

A "think-local, act local" multicountry strategy entails A) a narrow product line aimed at serving buyers in the same segments of country markets worldwide. B) giving local managers considerable strategy-making latitude and often producing different product versions for different countries. C) aggressive efforts to locate facilities in those country markets which have superior resources. D) pursuing strong product differentiation and competing in many buyer segments. E) extensive efforts to transfer a company's competencies and resource strengths from one country to another so as to keep entry costs into new country markets low.

C) becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar.

A European manufacturer that exports goods made at its European plants to the United States A) is competitively disadvantaged when the euro declines in value against the U.S. dollar. B) is largely unaffected by fluctuating exchange rates between the euro and the U.S. dollar; it would, however, be affected if its plants were in the U.S. C) becomes more competitive in the U.S. market when the euro declines in value against the U.S. dollar. D) becomes more competitive in European markets when the euro declines in value against the U.S. dollar. E) has no interest in whether the euro grows stronger or weaker versus the U.S. dollar unless its chief competitors are other companies located in countries whose currency is also the euro.

C) becomes less competitive in foreign markets when the Brazilian real gains in value against the

A European-based company that makes all of its goods at a plant in Brazil and then exports the Brazilian- made goods to country markets in many different parts of the world A) is competitively disadvantaged when the euro declines in value against the Brazilian real. B) is competitively disadvantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C) becomes less competitive in foreign markets when the Brazilian real gains in value against the currencies of the countries to which the Brazilian-made goods are being exported. D) is competitively advantaged when the euro appreciates in value against the Brazilian real. E) has no interest in whether the euro grows stronger or weaker versus the Brazilian real unless its chief competitors are other companies located in countries whose currency is also the euro.

B) is competitively advantaged when the Brazilian real declines in value against the currencies of the

A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to country markets across the world A) is competitively disadvantaged when the U.S. dollar declines in value against the Brazilian real. B) is competitively advantaged when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. C) becomes less competitive in foreign markets when the Brazilian real declines in value against the currencies of the countries to which the Brazilian-made goods are being exported. D) is competitively advantaged when the U.S. dollar appreciates in value against the Brazilian real. E) is unaffected by changes in the valuation of foreign currencies against the Brazilian real—all that matters to a U.S. company is the valuation of the U.S. dollar against the Brazilian real.

D) becomes more competitive in foreign markets when the U.S. dollar declines in value against the

A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets A) is competitively disadvantaged when the U.S. dollar declines in value against the currencies of the countries to which it is exporting. B) is largely unaffected by fluctuating exchange rates; it would, however, be affected if its plants were in foreign countries. C) becomes more competitive in foreign markets when the U.S. dollar gains in value against the currencies of the countries to which it is exporting. D) becomes more competitive in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting. E) has no interest in whether the dollar grows stronger or weaker versus foreign currencies unless it is competing only against companies located in foreign countries.

E) it sells its products in 50 to 100 or more countries and is expanding its operations into additional

A company is said to be a global competitor when A) it competes in a majority of the world's different country markets. B) it employs a global strategy. C) it has long range strategic intentions to compete in as many as 50 country markets. D) it competes in 15 or more country markets. E) it sells its products in 50 to 100 or more countries and is expanding its operations into additional country markets annually.

C) it competes in a select few foreign markets and perhaps has only modest ambitions to enter additional

A company is said to be an international competitor when A) it competes in a majority of the world's different country markets. B) it has operations on all of the world's major continents. C) it competes in a select few foreign markets and perhaps has only modest ambitions to enter additional country markets. D) it employs an international strategy and competes in 50 or fewer country markets. E) it has 2 or more profit sanctuaries.

C) identifying an attractive industry whose value chain has good strategic fit with one or more of the

A company pursuing a related diversification strategy would likely address the issue of what additional industries/businesses to diversify into by A) locating businesses with well-known brand names and large market shares. B) identifying industries with the least competitive intensity. C) identifying an attractive industry whose value chain has good strategic fit with one or more of the firm's present businesses. D) identifying businesses with the potential to diversify the number and types of different activities in the firm's value chain make-up. E) locating new businesses with high degrees of financial fit with its present businesses.

E) All of the above.

A comprehensive evaluation of the group of businesses a company has diversified into involves A) evaluating the attractiveness of industries the company has diversified into and the competitive strength of each of its business units. B) evaluating the strategic fits and resource fits among the various sister businesses. C) ranking the performance prospects of the businesses from best to worst and determining what the corporate parent's priorities should be in allocating resources to its various businesses. D) using the results of the prior analytical steps as a basis for crafting new strategic moves to improve the company's overall performance. E) All of the above.

A) decision-making authority should be put in the hands of the people closest to and most familiar with

A decentralized organizational structure is predicated on a belief that A) decision-making authority should be put in the hands of the people closest to and most familiar with the situation, and these people should be trained to exercise good judgment. B) a command-and-control organizational scheme is the lowest cost way to organize the work effort. C) top executives oftentimes lack the expertise and wisdom to decide what is the wisest and best course of action. D) the best decisions emerge from a collegial, collaborative culture where decisions are made by general consensus (at least a majority vote) on what to do and when. E) organizing into work teams, having team members elect a team leader, and having team members vote on the best way to do things greatly reduces corporate bureaucracy.

C) decision-making authority should be pushed down to the lowest organizational level capable of making

A decentralized organizational structure is predicated on a belief that A) top executives should establish a collegial, collaborative culture where decisions are made by general consensus on what to do and when. B) strict enforcement of detailed procedures backed by rigorous managerial oversight is necessary because company personnel cannot be counted on act wisely or keep costs to a bare bones level. C) decision-making authority should be pushed down to the lowest organizational level capable of making timely, informed, competent decisions. D) most company personnel have neither the time nor the inclination to direct and properly control they work they are performing and that they lack the knowledge and judgment to make wise decisions about how best to do their work. E) lower-level managers and employees should go up the ladder of command for approval on most all strategic and operating issues of much importance.

A) transfer its valuable competencies and resource strengths among these markets to aid in the development

A key approach for a company to grow sales and profits in several country markets is to A) transfer its valuable competencies and resource strengths among these markets to aid in the development of broader competencies and capabilities. B) employ a multicountry strategy rather than a global strategy. C) locate technical after-sale services close to buyers. D) minimize transportation costs among these markets. E) take advantage of less restrictive restrictions and requirements of host governments.

A) appointing "relationship managers" and giving them responsibility for making particular strategic

Building organizational bridges with external allies is aided by A) appointing "relationship managers" and giving them responsibility for making particular strategic partnerships or alliances generate the intended benefits. B) agreeing with allies to meet frequently and make all decisions pertaining to the alliance on the basis of mutual agreement and consensus. C) getting each strategic ally to agree to appoint someone as head of the collaborative effort and to give that person the authority to enforce tight coordination of joint activities. D) forming a 50-50 joint venture with each strategic partner and then assigning people to the joint venture who have the authority and responsibility to enforce tight coordination. E) entering into a written agreement detailing the roles and responsibilities of the company and the ally/partner, setting forth the results that are expected, establishing deadlines for achieving these results, and designating the people who are to be responsible for making the collaborative effort work successfully.

D) their value chains possess competitively valuable cross-business relationships that present opportunities

Businesses are said to be "related" when A) they have several key suppliers and several key customers in common. B) their value chains have the same number of primary activities. C) their products are both sold through retailers. D) their value chains possess competitively valuable cross-business relationships that present opportunities to transfer resources from one business to another, combine similar activities and reduce costs, share use of a well-known brand name, and/or create mutually useful resource strengths and capabilities. E) many consumers buy the products/services of both businesses.

A) generally have to consider establishing competitive positions in the markets of emerging countries.

Companies racing for global market leadership A) generally have to consider establishing competitive positions in the markets of emerging countries. B) are well-advised to avoid all the risks and problems of competing in emerging country markets. C) seldom have the resource capabilities it takes to be effective in competing in emerging country markets and usually are at a strong competitive disadvantage to the domestic market leaders. D) can usually be expected to earn sizable profits quickly in emerging country markets. E) usually encounter very low barriers in entering the markets of emerging countries.

E) All of these.

Competing in the markets of foreign countries entails dealing with such factors as A) fluctuating exchange rates, country-to-country variations in host government restrictions and requirements, and country-to-country variations in cultural, demographic, and market conditions. B) important country-to-country differences in consumer buying habits and buyer tastes and preferences. C) whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide. D) the fact that product designs suitable for one country are sometimes inappropriate in another. E) All of these.

E) Crafting a multicountry strategy that works just as well in one country as in another and that also has

Competing in the markets of foreign countries generally does not involve which of the following? A) Country-to-country differences in consumer buying habits and buyer tastes and preferences B) Country-to-country variations in host government restrictions and requirements and fluctuating exchange rates C) Whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide D) In which countries to locate company operations for maximum locational advantage, given country-to- country variations in wages rates, worker productivity, energy costs, tax rates, and the like E) Crafting a multicountry strategy that works just as well in one country as in another and that also has the appeal of turning the world market into a mostly homogeneous market

E) anywhere along the respective value chains of related businesses.

Cross-business strategic fits can be found A) in unrelated as well as related businesses and in the markets of foreign countries as well as in domestic markets. B) only in businesses whose products/services satisfy the same general types of buyer needs and preferences. C) mainly in either technology related activities or sales and marketing activities. D) chiefly in the R&D portions of the value chains of unrelated businesses E) anywhere along the respective value chains of related businesses.

A) creates a more horizontal or flatter organization structure with fewer management layers and usually

Delegating greater authority to subordinate managers and employees A) creates a more horizontal or flatter organization structure with fewer management layers and usually acts to shorten organizational response times. B) usually slows down decision-making because so many more people are involved and it takes longer to reach a consensus on what to do and when to do it. C) can be a de-motivating factor because it requires people to take responsibility for their decisions and actions. D) is very, very risky because it usually results in lots of "bad" decisions on the part of employees and lower levels of financial performance. E) enhances greater cross-unit coordination and aids the capture of strategic fit benefits across related businesses.

E) All of these.

Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous when A) buyer-related activities (such as sales, advertising, after-sale service and technical assistance) need to take place close to buyers. B) buyers demand short delivery times and/or high transportation costs make it uneconomical to operate from one or just a few locations. C) it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and adverse political developments. D) there are diseconomies of scale in trying to operate from a single location. E) All of these.

E) All of the above.

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous A) when high transportation costs make it expensive to operate from central locations. B) whenever buyer-related activities are best performed in locations close to buyers. C) if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations. D) when it is desirable to hedge against (1) the risks of fluctuating exchange rates, (2) supply interruptions or (3) adverse political developments. E) All of the above.

B) When a company is only earning a low profit margin in its principal business

Diversification becomes a relevant strategic option in all but which one of the following situations? A) When a company spots opportunities to expand into industries whose technologies and products complement its present business. B) When a company is only earning a low profit margin in its principal business C) When a company has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses. D) When a company can open up new avenues for reducing costs by diversifying into closely related businesses. E) When a company can leverage existing competencies and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.

E) All of these.

Diversification becomes a relevant strategic option when a company A) spots opportunities to expand into industries whose technologies and products complement its present business. B) can leverage existing competencies and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets. C) has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses. D) can open up new avenues for reducing costs by diversifying into closely related businesses. E) All of these.

B) is faced with diminishing market opportunities and stagnating sales in its principal business.

Diversification merits strong consideration whenever a single-business company A) has integrated backward and forward as far as it can. B) is faced with diminishing market opportunities and stagnating sales in its principal business. C) has achieved industry leadership in its main line of business. D) encounters declining profits in its mainstay business. E) faces strong competition and is struggling to earn a good profit.

C) a company begins to encounter diminishing growth prospects in its mainstay business.

Diversification ought to be considered when A) a company's profits are being squeezed and it needs to increase its net profit margins and return on investment. B) a company lacks sustainable competitive advantage in its present business. C) a company begins to encounter diminishing growth prospects in its mainstay business. D) a company has run out of ways to achieve a distinctive competence in its present business. E) a company is under the gun to create a more attractive and cost-efficient value chain.

B) builds shareholder value.

Diversifying into new businesses is justifiable only if it A) results in increased profit margins and bigger total profits. B) builds shareholder value. C) helps a company escape the rigors of competition in its present business. D) leads to the development of a greater variety of distinctive competencies and competitive capabilities. E) helps the company overcome the barriers to entering additional foreign markets.

C) evaluating the strategic fits and resource fits among the various sister businesses and deciding what

Evaluating a diversified company's corporate strategy and critiquing the pluses and minuses of its business lineup involves A) a SWOT analysis of each industry in which the firm has a business interest. B) applying the cost-of-entry test, the better-off test, the profitability test, and the shareholder value test to each business and industry represented in the company's business portfolio. C) evaluating the strategic fits and resource fits among the various sister businesses and deciding what priority to give each of the company's business units in allocating resources. D) looking at each industry/business to determine how many profitable strategic groups that the company has diversified into. E) determining how many of the business units are following focus strategies, differentiation strategies, best-cost provider strategies, and low-cost leadership strategies.

E) All of these.

In a highly centralized organizational structure, A) top executive retain authority for most strategic and operating decisions. B) the thesis is that strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track. C) tight control from the top makes it easy to fix accountability when things do not go well. D) one of the basic tenets is that most company personnel have neither the time nor the inclination to direct and properly control they work they are performing and, further, that they lack the knowledge and judgment to make wise decisions about how best to do their work. E) All of these.

E) All of the above.

In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations when A) there are significant scale economies in performing an activity. B) the costs of manufacturing or other activities are significantly lower in some geographic locations than in others. C) when there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations). D) certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages. E) All of the above.

D) dispersing its activities among various countries in a manner that lowers costs or else helps achieve

In expanding into foreign markets, a company can strive to gain competitive advantage (or offset domestic disadvantages) by A) building a state-of-the-art facility to fully capture scale economies via an export strategy. B) using export, licensing, or franchising strategies so as to minimize risk and capital investment. C) locating buyer-related activities in all countries where it sells its product. D) dispersing its activities among various countries in a manner that lowers costs or else helps achieve greater product differentiation and transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets. E) avoiding the use of strategies that entail coordinating its domestic strategic moves with its strategic moves in the various foreign markets that it enters.

D) using location in a manner that lowers costs or else helps achieve greater product differentiation and

In expanding outside its domestic market, one way a company can strive to gain competitive advantage (or offset domestic disadvantages) is by A) using a differentiation-based competitive strategy in those country markets with superior resources B) deliberately choosing not to compete in countries with high tariffs and high taxes (which then have to be passed along to buyers in the form of higher prices), thus keeping costs and prices lower than rivals. C) using an export strategy to circumvent the risks of adverse exchange rate fluctuations. D) using location in a manner that lowers costs or else helps achieve greater product differentiation and allowing for the transfer of competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets. E) employing a multicountry strategy instead of a global strategy.

B) When a company has competitively superior patented technology that it can license to foreign partners

In which of the following circumstances is it not advantageous for a multinational competitor to concentrate its activities in a limited number of locations in order to build competitive advantage? A) When the costs of performing certain value chain activities are significantly lower in certain geographic locations than in others B) When a company has competitively superior patented technology that it can license to foreign partners C) When there is a steep learning or experience curve associated with performing an activity in a single location D) When certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages E) When there are significant scale economies in performing the activity

A) When a company wished to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide

In which of the following situations is employing a "think local, act local" multicountry strategy highly questionable? A) When a company wished to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwide B) When there are significant country-to-country differences in customer preferences and buying habits industry is characterized by big economies of scale and strong experience curve effects C) When the trade restrictions of host governments are diverse and complicated D) When there are significant country-to-country differences in distribution channels and marketing methods E) When host governments enact regulations requiring that products sold locally meet strictly-defined manufacturing specifications or performance standards

E) there is no international or global market, just a collection of mostly self-contained country markets.

Multi-country competition is best characterized as a situation where A) the competitive arena among rival companies involves several neighboring countries rather than either a single country or the world market as a whole. B) competition is mainly among the domestic companies of a few neighboring countries (five countries at most). C) there are extensive trade restrictions, sharply fluctuating exchange rates, and high tariff barriers in many country markets that work against the formation of a true world market. D) competition among domestic companies predominates and foreign competitors are a minor factor. E) there is no international or global market, just a collection of mostly self-contained country markets.

B) competition in one national market is independent of competition in other national markets and, as a

Multi-country competition refers to situations where A) no domestic companies have king-sized market shares and each national market has many competi- tors. B) competition in one national market is independent of competition in other national markets and, as a consequence, there is strictly speaking no "international or world market." C) domestic rivals pursue focused or market niche strategies and do not compete internationally. D) domestic companies have a competitive disadvantage in competing with foreign rivals that operate in many different countries. E) most competitors operate in more than two country markets but rarely in more than 20.

C) how it can gain competitive advantage based on where it locates its various value chain activities.

One important concern a company has in trying to compete successfully in foreign markets is A) convincing shippers to keep cross-country transportation costs low enough that the company can export its goods to foreign countries cheaply. B) whether it will have to integrate forward into wholesale and/or retail activities in order to gain visibility for its products in foreign countries. C) how it can gain competitive advantage based on where it locates its various value chain activities. D) how to convince local government officials to reduce tariffs on the imports of its goods into their country. E) developing the expertise to avoid the impact of fluctuating exchange rates.

E) the extent to which the advantages of manufacturing goods in a particular country can be wiped out

One of the big risks of competing in foreign markets is A) the extent to which the advantages of exporting goods from a particular country can be wiped out when fluctuating exchange rates result in that country's currency growing much weaker relative to the currencies of the countries to which the goods are being exported. B) whether the economies of foreign countries will continue to grow at double digit rates. C) the fact that some countries have lower wage rates than others. D) the potential for local government officials to reduce tariffs on the imports of its goods into their country. E) the extent to which the advantages of manufacturing goods in a particular country can be wiped out when fluctuating exchange rates result in that country's currency growing stronger relative to the currencies of the countries where the output is being sold.

D) whether to offer a mostly standardized product worldwide or whether to customize the company's offer-

One of the biggest strategic challenges to competing in the international arena include A) how to avoid the risks of shifting exchange rates. B) whether to charge the same price in all country markets. C) how many foreign firms to license to produce and distribute the company's products. D) whether to offer a mostly standardized product worldwide or whether to customize the company's offer- ings in each different country market to more precisely match the tastes and preferences of local buyers. E) whether to pursue a global strategy or an international strategy.

E) All of these

One of the most viable strategic options companies should consider in tailoring their strategy to fit circumstances of emerging country markets include A) Try to change the local market to better match the way the company does business elsewhere B) Be prepared to modify aspects of the company's business model to accommodate local circumstances C) Prepare to compete on the basis of low price D) Stay away from those emerging markets where it is impractical to modify the company's business model to accommodate local circumstances E) All of these

A) diversify into new industries that present opportunities to transfer competitively valuable expertise,

One strategic fit-based approach to related diversification would be to A) diversify into new industries that present opportunities to transfer competitively valuable expertise, technological know-how, or other capabilities from one business to another. B) diversify into those industries where the same kinds of driving forces and competitive forces prevail, thus allowing use of much the same competitive strategy in all of the business a company is in. C) acquire rival firms that have broader product lines so as to give the company access to a wider range of buyer groups. D) acquire companies in forward distribution channels (wholesalers and/or retailers). E) expand into foreign markets where the firm currently does no business.

B) can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outsider suppliers, and short of the resource strengths to be a master of its own destiny.

Outsourcing critics contend that shifting responsibility for performing value-chain activities to outside specialists A) has the disadvantage of raising fixed costs and reducing variable costs and makes it harder to develop distinctive competencies. B) can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outsider suppliers, and short of the resource strengths to be a master of its own destiny. C) results in less organizational flexibility and leads to sometimes exorbitant costs in collaborating with outside suppliers and strategic partners. D) slows down decision-making on key strategic issues because outside suppliers have to be consulted first. E) lowers the morale of company employees, dampens a company's ability to implement best practices, and results in greater bureaucracy and slower decision-making.

E) All of these.

Strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms are a potentially fruitful means for the partners to A) enter additional country markets and compete on a more global scale while still preserving their independence. B) gain better access to scale economies in production and/or marketing. C) fill competitively important gaps in their technical expertise and/or knowledge of local markets. D) share distribution facilities and dealer networks, thus mutually strengthening their access to buyers. E) All of these.

E) All of these.

Strategic fit between two or more businesses exists when one or more activities comprising their respective value chains present opportunities A) to transfer expertise or technology or capabilities from one business to another. B) for cross-business use of a common brand name. C) to lower costs by combining the performance of the related value chain activities of different businesses. D) for cross-business collaboration to build valuable new resource strengths and competitive capabilities. E) All of these.

D) are weakened when that country's currency grows stronger relative to the currencies of the countries

The advantages of manufacturing goods in a particular country and exporting them to foreign markets A) are largely unaffected by fluctuating exchange rates. B) are greatest when local distributors and dealers in that country can be convinced not to carry products that are made outside the country's borders. C) can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold. D) are weakened when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E) are seriously compromised by the potential for local government officials to raise tariffs on the imports of foreign-made goods into their country.

A) having franchisees bear most of the costs and risks of establishing foreign locations and requiring the

The advantages of using a franchising strategy to pursue opportunities in foreign markets include A) having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchiser to expend only the resources to recruit, train, and support foreign franchisees. B) being particularly well suited to the global expansion efforts of companies with multicountry strategies. C) allowing a company to achieve scale economies. D) being well suited to companies who employ cross-border transfer strategies. E) being well suited to the global expansion efforts of manufacturers.

D) being able to leverage the company's technical know-how or patents without committing significant additional resources to markets that are unfamiliar, politically volatile, economically uncertain, or otherwise risky.

The advantages of using a licensing strategy to participate in foreign markets include A) being especially well suited to achieve scale economies. B) being able to charge lower prices than rivals. C) enabling a company to achieve first-mover advantages quickly and easily. D) being able to leverage the company's technical know-how or patents without committing significant additional resources to markets that are unfamiliar, politically volatile, economically uncertain, or otherwise risky. E) being able to achieve higher product quality and better product performance than with an export strategy.

B) minimizing risk and capital requirements.

The advantages of using an export strategy to build a customer base in foreign markets include A) being able to minimize shipping costs, avoid tariffs, and curb the effects of fluctuating exchange rates. B) minimizing risk and capital requirements. C) being cheaper and more cost effective than licensing and franchising. D) being cheaper and more cost effective than a multicountry strategy. E) being more suited to accommodating local buyer tastes and host government regulations than a global strategy.

C) pursuing the same basic competitive strategy theme (low-cost, differentiation, best-cost, focused) in

The approach of a firm using a "think global, act local" version of a global strategy entails A) producing and marketing a variety of product versions under the same brand name, with each different version being designed specifically to accommodate the needs and preferences of buyers in a particular country. B) little or no strategy coordination across countries. C) pursuing the same basic competitive strategy theme (low-cost, differentiation, best-cost, focused) in all countries where the firm does business but giving local managers some latitude to adjust product attributes to better satisfy local buyers and to adjust production, distribution, and marketing to be responsive to local market conditions. D) selling the company's products under a wide variety of brand names (often one brand for each country or group of neighboring countries) so that buyers in each country market will think they are buying a locally-made brand. E) selling numerous product versions (each customized to buyer tastes in one or more countries and sometimes branded for each country) but opting to only sell direct to buyers at the company's Web site so as to bypass the costs of establishing networks of wholesale/retail dealers in each country market.

C) utilizing keen understanding of local customer needs and preferences to create customized products

The basic strategy options for local companies in competing against global challengers include A) best-cost provider, focused low cost, and low-cost leadership strategies. B) export strategies, licensing strategies, and cross-border transfer strategies. C) utilizing keen understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals D) franchising strategies, multicountry strategies keyed to product superiority, global low-cost leadership strategies, and cross-border coordination strategies. E) focused differentiation and broad differentiation strategies.

E) anywhere along the respective value chains of related businesses—no one place is best.

The best place to look for cross-business strategic fits is A) in R&D and technology activities. B) in supply chain activities. C) in sales and marketing activities. D) in production and distribution activities. E) anywhere along the respective value chains of related businesses—no one place is best.

D) using understanding of local customer preferences to create customized products or services, transferring

The best strategy options for a local company in competing against global challengers include A) locating buyer related activities, such as sales, advertising, or technical assistance, close to buyers. B) export strategies, entering into alliances and/or joint ventures with one or more foreign companies having globally competitive strengths, and/or cross-border transfer strategies. C) export strategies, licensing strategies, franchising strategies, and cross-market coordination strategies. D) using understanding of local customer preferences to create customized products or services, transferring the company's expertise to cross-border markets, and/or using acquisitions and rapid growth strategies to defend against expansion-minded multinationals E) offensives aimed at the global challengers' strengths, promoting anti-dumping legislation, and/or launching some type of guerilla warfare strategy.

A) a market situation where competitive conditions across national markets are linked strongly enough

The characteristics of a world market where global competition prevails include A) a market situation where competitive conditions across national markets are linked strongly enough to form a true world market and where leading competitors typically compete head to head in many different countries. B) minor cost variations from country-to-country (as concerns production, distribution, sales and marketing, and other primary components of the industry value chain) and minimal cross-country trade restrictions. C) a competitive environment comprised of so many competitors that no company has a sizable worldwide market share. D) many companies racing for global market leadership, with most contenders using the same basic type of competitive strategy and positioned in the same strategic group. E) low barriers to entry, such a large number of rivals that the actions of any one rival have little impact on the sales and market shares of other rivals, and key success factors that vary from country to country.

A) reducing the layers of management and encouraging lower-level managers and rank-and-file employees

The chief advantages of a decentralized organizational structure include A) reducing the layers of management and encouraging lower-level managers and rank-and-file employees to exercise initiative and act responsibly. B) making it easy to fix accountability when company performance targets are not met. C) higher productivity on the part of the work force and greater ability to become an industry low-cost leader. D) enhancing cross-unit coordination and capture of strategic fits. E) the emergence of a collegial, collaborative culture where teamwork is a core value and decisions are made on the basis of consensus.

D) putting the organization at risk if many "bad" decisions are made at lower levels in the organization—

The chief disadvantages of a decentralized organizational structure include A) increasing the size of the corporate bureaucracy. B) slowing a company's response times to changing external events because approval of what course of action to take has to go up the chain of command to the top of the management bureaucracy. C) discouraging lower-level managers and rank-and-file employees from exercising initiative, engaging in creative thinking, and taking responsibility for their actions. D) putting the organization at risk if many "bad" decisions are made at lower levels in the organization— top management lacks "full control." E) creating more layers of management.

B) have closely related activities report to a single executive who has the authority and organizational

The classic way to coordinate the work efforts of internal organization units is to A) establish a corporate culture where teamwork is a core value and decisions are made by general consensus among team leaders in the affected work units. B) have closely related activities report to a single executive who has the authority and organizational clout to coordinate, integrate, and arrange for the cooperation of units under their supervision. C) have the heads of support activities report to the heads of primary, strategy-critical activities. D) establish monetary incentives that reward people for being cooperative team players. E) have frequent meetings among the heads of closely related activities and work units to establish mutually agreeable deadlines.

E) All of these.

The competitive advantage opportunities that a global competitor can gain by dispersing performance of its activities across many nations include A) being able to shift production from one country to another to take advantage of exchange rate fluctuations, differing wage rates, differing energy costs, or differing trade restrictions. B) being in better position to choose where and how to challenge rivals. C) shortening delivery times to customers by having geographically scattered distribution facilities. D) locating buyer-related activities (such as sales, advertising, after-sale service and technical assistance) close to buyers. E) All of these.

D) is essentially the same in all country markets where it competes but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better

The competitive strategy of a firm pursuing a "think global, act local" approach to strategy-making A) entails little or no strategy coordination across countries. B) usually involves cross-subsidizing the prices in those markets where there are significant country-to- country differences in the product attributes that customers are most interested in. C) involves selling a mostly standardized product worldwide, but varying a company's use of distribution channels and marketing approaches to accommodate local market conditions. D) is essentially the same in all country markets where it competes but it may nonetheless give local managers room to make minor variations where necessary to better satisfy local buyers and to better match local market conditions. E) involves having strongly differentiated product versions for different countries and selling them under distinctly different brand names (one for each country or group of neighboring countries) so that there will be no doubt in customers' minds that the product is more local than global.

A) lengthens response times because increasing the size of the corporate bureaucracy and discouraging

The disadvantages of a centralized organizational structure include A) lengthens response times because increasing the size of the corporate bureaucracy and discouraging lower-level managers and rank-and-file employees from exercising initiative. B) a loss of top management control. C) putting too much decision making authority in the hands of lower-level company personnel. D) making it hard to fix accountability when things do not go well and putting the organization at risk when bad decisions are made. E) impeding cross-unit coordination and capture of strategic fits.

D) hindering transfer of a company's competencies and resources across country boundaries and hindering

The drawbacks of a localized multicountry strategy include A) hindering the use of cross-border coordination of a company's activities and increasing company vulnerability to adverse shifts in currency exchange rates. B) making it very difficult to take into account significant country-to-country differences in distribution channels and marketing methods. C) making it difficult and costly to be responsive to country-to-country differences in customer needs, buying habits, cultural traditions, and market conditions. D) hindering transfer of a company's competencies and resources across country boundaries and hindering the pursuit of a single, uniform competitive advantage in all country markets where a company operates. E) being unsuitable for competing in the markets of emerging countries and posing added difficulty in modifying a company's business model to compete on the basis of low price.

C) the "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions.

The essential difference between a "think global, act global" and a "think global, act local" approach to strategy-making is that A) a "think global, act global" approach entails extensive strategy coordination across countries and a "think global, act local" approach entails little or no strategy coordination across countries. B) the former aims at implementing the same business model worldwide whereas the latter aims at implementing customized business models to better match local market circumstances. C) the "think global, act local" approach gives local managers more latitude to make minor strategy variations where necessary to better satisfy local buyers and to better match local market conditions. D) a "think global, act global" approach involves selling a mostly standardized product worldwide whereas a "think global, act local" approach entails selling products that are highly differentiated from country to country. E) a "think global, act global" approach involves selling under a single brand name worldwide whereas a "think global, act local" approach entails utilizing multiple brands (typically one for each different country or group of neighboring countries).

A) their value chains possess competitively valuable cross-business relationships.

The essential requirement for different businesses to be "related" is that A) their value chains possess competitively valuable cross-business relationships. B) the products of the different businesses are bought by much the same types of buyers. C) the products of the different businesses are sold in the same types of retail stores. D) the businesses have several key suppliers in common. E) the productions methods that they employ both entail economies of scale.

E) All of the above.

The generic strategic options for competing in foreign markets include A) global low-cost, global differentiation, global best-cost, and global focus strategies. B) maintaining a national (one-country) production base and exporting goods to foreign markets. C) licensing foreign firms to produce and distribute one's products or to use the company's technology. D) a custom-tailored country-by-country approach based on meeting the particular needs of particular buyers in each target country. E) All of the above.

E) All of these.

The organizational characteristics of many of today's companies include A) devoting considerable management attention to building a company capable of outcompeting rivals on the basis of superior resource strengths and competitive capabilities. B) few barriers between people at different vertical ranks, between functions and disciplines, and between units in different geographic locations. C) extensive use of Internet technology and e-commerce business practices. D) extensive collaborative efforts among people in different specialties and different geographic locations. E) All of these.

D) how to exercise control over the actions and decisions of empowered employees so that the business

The organizing challenge of a decentralized structure which stresses employee empowerment is A) how to keep empowered employees from making lots of stupid decisions. B) establishing a collegial, collaborative culture so that decisions can be made by gaining a quick consensus on what to do and when to do it. C) how to avoid de-motivating employees (because empowered employees are expected to take responsibility for their actions and decisions). D) how to exercise control over the actions and decisions of empowered employees so that the business is not put at risk while trying to capture the benefits of empowerment. E) how to convince lower-level managers and employees that they are empowered.

B) can include process departments, traditional functional departments, geographic organizational units, and divisional units performing one or more major processing steps along the value chain (components manufacture, assembly, distribution), and individual businesses (in the case of a diversified

The primary building blocks within a company's organizational structure A) are almost always the departments performing such key administrative support functions as finance, accounting, information technology, human resource management, and R&D. B) can include process departments, traditional functional departments, geographic organizational units, and divisional units performing one or more major processing steps along the value chain (components manufacture, assembly, distribution), and individual businesses (in the case of a diversified company). C) typically consist of an un-empowered employee department, an empowered employee department, teams of front-line supervisors, teams of middle-level managers and administrators, and the group of top-level executives that comprise the company's "executive suite." D) usually consist of supply chain management, components manufacture, assembly, distribution, and administration. E) usually consist of two divisions—a division charged with performing primary value chain activities and a division charged with performing support activities.

E) All of the above.

The procedure for evaluating the pluses and minuses of a diversified company's strategy includes A) assessing the attractiveness of the industries the company has diversified into. B) assessing the competitive strength of each business the company has diversified into to see which ones are the strongest/weakest contenders in their respective industries. C) ranking the performance prospects of the various businesses from best to worst and determining the priorities for resource allocation. D) checking the competitive advantage potential of cross-business strategic fits and also checking whether the firm's resources fit the needs of its present business lineup. E) All of the above.

D) the thesis that if activities crucial to strategic success are to have the resources, decision-making

The rationale for making strategy-critical value chain activities the primary building blocks in a company's organizational scheme is based on A) the much shorter time it takes to build core competencies and competitive capabilities. B) the benefit such an organizational scheme has in reducing costs. C) the benefit such an organizational scheme has in improving the productivity of geographically-scattered organizational units. D) the thesis that if activities crucial to strategic success are to have the resources, decision-making influence, and organizational impact they need, they have to be centerpieces in the organizational scheme. E) the benefit such an organizational scheme has in making the empowerment of employees more effective.

E) All of these.

The reasons why a company opts to expand outside its home market include A) gaining access to new customers for the company's products/services. B) spreading its business risk across a wider market base. C) achieving lower costs and enhancing the company's competitiveness. D) a desire to capitalize on its core competencies and capabilities. E) All of these.

A) it matches a company's competitive approach to prevailing market and competitive conditions in each

The strength of a "think local, act local" multicountry strategy is that A) it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country. B) each of a company's country strategies is almost totally different from and unrelated to its strategies in other countries. C) the plants located in different countries can be operated independent of one another, thus promoting greater achievement of scale economies. D) it avoids host country ownership requirements and import quotas. E) it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

E) All of these.

The task of crafting corporate strategy for a diversified company encompasses A) picking the new industries to enter and deciding on the means of entry. B) initiating actions to boost the combined performance of the businesses the firm has entered. C) pursuing opportunities to leverage cross-business value chain relationships and strategic fits into competitive advantage. D) establishing investment priorities and steering corporate resources into the most attractive business units. E) All of these.

A) the extent to which the firm is broadly or narrowly diversified, whether it is pursuing related or unrelated

To identify a diversified company's strategy, one should consider such factors as A) the extent to which the firm is broadly or narrowly diversified, whether it is pursuing related or unrelated diversification (or a mixture of both), and the recent moves it has made to divest businesses, acquire new businesses, and strengthen the positions of existing businesses. B) whether the company is focusing on "milking its cash cows" or "feeding its cash hogs." C) the technological proficiencies, labor skill requirements, and functional area strategies characterizing each of the firm's businesses. D) each business's competitive approach—whether it is pursuing a low-cost leadership, differentiation, best-cost, focused differentiation, or focused low-cost strategy. E) whether it is emphasizing the pursuit of economies of scale or economies of scope.

B) consider (1) whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations and (2) in which countries to locate particular activities.

To use location to build competitive advantage when competing in both domestic and foreign markets, a company must A) scatter its production plants across many different country markets so as to minimize the costs of shipping to its own distribution centers and/or to wholesalers/retail dealers. B) consider (1) whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations and (2) in which countries to locate particular activities. C) concentrate buyer-related activities in a few well-chosen locations so as to maximize the capture of distribution-related scale economies. D) disperse both production and distribution activities across many nations in order to hedge against fluctuating exchange rates and lessen the risks of adverse political developments. E) avoid selling in countries where there are high trade barriers or where buyers purchase in small quantities.

C) consider (1) whether to concentrate each activity it performs in a few select countries or disperse

To use location to build competitive advantage, a company that operates multinationally or globally must A) employ either an export strategy or a franchising strategy. B) scatter its production plants across many countries in different parts of the world so as to minimize transportation costs. C) consider (1) whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and (2) in which countries to locate particular activities. D) locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs. E) concentrate all of its value chain activities in a single country—the one that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

C) hindering a company's transfer of competencies and resources across country boundaries (since

Two drawbacks of a "think local, act local" multicountry strategy are A) that it is especially vulnerable to fluctuating exchange rates and that it can usually be defeated by companies employing cross-border coordination techniques. B) excessive vulnerability to fluctuating exchange rates and having to craft a separate strategy for each country market in which the company competes. C) hindering a company's transfer of competencies and resources across country boundaries (since somewhat different competencies and capabilities are likely to be employed in different host countries) and not promoting the building of a single, unified competitive advantage in all country markets where a company competes. D) greater exposure to both increases in tariffs and restrictive trade barriers and added difficulty in accommodating the diverse trade restrictions and regulatory requirements of host governments. E) not being able to export products manufactured in one country to markets in other countries and being largely unsuitable for competing in the markets of emerging countries.

A) can be an excellent initial strategy to test the international waters and learn if attractive market positions

Using domestic plants as a production base for exporting goods to selected foreign country markets A) can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets. B) can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country and does not have to compete head-to-head against strong host country competitors. C) can be a powerful strategy since a company can maintain a one-country production base allowing it to capitalize on company competencies and capabilities. D) is usually a weak strategy when competitors are pursuing multi-country strategies. E) can be a powerful strategy because a company is not vulnerable to fluctuating exchange rates.

B) whether to vary the company's competitive approach to fit specific market conditions and buyer

When a company operates in the markets of two or more different countries, its foremost strategic issue is A) whether to use strategic alliances to help defeat its rivals. B) whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries. C) whether to maintain a national (one-country) manufacturing base and export goods to the other countries. D) choosing which foreign companies to team up with via strategic alliances or joint ventures. E) whether to test the waters with an export strategy before committing to some other competitive approach.

E) Actions over the past few years to substitute global strategies for multi-country strategies in one or

When identifying a diversified company's present corporate strategy, which of the following would not be something to look for? A) Recent moves to build positions in new industries B) The company's approach to allocating investment capital and resources across its present businesses C) Recent management actions to strengthen the company's positions in existing businesses D) Recent moves to divest weak or unattractive business units E) Actions over the past few years to substitute global strategies for multi-country strategies in one or more business units

E) All of these.

Which of the following are generic strategy options for competing in foreign markets? A) Maintaining a national (one-country) production base and exporting goods to foreign markets B) Global strategies keyed either to low-cost or differentiation C) Franchising and licensing strategies D) A multicountry strategy (where a company pursues a custom-tailored country-by-country approach in accordance with local competitive conditions and buyer tastes and preferences) E) All of these.

C) Cross-border transfer strategies and home-field advantage strategies

Which of the following are not generic strategy options for competing in foreign markets? A) An export strategy and a multicountry strategy B) Global strategies keyed either to low-cost or differentiation C) Cross-border transfer strategies and home-field advantage strategies D) Using strategic alliances and joint ventures with foreign competitors as the primary vehicles for entering and competing in foreign markets E) Franchising and licensing strategies

D) A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide whereas a multicountry strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries.

Which of the following does not accurately characterize the differences between a localized multicountry strategy and a global strategy? A) A global strategy entails extensive strategy coordination across countries and a multicountry strategy entails little or no strategy coordination across countries. B) A global strategy often entails use of the best suppliers from anywhere in the world whereas a multicountry strategy may entail fairly extensive use of local suppliers (especially where use of local sources is required by host governments). C) A global strategy tends to involve use of similar distribution and marketing approaches worldwide whereas a multicountry strategy often entails adapting distribution and marketing to local customs and the culture of each country. D) A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide whereas a multicountry strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries. E) A global strategy relies upon the same technologies, competencies, and capabilities worldwide whereas a multicountry strategy often entails the use of somewhat different technologies, competencies, and capabilities as may be needed to accommodate local buyer tastes, cultural traditions, and market conditions.

B) Related diversification offers more competitive advantage potential than does unrelated

Which of the following is an important appeal of a related diversification strategy? A) Related diversification is an effective way of capturing valuable financial fit benefits. B) Related diversification offers more competitive advantage potential than does unrelated diversification. C) Related diversification offers significant opportunities to strongly differentiate a company's product offerings from those of rivals. D) Related diversification is more likely to pass the cost-of-entry test and the capital gains test than unrelated diversification. E) Related diversification is typically more profitable than unrelated diversification, which is a major factor in helping related diversification pass the attractiveness test.

C) An export strategy is especially well suited to accommodating the different needs and preferences of

Which of the following is false as concerns use of an export strategy to compete in foreign markets? A) One advantage of an export strategy is the ability to test the international waters before having to commit substantial sums to establishing operations in foreign countries—the amount of capital required to begin exporting is frequently quite minimal. B) Exporting carries the risk of being vulnerable to adverse shifts in currency exchange rates. C) An export strategy is especially well suited to accommodating the different needs and preferences of buyers in different countries. D) An export strategy may allow a company to gain additional scale economies from centralizing production in one or several giant plants. E) An export strategy is disadvantageous when costs in the country where the goods are being manufactured for export are higher than the costs in those locations where rivals have their plants.

A) A multi-country strategy is generally superior to a global strategy.

Which of the following is not an accurate statement as concerns competing in the markets of foreign countries? A) A multi-country strategy is generally superior to a global strategy. B) There are country-to-country differences in consumer buying habits and buyer tastes and preferences. C) A company must contend with fluctuating exchange rates and country-to-country variations in host government restrictions and requirements. D) Product designs suitable for one country are often inappropriate in another. E) Market growth rates vary from country to country.

B) Scrutinizing each industry/business to determine where driving forces are strongest/weakest and how

Which of the following is not a major consideration in evaluating the pluses and minuses of a diversified company's strategy? A) Checking whether the company's resources fit the requirements of its present business lineup B) Scrutinizing each industry/business to determine where driving forces are strongest/weakest and how many profitable strategic groups the company has diversified into C) Ranking the performance prospects of the various businesses from best to worst and determining what the corporate parent's priorities should be in allocating resources to its different businesses D) Checking the competitive advantage potential of cross-business strategic fits E) Assessing the competitive strength of each business the company has diversified into and determining which ones are strong/weak contenders in their respective industries

D) Greater ability to employ a global strategy (as opposed to a multicountry strategy)

Which of the following is not a potential benefit of strategic alliances or other cooperative arrangements between foreign and domestic companies? A) Gaining wider access to attractive country markets B) Gaining better access to scale economies in production and/or marketing C) Filling competitively important gaps in their technical expertise and/or knowledge of local markets D) Greater ability to employ a global strategy (as opposed to a multicountry strategy) E) Sharing distribution facilities and dealer networks, thus mutually strengthening their access to buyers

D) Requiring foreign companies to use vertical integration to support operations of local companies

Which of the following is not a typical host government requirement that affects the operations of foreign companies? A) Establishing local content requirement on goods made inside their borders by foreign companies B) Having rules and policies that protect local companies from foreign competition C) Placing restrictions on exports to ensure adequate local supplies D) Requiring foreign companies to use vertical integration to support operations of local companies E) Imposing burdensome tax structures and regulatory requirements upon foreign companies doing business within their borders

D) Develop a strategy for the short-term and forget about a long-term strategy because conditions in

Which of the following is not a typical option that companies have to consider to tailor their strategy to fit the circumstances of emerging country markets? A) Prepare to compete on the basis of low price B) Be prepared to modify aspects of the company's business model to accommodate local circumstances (but not so much that the company loses the advantage of global scale and global branding) C) Try to change the local market to better match the way the company does business elsewhere D) Develop a strategy for the short-term and forget about a long-term strategy because conditions in emerging country markets change so rapidly E) Stay away from those emerging markets where it is impractical or uneconomic to modify the company's business model to accommodate local circumstances

B) To strengthen its capability to employ vertical integration strategies, especially those that involve

Which of the following is not a typical reason for companies to expand into the markets of foreign countries? A) To gain access to new customers B) To strengthen its capability to employ vertical integration strategies, especially those that involve partial integration (building positions in selected stages of the industry's value chain C) To achieve lower costs and enhance the firm's competitiveness D) To capitalize on company competencies and capabilities E) To spread business risk across a wider geographic market base

A) Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments

Which of the following is not a viable strategy option for a local company in competing against global challengers? A) Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developments B) Developing business models to exploit shortcoming in local distribution networks or infrastructure C) Taking advantage of low-cost labor and other competitively important local work-force qualities D) Transferring a company's expertise to cross-border markets and initiating actions to contend on a global scale E) Using acquisitions and rapid growth strategies to defend against expansion-minded multinationals

C) Related diversification is particularly well-suited for the use of first-mover strategies and capturing

Which of the following is not one of the appeals of related diversification? A) It can offer opportunities for transferring expertise, technology, and other capabilities from one business to another. B) It can offer opportunities for reducing costs and for leveraging use of a competitively powerful brand name. C) Related diversification is particularly well-suited for the use of first-mover strategies and capturing valuable financial fits. D) It may present opportunities for cross-business collaboration to create valuable new competencies and capabilities. E) The relatedness among the different businesses provides sharper focus for managing diversification and a useful degree of strategic unity across the company's various business activities.

B) Making it easy to fix accountability when company performance targets are not met and enhanced

Which of the following is not one of the chief advantages of a decentralized organizational structure? A) Reducing the size of the corporate bureaucracy and the layers of management B) Making it easy to fix accountability when company performance targets are not met and enhanced capture of cross-business strategic fits C) Promoting greater motivation and involvement in the business on the part of more company personnel D) Spurring new ideas and creative thinking E) Encouraging lower level managers and rank-and-file employees to exercise initiative and act responsibly

A) A profit sanctuary strategy

Which of the following is not one of the generic strategy options for competing in the markets of foreign countries? A) A profit sanctuary strategy B) An export strategy C) A global strategy D) A multicountry strategy E) A franchising strategy

D) Making it harder to pursue a multicountry strategy as compared to a global strategy

Which of the following is not one of the problems and risks of strategic alliances between domestic and foreign firms? A) Overcoming language and cultural barriers B) The amount of time required to build trust, effective communication, and coordination between allies C) Developing mutually agreeable ways of dealing with key issues or differences D) Making it harder to pursue a multicountry strategy as compared to a global strategy E) Suspicions about whether allies are being forthright in exchanging information and expertise

B) Scattering plants across many countries, with each plant producing product versions for local area markets

Which of the following is the most unlikely element of a "think global, act global" approach to crafting a global strategy? A) Minimal responsiveness to buyer tastes, cultural traditions, and market conditions in each country market B) Scattering plants across many countries, with each plant producing product versions for local area markets C) Utilizing the same competitive capabilities, distribution channels, and marketing approaches worldwide D) Requiring local managers in host countries to stick close to the chosen global strategy E) Selling much the same products under same brand names worldwide

E) Selling direct to buyers (perhaps via the company's Web site) to avoid having to establish networks of

Which of the following is the most unlikely element of a localized multicountry strategy? A) Granting country managers fairly wide strategy-making lattitude B) Plants scattered across many host countries, each producing product versions for local area markets C) Marketing and distribution adapted to the buying habits, customs, and culture of each host country D) Preference for local suppliers (use of some local suppliers may be mandated by host governments) E) Selling direct to buyers (perhaps via the company's Web site) to avoid having to establish networks of wholesale/retail dealers in each country market

C) Empowered employee departments

Which of the following is unlikely to be a primary building block in a company's organizational structure? A) Traditional functional departments B) Process departments C) Empowered employee departments D) Divisional units performing one or more major processing steps along the value chain (components manufacture, assembly, distribution) E) Geographic organizational units

A) Highly centralized decision-making (made possible by much greater use of corporate intranets)

Which of the following runs counter to the organizational trends in today's companies? A) Highly centralized decision-making (made possible by much greater use of corporate intranets) B) Few barriers between people at different vertical ranks, between functions and disciplines, and between units in different locations C) Extensive use of Internet technology and e-commerce business practices D) Extensive collaborative efforts among people in different specialties and different geographic locations E) Devoting considerable management attention to building a company capable of outcompeting rivals on the basis of superior resource strengths and competitive capabilities

D) Strategic fit is primarily a byproduct of unrelated diversification and exists when the value chain activities of unrelated businesses possess economies of scope and good financial fit.

Which of the following statements about cross-business strategic fit in a diversified enterprise is not accurate? A) Strategic fit between two businesses exists when the management know-how accumulated in one business is transferable to the other. B) Strategic fit exists when two businesses present opportunities to economize on marketing, selling, and distribution costs. C) Competitively valuable cross-business strategic fits are what enable related diversification to produce a 1 + 1 = 3 performance outcome. D) Strategic fit is primarily a byproduct of unrelated diversification and exists when the value chain activities of unrelated businesses possess economies of scope and good financial fit. E) Strategic fit exists when a company can transfer its brand name reputation to the products of a newly acquired business and add to the competitive power of the new business.

B) The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is not accurate? A) Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets. B) The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C) Exporters win when the currency of the country from which the goods are being exported grows weaker relative to the currencies of the countries that the goods are being exported to. D) The advantages of manufacturing goods in a particular country can be undermined when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E) Domestic companies under pressure from lower-cost imports are benefited when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

D) Companies that are manufacturing goods in a particular country and are exporting much of what they produce are benefited when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to.

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true? A) Fluctuating exchange rates do not pose significant risks to a company's competitiveness in foreign markets. B) The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C) Companies that are manufacturing goods in a particular country and are exporting much of what they produce are disadvantaged when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. D) Companies that are manufacturing goods in a particular country and are exporting much of what they produce are benefited when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. E) Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

A) Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets.

Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true? A) Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets. B) The advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C) Companies that are manufacturing goods in a particular country and are exporting much of what they produce lose out when that country's currency grows weaker relative to the currencies of the countries that the goods are being exported to. D) The advantages of manufacturing goods in a particular country improve when that country's currency grows stronger relative to the currencies of the countries where the output is being sold. E) Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.

D) In global competition, there's more cross-country variation in industry conditions and competitive

Which of the following statements regarding global competition is false? A) In global competition, rivals vie for worldwide market leadership. B) In globally competitive industries, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets. C) In global competition, a firm's overall competitive advantage (or disadvantage) grows out of its entire worldwide operations. D) In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multicountry competition prevails. E) In global competition, many of the same rival companies compete against each other in many different countries, but especially so in countries where sales volumes are large and where having a competitive presence is strategically important to building a strong global position in the industry.

E) In global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals

Which of the following statements regarding multicountry and global competition is false? A) In global competition, rivals vie for worldwide market leadership and the leading competitors compete head-to-head in the markets of many different countries. B) In globally competitive industries, a company's competitive position in one country both affects and is affected by its position in other countries. C) One of the features of multicountry competition is there is greater cross-country variation in market conditions and the nature of the competitive contest among rivals than tends to be the case in globally competitive markets. D) With multicountry competition, the competitive contest is localized, with rivals battling for national market leadership; moreover, winning in one country market does not necessarily signal that a company has the ability to fare well in the markets of other countries. E) In global competition, the size of a firm's worldwide competitive advantage (or disadvantage) equals the sum of the competitive advantages (or disadvantages) it has in each country market where it competes.

B) With multicountry competition, the power and strength of a company's strategy and resource capabilities

Which of the following statements regarding multicountry competition is false? A) One of the features of multicountry competition is that buyers in different countries are attracted to different product attributes. B) With multicountry competition, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets. C) One of the features of multicountry competition is that industry conditions and competitive forces in each national market differ in important respects. D) One of the features of multicountry competition is that the mix of competitors in each country market varies from country to country. E) With multicountry competition, rivals battle for national championships and winning in one country market does not necessarily signal the ability to fare well in other countries.

E) A company that draws on the combined intellectual capital of all of its people can outperform a company that relies on command-and-control.

Which one of the following falsely characterizes a centralized organizational structure? A) Top executives should retain authority over most strategic and operating decisions and keep a tight rein on business-unit heads, department heads, and the managers of key operating units. B) Strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track. C) Tight control by the manager in charge makes it easy to fix accountability when things do not go well. D) Most company personnel have neither the time nor the inclination to direct and properly control they work they are performing and that they lack the knowledge and judgment to make wise decisions about how best to do their work. E) A company that draws on the combined intellectual capital of all of its people can outperform a company that relies on command-and-control.

D) To gain economic incentives offered by governments of developing countries wishing to expand industry and job creation

Which one of the following is not a reason why a company decides to enter foreign markets? A) To spread business risk across a wider geographic market base B) To capitalize on company competencies and capabilities C) To achieve lower costs and enhance the firm's competitiveness D) To gain economic incentives offered by governments of developing countries wishing to expand industry and job creation E) To gain access to more buyers for the company's products/services

B) Determining which business units are cash cows and which ones are cash hogs and then evaluating

Which one of the following is not an important aspect of evaluating the merits of a diversified company's strategy? A) Assessing the competitive strength of each business the company has diversified into B) Determining which business units are cash cows and which ones are cash hogs and then evaluating how soon the company's cash hogs can be transformed into cash cows C) Evaluating the strategic fits and resource fits among the various sister businesses D) Assessing the attractiveness of the industries the company has diversified into, both individually and as a group E) Ranking the performance prospects of the businesses from best to worst and deciding what priority to give each of the company's business units in allocating resources

B) Choosing the appropriate value chain for each business the company has entered

Which one of the following is not one of the elements of crafting corporate strategy for a diversified company? A) Picking new industries to enter and deciding on the means of entry B) Choosing the appropriate value chain for each business the company has entered C) Pursuing opportunities to leverage cross-business value chain relationships and strategic fits into competitive advantage D) Establishing investment priorities and steering corporate resources into the most attractive business units E) Initiating actions to boost the combined performance of the businesses the firm has entered

A) By competing in both developed and emerging country markets and/or by selling direct to foreign buyers via the company's Web site

Which one of the following is not one of the ways a company can strive to gain competitive advantage (or offset domestic disadvantages) by expanding into foreign markets? A) By competing in both developed and emerging country markets and/or by selling direct to foreign buyers via the company's Web site B) By dispersing its activities among various countries in a manner that lowers costs. C) By transferring competitively valuable competencies and capabilities from its domestic operations to its operations in foreign markets D) By dispersing its activities among various countries in a manner that helps achieve greater product differentiation and, and/or working to deepen/broaden its resource strengths and capabilities E) By using cross-border coordination of its strategic moves in ways that a domestic-only competitor cannot

A) Outsourcing support services often has cost-saving benefits but outsourcing primary value chain

Which one of the following statements about outsourcing the performance of value-chain activities to outside specialists is false? A) Outsourcing support services often has cost-saving benefits but outsourcing primary value chain activities has the disadvantages of raising fixed costs, reducing variable costs, and making it harder to develop distinctive competencies. B) Outsourcing critics contend that shifting responsibility for performing value-chain activities to outside specialists can hollow out a company's knowledge base and capabilities, leaving it at the mercy of outsider suppliers, and short of the resource strengths to be a master of its own destiny. C) Outsourcing the performance of certain value chain activities to able suppliers can add to a company's arsenal of capabilities and contribute to better strategy execution. D) The real debate surrounding outsourcing is not about whether too much outsourcing risks loss of control but about how to use outsourcing in a manner that produces greater competitiveness. E) Outsourcing can enable a company to heighten its strategic focus and concentrate its full energies and resources on even more competently performing those value chain activities that are at the core of its strategy and for which it can create unique value.

Mergers and acquisitions are often driven by such strategic objectives as to A. Expand a company's geographic coverage or extend its business into new product categories B. Reduce the number of industry key success factors C. Reduce the number of strategic groups in the industry D. Facilitate a company's shift from a low-cost leadership strategy to a focused low-cost strategy E. Lengthen a company's value chain and thereby put it in better position to deliver superior value to buyers

A

Once a company has decided to employ a particular generic competitive strategy, then it must make such additional strategic choices as A. Whether to enter into strategic alliances or collaborative partnerships B. Whether and when to employ offensive and defensive moves C. What type of Web site strategy to employ D. Whether to integrate forward or backwards into more stages of the industry value chain E. All of the above

A

The best strategic alliances A. Are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit B. Are those whose purpose is to create an industry key success factor C. Are those which help a company move quickly from one strategic group to another D. Involve joining forces in R&D to develop new technologies cheaper than a company could develop the technology on its own E. Aim at raising an industry's barriers to entry

A

The competitive attraction of entering into strategic alliances and collaborative partnerships is A. In allowing companies to bundle competencies and resources that are more valuable in a joint effort than when kept separate B. Speeding new products to market more quickly C. Enabling greater vertical integration D. In allowing the partners to build distinctive competencies E. In helping the partners to increase their respective market shares

A

The strategic impetus for forward vertical integration is to A. Gain better access to end users and better market visibility B. Achieve the same scale economies as wholesale distributors and/or retail dealers C. Control price at the retail level D. Bypass distributors-dealers and sell direct to consumers at the company's Web site E. Build a core competence in mass merchandising

A

Vertical integration strategies A. Extend a company's competitive scope within the same industry by expanding its operations across more parts of the industry value chain B. Are one of the best strategic options for helping companies win the race for global market leadership C. Offer good potential to expand a company's lineup of products and services D. Are particularly effective in boosting a company's ability to expand into additional geographic markets, particularly the markets of foreign countries E. Are a good strategy option for helping a company to revamp its value chain and bypass low value-added activities

A

Which of the following is not one of the options that companies have for using the Internet as a distribution channel to access buyers? A. Establishing a company Web site so as to have an Internet presence B. Operating a Web site that provides existing and potential customers with extensive product information but that relies on click-throughs to distribution channel partners to handle orders and sales transactions C. Using online sales at the company's Web site as a relatively minor distribution channel for achieving incremental sales D. Employing a brick-and-click strategy to sell direct to consumers at the company's Web site while at the same time utilizing traditional wholesalers/distributors and retail outlets to access customers E. Using sales at the company's Web site as the exclusive channel for making sales to customers

A

Which one of the following is not a trait of a good strategic offensive? A. Trying to build a more cost-efficient supply chain than rivals have B. Being impatient with the status quo and displaying a strong bias for swift, decisive actions to boost a company's competitive position vis-à-vis rivals C. Applying resources where rivals are least able to defend themselves D. Focusing relentlessly on building competitive advantage and then striving to convert competitive advantage into decisive advantage E. Employing the element of surprise as opposed to doing what rivals expect and are prepared for

A

The big risk of employing an outsourcing strategy is A. Causing the company to become partially integrated instead of being fully integrated B. 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 C. Hurting a company's R&D capability D. Putting the company in the position of being a late mover instead of an early mover E. Increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain

B

Entering into strategic alliances and collaborative partnerships can be competitively valuable because A. Working closely with outsiders is essential in developing new technologies and new products in virtually every industry B. 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 C. They represent highly effective ways to achieve low-cost leadership and capture first-mover advantages D. They are a powerful way for companies to build loyalty and goodwill among customers with diverse needs and expectations E. They are quite effective in helping a company transfer the risks of threatening external developments to other companies

B

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company A. Must first be a proficient manufacturer B. Must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality C. Must have excess production capacity, so that it has ample in-house ability to undertake additional production activities D. Needs to have a wide product line, so that it can supply parts and components for many products E. Should have a distinctive competence in production process technology and at least a core competence in manufacturing R&D

B

In which of the following cases are first-mover disadvantages not likely to arise? A. When the costs of pioneering are much higher than being a follower and only negligible buyer loyalty or cost savings accrue to the pioneer B. When new infrastructure is needed before market demand can surge C. When the pioneer's skills, know-how and products are easily copied or even bested by late movers D. When customer loyalty to the pioneer is low E. When technological change is rapid and following rivals find it easy to leapfrog the pioneer with next-generation products of their own

B

In which of the following instances is being a first-mover not particularly advantageous? A. When a pioneer is using a low-cost provider strategy B. When buyers are not loyal to pioneering firms in making repeat purchases C. When a pioneer is pursuing product innovation D. When a pioneer is employing a defensive strategy E. When a pioneer is using a differentiation strategy

B

Launching a preemptive strike type of offensive strategy entails A. Cutting prices below a weak rival's costs B. Moving first to secure an advantageous position that rivals are prevented or discouraged from duplicating C. Using hit-and-run tactics to grab sales and market share away from complacent or distracted rivals D. Attacking the competitive weaknesses of rivals E. Leapfrogging into next-generation products and technologies, thus forcing rivals to play catch-up

B

Merger and acquisition strategies A. Are nearly always a superior strategic alternative to forming alliances or partnerships with these same companies B. May offer considerable cost-saving opportunities (perhaps helping to transform otherwise high-cost companies into a competitor with average or below-average costs) and can also be beneficial in helping a company try to invent a new industry and lead the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities C. Are a particularly effective way of pursuing a blue ocean strategy and outsourcing strategies D. Seldom are a superior strategic alternative to forming alliances or partnerships with these same companies because of the financial drain of using the company's cash resources to accomplish the merger or acquisition E. Are one of the best ways for helping a company strongly differentiate its product offering and use a differentiation strategy to strengthen its market position

B

Mergers and acquisitions A. Are nearly always successful in achieving their desired purpose B. Frequently do not produce the hoped-for outcomes C. Are generally less effective than forming alliances or partnerships with these same companies D. 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 E. Are usually more successful in achieving cost reductions than in expanding a company's market opportunities

B

Outsourcing strategies can offer such advantages as A. Increasing a company's ability to strongly differentiate its product and be successful with either a broad differentiation strategy or a focused differentiation strategy B. Obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate and reducing its risk exposure C. Speeding a company's entry into foreign markets D. Permitting greater use of strategic alliances and collaborative partnerships E. Giving a firm more direct control over the costs of value chain activities

B

Strategic alliances A. Are the cheapest means of developing new technologies and getting new products to market quickly B. Are collaborative arrangements where two or more companies join forces to achieve mutually beneficial strategic outcomes C. Are a proven means of reducing the costs of performing value chain activities D. Are best used to insulate a company from the impact of the five competitive forces E. Help insulate a firm from the adverse impacts of industry driving forces

B

The Achilles heel (or biggest disadvantage/danger/pitfall) of relying heavily on alliances and cooperative strategies is A. That partners will not fully cooperate or share all they know, preferring instead to guard their most valuable information and protect their more valuable know-how B. Becoming dependent on other companies for essential expertise and capabilities C. The added time and extra expenses associated with engaging in collaborative efforts D. Having to compromise the company's own priorities and strategies in reaching agreements with partners E. The collaborative arrangements will not live up to expectations

B

The difference between a merger and an acquisition is that A. A merger involves one company purchasing the assets of another company with cash, whereas an acquisition involves a company acquiring another company by buying all of the shares of its common stock B. A merger is a pooling of equals whereas an acquisition involves one company, the acquirer, purchasing and absorbing the operations of another company, the acquired C. In a merger the companies retain their original names whereas in an acquisition the name of the company being acquired is changed to be the name of the acquiring company D. A merger is a combination of three or more companies whereas an acquisition is a pooling of interests of just two companies E. A merger involves two or more companies deciding to adopt the same strategy whereas an acquisition involves one company taking over the strategy-making function of another company

B

The purposes of defensive strategies are to A. Aggressively retaliate against rivals pursuing offensive strategies and prevent against price wars B. Lower the risk of being attacked by rivals, weaken the impact of any attack that occurs and influence challengers to aim their offensive efforts at other rivals C. Guard against adverse changes in the company's macro-environment and insulate the company from the impact of industry driving forces D. Strengthen a company's competitive advantage and reduce its exposure to business risk E. Eliminate a company's resource weaknesses and competitive deficiencies, thereby making it invulnerable to competitive attack from would-be challengers

B

The two big drivers of outsourcing are A. Increased ability to cut R&D expenses and increased ability to avoid the problems of strategic alliances B. A desire to take advantage of the fact that outsiders can perform certain activities better or cheaper and allowing a company to focus its entire energies on those activities that are at the center of its expertise (its core competencies) and that are most critical to its competitive and financial success C. A desire to reduce the company's investment in fixed assets and the need to narrow the scope of the company's in-house competencies and competitive capabilities D. Improved ability to avoid the risks of vertical integration and a desire to reduce the company's risk exposure to changing technology and/or changing buyer preferences E. The attractiveness of a smaller in-house work force and a lower investment in intellectual capital

B

Two big appeals of a brick-and-click strategy are A. Lower advertising costs and enhanced ability to charge lower prices than rivals B. Economically expanding a company's geographic reach and giving existing and potential customers another choice of how to communicate with the company, shop for company products, make purchases or resolve customer service problems C. Low incremental investments to establish a Web site and the ability of customers to use existing company store locations to view and inspect items prior to purchase D. The low costs of operating an e-store at the company's Web site and lower personnel costs for customer service E. Greater ability to avoid channel conflict and increased ability to build a positive brand image with Internet shoppers

B

A) staffing the organization, building core competencies and competitive capabilities, and structuring the

Building an organization capable of good strategy execution entails A) staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort. B) decentralizing authority for performing strategy-critical value chain activities, establishing at least two distinctive competencies, and hiring talented employees. C) investing heavily in employee training, using an empowered organization design and organization structure in order to maximize labor productivity, and employing effective incentive compensation systems. D) centralizing authority in the hands of a chief strategy implementer so as to create the leadership authority for driving implementation forward at a rapid pace. E) empowering employees, maximizing internal operating efficiency, and optimizing core competencies.

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships in order to A. Discourage rival companies from merging with or acquiring the very companies that it is partnering with B. Reduce overall business risk and raise entry barriers into the newly emerging industry C. Help master new technologies and build new expertise and competencies faster than would be possible through internal efforts, establish a stronger beachhead for participating in the target industry and open up broader opportunities in the target industry by melding their capabilities with the resources and expertise of partners D. Help defeat competitors that are employing broad differentiation strategies E. Enhance its chances of achieving global low-cost leadership

C

A good example of vertical integration is A. A global public accounting firm acquiring a small local or regional public accounting firm B. A large supermarket chain getting into convenience food stores C. A crude oil refiner purchasing a firm engaged in drilling and exploring for oil D. A hospital opening up a nursing home for the aged E. A railroad company acquiring a trucking company specializing in long-haul freight

C

A strategic alliance A. Is a collaborative arrangement where companies join forces to defeat mutual competitive rivals B. Involves two or more companies joining forces to pursue vertical integration C. 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 D. Is a partnership between two companies that is typically intended to eliminate the need to engage in outsourcing E. Is usually a cheaper and more effective way for companies to join forces than is merger

C

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries in order to A. Combat the bargaining power of foreign suppliers and help defend against the competitive threat of substitute products produced by foreign rivals B. Help raise needed financial capital from foreign banks and use the brand names of their partners to make sales to foreign buyers C. Get into critical country markets quickly and accelerate the process of building a potent global presence, gain inside knowledge about unfamiliar markets and cultures and access valuable skills and competencies that are concentrated in particular geographic locations D. Help wage price wars against foreign competitors E. Exercise better control over efforts to revamp the global industry value chain

C

The advantages of a brick-and-click strategy include A. Being able to attract bargain-hunting shoppers by selling the company's merchandise online at lower prices than in traditional retail stores B. Being able to offer a much wider product line than is stocked at brick-and-mortar stores C. Low incremental investments to establish a Web site, the ability to access a wider customer base and the ability to use existing distribution centers and/or company store locations for picking orders from on-hand inventories and making deliveries D. Lower personnel costs for customer service and less risk of merchandise theft E. Lower advertising costs

C

When the race among rivals for industry leadership is a marathon rather than a sprint, A. It is best to be a fast follower rather than a first mover or a slow mover B. Fast followers find it easy to leapfrog the pioneer with even better next-generation products of their own C. A slow mover may not be unduly penalized and first-mover advantages can be fleeting D. Being a first mover generally entails relatively low risk and carries a potentially big advantage E. There are nearly always big advantages to being a slow mover rather than an early mover, especially as concerns avoiding the "mistakes" of first or early movers

C

Which of the following is not a strategic disadvantage of vertical integration? A. Vertical integration boosts a firm's capital investment in the industry, thus increasing business risk if the industry becomes unattractive later B. Vertical integration backward into parts and components manufacture can impair a company's operating flexibility when it comes to changing out the use of certain parts and components C. Vertical integration reduces the opportunity for achieving greater product differentiation D. Forward or backward integration often calls for radically different skills and business capabilities than the firm possesses E. Vertical integration poses all kinds of capacity-matching problems

C

Which of the following is not one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits? A. Picking a good partner B. Recognizing that the alliance must benefit both sides C. Minimizing the amount of resources that the partners commit to the alliance D. Ensuring that both parties live up to their commitments E. Structuring the decision-making process so that actions can be taken swiftly when needed

C

Which of the following is not one of the principal offensive strategy options? A. Leapfrogging competitors by being the first adopter of next-generation technologies B. Offering an equally good or better product at a lower price C. Blocking the avenues open to challengers D. Attacking the competitive weakness of rivals E. A blue ocean strategy

C

Which of the following is typically the strategic impetus for forward vertical integration? A. Being able to control the wholesale/retail portion of the industry value chain B. Fewer disruptions in the delivery of the company's products to end-users C. Gaining better access to end users and better market visibility D. Broadening the company's product line E. Allowing the firm access to greater economies of scale

C

Which one of the following is an example of an offensive strategy? A. Blocking the avenues open to challengers B. Signaling challengers that retaliation is likely C. Pursuing continuous product innovation to draw sales and market share away from less innovative rivals D. Introducing new features or models to fill vacant niches in its overall product offering and better match the product offerings of key rivals E. Maintaining a war chest of cash and marketable securities

C

Which one of the following is not a defensive option for protecting a company's market share and competitive position? A. Adding new features or models and otherwise broadening the product line to close off vacant niches and gaps to opportunity-seeking challengers B. Thwarting the efforts of rivals to attack with lower prices by maintaining economy-priced options of its own C. Running comparison ads that call attention to weaknesses in rivals' products D. Signaling challengers that retaliation is likely in the event that they launch an attack E. Making early announcements about impending new products or price changes to induce potential buyers to postpone switching

C

Which one of the following is not a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies? A. Whether to enter into strategic alliances or collaborative partnerships B. Whether and when to employ offensive and defensive moves C. Whether to employ a market share leadership strategy D. Whether to integrate forward or backward into more stages of the industry value chain E. Whether to bolster the company's market position and competitiveness via acquisition or merger

C

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? A. To improve access to new markets B. To expedite the development of promising new technologies or products C. To enable greater vertical integration D. To improve supply chain efficiency E. To overcome deficiencies in their technical and manufacturing expertise and to create desirable new skill sets and capabilities

C

C) are usually bundles of skills and know-how that most often grow out of the combined efforts of cross-

Core competencies and competitive capabilities A) usually are lodged in the narrow skills and specialized work efforts of a single department, as opposed to the combined expertise and capabilities of specialists scattered across several departments. B) most usually stem from collaborative efforts with strategic allies. C) are usually bundles of skills and know-how that most often grow out of the combined efforts of cross- functional work groups and departments performing complementary activities at different locations in a firm's value chain. D) tend to result in competitive advantage when they involve highly specific technologies and are grounded in a company's own deep technical expertise. E) typically are built rapidly, usually in conjunction with important product innovations.

A blue ocean type of offensive strategy A. Is an offensive attack used by a market leader to steal customers away from unsuspecting smaller rivals B. Involves a preemptive strike to secure an advantageous position in a fast-growing market segment C. Works best when a company is the industry's low-cost leader D. 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 E. Involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals

D

Assuming a company elects to use the Internet as its exclusive channel for accessing buyers, then which of the following is not one of the strategic issues that it will need to address? A. Whether to pursue a competitive advantage based on low-costs, differentiation or more value for the money B. How to deliver unique value to buyers C. How to draw traffic to its Web site and then convert page views into revenues D. Whether to employ a forward integration strategy E. Whether to perform order fulfillment activities internally or outsource them

D

Experience indicates that strategic alliances A. Are generally successful B. Work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency C. Work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies D. Have a high "divorce rate." E. Are rarely useful in helping a company win the race for global industry leadership than in establishing positions in industries of the future

D

First-mover disadvantages arise when A. The costs of pioneering are much higher than being a follower and only negligible buyer loyalty or cost savings accrue to the pioneer B. Technological change is rapid and following rivals find it easy to leapfrog the pioneer with next-generation products of their own C. The pioneer's skills, know-how and products are easily copied or even bested by late movers D. All of these

D

One very important advantage of a product-information-only Web site strategy is A. Lower advertising costs and lower customer service costs B. Avoiding the extra costs associated with operating Web site e-stores C. Added ability to interest potential buyers in purchasing the company's products D. Avoiding channel conflict E. Added ability to rely less heavily on strategic alliances with distributors/dealers

D

The two best reasons for investing company resources in vertical integration (either forward or backward) are to A. Expand into foreign markets and/or control more of the industry value chain B. Broaden the firm's product line and/or avoid the need for outsourcing C. Enable use of offensive strategies and/or gain a first mover advantage over rivals in revamping the industry value chain D. Strengthen the company's competitive position and/or boost its profitability E. Achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain greater ability to reduce internal operating costs

D

Which of the following is not a potential advantage of backward vertical integration? A. Reduced vulnerability to powerful suppliers (who may be inclined to raise prices at every opportunity) B. Reduced risks of disruptions in obtaining crucial components or support services C. Reduced costs D. Reduced business risk because of controlling a bigger portion of the overall industry value chain E. Adding to a company's differentiation capabilities and perhaps achieving a differentiation-based competitive advantage

D

Which of the following is not a typical reason that many alliances prove unstable or break apart? A. Diverging objectives and priorities B. An inability to work well together C. The emergence of more attractive technological paths that are better pursued alone or with other partners D. Disagreement over how to divide the profits gained from joint collaboration E. Changing conditions that render the purpose of the alliance obsolete

D

Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions? A. To gain quick access to new technologies or other resources and capabilities B. To create a more cost-efficient operation out of the combined companies C. To expand a company's geographic coverage D. To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy E. To extend a company's business into new product categories

D

Which of the following is not one of the benefits of outsourcing value chain activities presently performed in-house? A. Streamlining company operations in ways that improve organizational flexibility and cut the time it takes to get new products into the marketplace B. Allowing a company to concentrate on its core business, leverage its key resources and do even better what it already does best C. Helping the company assemble diverse kinds of expertise speedily and efficiently D. Preventing a company from hollowing out its technical know-how, competencies or capabilities E. Improving a company's ability to innovate

D

Which one of the following is not a good type of rival for an offensive-minded company to target? A. Market leaders that are vulnerable B. Runner-up firms with weaknesses in areas where the challenger is strong C. Small local and regional companies with limited capabilities D. Other offensive-minded companies with a sizable war chest of cash and marketable securities E. Struggling enterprises that are on the verge of going under

D

Which one of the following statements about offensive strategies is false? A. It often takes the use of successful offensive strategies to build to competitive advantage B. One situation when a company needs to use offensive strategies is when it has no choice but to try to whittle away at a strong rival's competitive advantage C. Offensive strategies have much to recommend when a company sees an opening to gain profitable market share at the expense of rivals D. One of the most potent types of offensive strategy is to introduce new features or models to fill vacant niches in a company's overall product offering and thereby better match the product offerings of key rivals E. A good example of an offensive strategy is deliberately attacking those market segments where a key rival makes big profits

D

A company that elects to use the Internet as its exclusive channel for accessing buyers must address such strategic issues as A. Whether it will have a broad or narrow product offering B. How it will deliver unique value to buyers C. How it will draw traffic to its Web site and then convert page views into revenues D. Whether it will perform order fulfillment activities internally or outsource them E. All of the above

E

A hit-and-run or guerilla warfare type of offensive strategy involves A. Random offensive attacks used by a market leader to steal customers away from unsuspecting smaller rivals B. Undertaking surprise moves to secure an advantageous position in a fast-growing and profitable market segment; usually the guerilla signals rivals that it will use deep price cuts to defend its newly-won position C. Work best if the guerilla is the industry's low-cost leader D. Pitting a small company's own competitive strengths head-on against the strengths of much larger rivals E. Random raids by a small competitor to grab sales and market share from complacent or distracted rivals

E

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 A. To be the first mover B. To be a fast follower C. 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) D. To be the last-mover—playing catch-up is usually fairly easily and nearly always much cheaper than any other option E. To carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly

E

Being first to initiate a particular move can have a high payoff when A. Pioneering helps build up a firm's image and reputation with buyers B. First-time buyers remain strongly loyal to pioneering firms in making repeat purchases C. Moving first can result in a cost advantage over rivals D. Moving first can constitute a preemptive strike, making imitation extra hard or unlikely E. All of these

E

One of the biggest Internet-related strategic issues facing many businesses is A. Whether to have a company Web site B. Whether and how to incorporate use of Internet technology applications in performing various internal value chain activities C. How best to try to offset the company's competitive disadvantage vis-à-vis rivals that already sell direct to buyers at their Web site D. Whether to form a strategic alliance with a pure dot-com enterprise E. What role the company's Web site should play in the company's competitive strategy

E

Outsourcing strategies A. Are nearly always a more attractive strategic option than merger and acquisition strategies B. Carry the substantial risk of raising a company's costs C. Carry the substantial risk of making a company overly dependent on its suppliers D. Increase a company's risk exposure to changing technology and/or changing buyer preferences E. Involve farming out value chain activities presently performed in-house to outside specialists and strategic allies

E

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense when A. An activity can be performed better or more cheaply by outside specialists B. It allows a company to focus its entire energies on those activities that are at the center of its expertise (its core competencies) and that are most critical to its competitive and financial success C. Outsourcing won't adversely hollow out the company's technical know-how, competencies or capabilities D. It reduces the company's risk exposure to changing technology and/or changing buyer preferences E. All of these

E

Relying on outsiders to perform certain value chain activities offers such strategic advantages as A. Obtaining higher quality and/or cheaper components or services B. Improving the company's ability to innovate by allying with "best-in-world" suppliers C. Reducing the company's risk exposure to changing technology and/or changing buyer preferences D. Increasing the firm's ability to assemble diverse kinds of expertise speedily and efficiently E. All of the above

E

Which of the following is a potential defensive move to ward off challenger firms? A. Granting volume discounts or better financing terms to dealers/distributors and providing discount coupons to buyers to help discourage them from experimenting with other suppliers/brands B. Signaling challengers that retaliation is likely in the event they launch an attack C. Lengthening warranties, offering free or low-cost training and support services and providing coupons and sample giveaways to buyers most prone to experiment with using rival brands D. Maintaining a war chest of cash and marketable securities E. All of these

E

Which of the following is not a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement? A. The alliance is critical to the company's achievement of an important objective B. The alliance helps block a competitive threat C. The alliance helps open up important new market opportunities D. The alliance helps build, enhance or sustain a core competence or competitive advantage E. The alliance helps the company obtain additional financing on better credit terms

E

Which one of the following statements regarding the basis for offensive attack on rivals is false? A. It is generally wise to use a company's resource strengths to attack rivals in those competitive areas where they are strong B. Ignoring the need to tie a strategic offensive to a company's strengths is like going to war with a popgun C. Strategic offensives should, as a general rule, be predicated on leveraging a company's competitive assets—its core competencies, competitive capabilities and other resource strengths D. Offensive initiatives aimed at exploiting the competitive weaknesses of rivals stand a better chance of success than do those that challenge a competitor's strengths E. Attacking a market leader is always unwise

E

E) All of these.

Executing strategy A) is primarily an operations-driven activity revolving around the management of people and business processes. B) tests a manager's ability to direct organizational change and achieve continuous improvement in operations and business processes. C) tests a manager's ability to create and nurture a strategy-supportive culture. D) tests a manager's ability to consistently meet or beat performance targets. E) All of these.

B) is a task for every manager and the whole management team but ultimate responsibility for success or

Implementing and executing a company's strategy A) is primarily the job of the company's board of directors since they direct the actions and policies of the top senior executives in executing the strategy. B) is a task for every manager and the whole management team but ultimate responsibility for success or failure falls upon the top senior executives. C) is primarily a responsibility of all company personnel because all personnel are active participants in the strategy execution process and their actions have a huge impact on the ultimate outcome. D) should be delegated to a chief strategy implementer appointed by the chief executive officer. E) is primarily a task for middle and lower-level managers because it is they who have responsibility for pushing the needed changes all the way down to the lowest levels of the organization.

C) Coaching average performers to improve their skills and capabilities, while weeding out underperformers and benchwarmers

In companies where intellectual capital is crucial to good strategy execution, which of the following is generally not among the practices that companies use to establish a talented knowledge base? A) Providing promising employees with challenging, interesting, and skill-stretching assignments and also rotating them through jobs that not only have great content but also span functional and geographic boundaries B) Expecting employees to take full responsibility for staying up to date, thereby minimizing the need to train or retrain employees C) Coaching average performers to improve their skills and capabilities, while weeding out underperformers and benchwarmers D) Encouraging employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businesses E) Fostering a stimulating and engaging work environment such that employees will consider the company a great place to work

E) a probing assessment of what the organization must do differently and better to carry out the strategy

In devising an action agenda to implement and execute a new or different strategy, the place for managers to start is with A) the task of revising and enhancing the company's core competencies. B) choosing which leadership style to employ in trying to carry out the strategy successfully. C) evaluating whether existing policies and procedures are adequately strategy-supportive. D) allocating more resources to strategy-critical parts of the business. E) a probing assessment of what the organization must do differently and better to carry out the strategy successfully

E) When the strategy execution effort is based on tried and true operating practices that vary little from

In which one of the following instances is the training and retraining of employees likely to make the least important contribution to good strategy execution? A) When a company shifts to a strategy requiring different skills, competitive capabilities, managerial approaches, and operating methods B) When an organization is striving to build skills-based competencies C) When technical know-how is changing so rapidly that a company loses its ability to compete unless its skilled people have cutting-edge knowledge and expertise D) When the chosen strategy calls for deeper technological capability or building and using new capabilities. E) When the strategy execution effort is based on tried and true operating practices that vary little from year to year.

B) if and when the company meets or beats its performance targets and shows good progress in achieving

Management's handling of the strategy implementation/execution process can be considered successful A) when the internal organization develops 2 or more core competencies in performing value chain activities. B) if and when the company meets or beats its performance targets and shows good progress in achieving its strategic vision for the company. C) if the company's culture is strong and strategy-supportive. D) if management is able to marshal adequate resources to put the strategy in place within 6-12 months. E) if managers and employees express strong support for the company's strategy and long-term direction.

A) converting the strategy (and any associated strategic plan) into actions and good results.

Once company managers have decided on a strategy, the emphasis turns to A) converting the strategy (and any associated strategic plan) into actions and good results. B) empowering employees to revise and reorganize value chain activities to match the strategy. C) establishing policies and procedures that instruct company personnel in the ways and means of executing the strategy. D) developing a detailed implementation plan that sets forth exactly what every department and every manager needs to do to proficiently execute the company's strategy. E) building the core competencies and competitive capabilities needed to execute the strategy.

B) deciding which value chain activities to perform in-house and which to outsource and making

Organizing a company's work effort to promote successful strategy execution involves A) deciding how much to spend on training managers and employees. B) deciding which value chain activities to perform in-house and which to outsource and making internally performed strategy-critical value chain activities the main building blocks in the organization structure. C) choosing an organization structure that is a tight fit with the corporate culture. D) hiring a capable management team. E) instituting a compensation structure that reduces employee turnover and thus stabilizes the make-up of work teams.

A) less internal bureaucracy, speedier decision-making, quicker responses to changing market conditions,

Outsourcing value chain activities has such strategy-executing advantages as A) less internal bureaucracy, speedier decision-making, quicker responses to changing market conditions, and heightened focus on performing a select few value chain activities (which can improve performance of those activities). B) facilitating the empowerment of employees (because there are less things to do internally). C) promoting a total quality management culture. D) reducing the need to establish a strongly implanted corporate culture. E) reducing the strategic importance of building valuable core competencies.

B) lower costs, less internal bureaucracy, speedier decision-making, more flexibility, and heightened

Outsourcing value chain activities to strategic partners can yield such advantages as A) quick creation of distinctive competencies, enhanced product quality, and better customer service. B) lower costs, less internal bureaucracy, speedier decision-making, more flexibility, and heightened strategic focus. C) lower cost adoption of best practices. D) reduced need to empower employees and rely on team-based organizational arrangements. E) facilitating the capture of cross-functional strategic fits and resource fits.

D) entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what

Putting together a capable top management team A) should take top priority in building competitively valuable core competencies. B) is particularly important when the firm is pursuing unrelated diversification or making a number of new acquisitions in related businesses. C) is important in building an organization capable of proficient strategy execution, but is nearly always less crucial than doing a superior job of training and retraining employees. D) entails filling key managerial slots with smart people who are clear thinkers, good at figuring out what needs to be done, and skilled in "making it happen" and delivering good results. E) is particularly essential for executing a strategy to keep a company's costs lower than rivals and become the industry's low-cost leader.

B) is important because the quality of an organization's people is always an essential ingredient of

Recruiting and retaining capable employees A) is usually much more important to good strategy execution than is assembling a capable top management team. B) is important because the quality of an organization's people is always an essential ingredient of successful strategy execution—knowledgeable, engaged employees are a company's best source of creative ideas for the nuts-and-bolts improvements that lead to operating excellence. C) is more important during periods of rapid growth than during periods of crisis and attempted turnarounds. D) is an important organization-building element, particularly when it comes to transforming a competence into a core competence or distinctive competence. E) is easily the most critical aspect in building competitively valuable core competencies and capabilities.

C) either acquiring a company that has already developed the capability or else acquiring the desired

Sometimes a company can short-circuit the task of building an organizational capability in-house by A) putting in high incentive bonuses to reward individual employees who train hard to develop the desired capability. B) launching an extensive training effort to develop the capability quickly with newly hired employees. C) either acquiring a company that has already developed the capability or else acquiring the desired capability through collaborative efforts with outsiders having the requisite skills, know-how, and expertise. D) using benchmarking and the adoption of best practices to imitate a capability that rivals have already developed. E) empowering a team of employees to develop the capability however they best fit.

E) requires first developing the ability to do something, however imperfectly or inefficiently; second,

The capability-building process A) is first and foremost an activity in empowering employees, putting them on a single team (or in a single department), and giving them the tools and training to perform the desired activity with a high degree of proficiency. B) is a one-step process built around properly training and empowering employees to perform their assigned activities in a tightly-prescribed manner. C) can be shortcut by weeding out underperforming employees and replacing them with people having stronger skills sets and know-how. D) is best done by forming a new department charged with developing the desired competence or capability. E) requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a competence and/or capability by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish and refine its know-how in an effort further improve its performance, ideally striving to match or beat rivals in performing the activity.

A) requires first developing the ability to do something, however imperfectly or inefficiently; second,

The capability-building process A) requires first developing the ability to do something, however imperfectly or inefficiently; second, translating this ability into a competence by learning to do the activity consistently well and at an acceptable cost; and then continuing to polish and refine its know-how in an effort further improve its performance, ideally striving to match or beat rivals in performing the activity. B) entails establishing a new department with primary responsibility for developing the expertise to give the company the needed core competencies and capabilities. C) stands a better chance of succeeding if a company employs a traditional functional organization structure. D) is made much easier if a company abstains from outsourcing important value chain activities. E) aims at turning the company's distinctive competencies into core competencies.

B) assemble a critical mass of talented managers who can function as agents of change, work well together

The overriding aim in building a management team should be to A) select people who are committed to decentralizing decision-making and empowering employees. B) assemble a critical mass of talented managers who can function as agents of change, work well together as a team, and produce organizational results that are dramatically better than what one or two star managers acting individually can achieve. C) choose managers experienced in controlling costs and flattening the organization structure. D) select people who have similar management styles, leadership approaches, business philosophies, and personalities. E) choose managers who believe in having a strong corporate culture and deeply ingrained core values.

B) Instituting policies and procedures that facilitate strategy execution and tying rewards to the achievement

The principal managerial components of the strategy execution process include which of the following? A) Deciding how much to spend on employee training B) Instituting policies and procedures that facilitate strategy execution and tying rewards to the achievement of strategic and financial targets C) Doing an effective job of empowering employees D) Revamping the value chain fin a manner calculated to maximize operating efficiency E) Selecting a capable top management team

B) improved strategy execution and a potential for competitive advantage.

The strategic importance of deliberately trying to develop organizational competencies and capabilities is A) lower cost for employee training. B) improved strategy execution and a potential for competitive advantage. C) increased ability to reduce total operating costs. D) the added ease with which strategic fit and resource fit benefits can be captured. E) enhanced ability to avoid the perils of outsourcing.

D) staffing the organization, building core competencies and competitive capabilities, and structuring the

The three components of building a capable organization are A) making periodic changes in the firm's internal organization to keep people from getting into a comfortable rut, instituting a decentralized approach to decision-making, and developing the appropriate competencies and capabilities. B) hiring a capable top management team, empowering employees, and establishing a strategy-supportive corporate culture. C) putting a centralized decision-making structure in place, determining who should have responsibility for each value chain activity, and aligning the corporate culture with key policies, procedures, and operating practices. D) staffing the organization, building core competencies and competitive capabilities, and structuring the organization and work effort. E) optimizing the number of core competencies and competitive capabilities, making sure that all managers and employees are empowered, and maximizing internal operating efficiency.

E) All of these.

To organize the work effort around the needs of good strategy execution, management needs to A) make those strategy-critical activities/capabilities that are to be performed internally the main building blocks in the internal organization structure. B) determine whether some value chain activities can be outsourced more efficiently or effectively than they can be performed internally. C) decide how much authority to centralize at the top and how much to delegate to down-the-line managers and employees D) provide for coordination and collaboration across the various organizational units and also with outside partners. E) All of these.

A) a company's chief executive officer, its chief operating officer, and the heads of major units (business divisions, functional departments, and key operating units).

Ultimate responsibility for seeing that strategy is executed successfully primarily falls upon the shoulders of A) a company's chief executive officer, its chief operating officer, and the heads of major units (business divisions, functional departments, and key operating units). B) first-line supervisors who have day-to-day responsibility for seeing that key value chain activities are done properly. C) the company's board of directors because board members are the final authority in overseeing and conducting daily operations. D) a company's whole management team—each manager is responsible for attending to what needs to be done in his/her respective area of authority and thus should be held accountable for success or failure. E) all company personnel because all employees are active participants in the strategy execution process and the caliber of their actions have a huge impact on the ultimate outcome.

B) the demanding people-management skills required, the resistance to change that has to be overcome,

What makes the managerial task of executing strategy so challenging and demanding is A) the trial-and-error experimentation that is required to come up with a workable organizational structure. B) the demanding people-management skills required, the resistance to change that has to be overcome, and the perseverance necessary to get a variety of initiatives launched and kept moving along. C) the time and effort it takes to build core competencies. D) the time, training, and creative effort it takes to empower employees and teach them responsible decision-making. E) the supervisory requirements associated with getting company personnel to do things the right way.

B) decrease internal bureaucracies, flatten its organizational structure, shorten the time it takes to respond

When a company uses outsourcing to zero in on ever better performance of those truly strategy-critical activities where its expertise is most needed, then it may also be able to A) create a values-based corporate culture that excels in product innovation. B) decrease internal bureaucracies, flatten its organizational structure, shorten the time it takes to respond to changing market conditions, and capitalize on its partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution. C) devote more resources to its social responsibility strategy, better empower employees, and reduce employee turnover. D) better police compliance with ethical standards, lower overall operating costs, and create two or more distinctive competencies. E) All of the above.

C) outexecute them (beat them by performing certain value chain activities in superior fashion).

When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy), the other main avenue to competitive advantage is to A) do a better job of empowering employees and flattening the organization structure. B) outcompete them with a stronger corporate culture. C) outexecute them (beat them by performing certain value chain activities in superior fashion). D) beat them with a healthy corporate culture based on such core values as high ethical standards, a strong sense of corporate social responsibility, and genuine concern for customer well-being. E) institute a more motivating and cost-efficient compensation and reward system.

E) All of these.

Which of the following are traits of the capability-building process? A) Evolving changes in customer needs and competitive conditions often require tweaking and adjusting a company's portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edge. B) Normally, a core competence or capability emerges incrementally out of company efforts either to bolster skills that contributed to earlier successes or to respond to customer problems, new technological and market opportunities, and the competitive maneuverings of rivals. C) Core competencies or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain. D) The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on deepening and strengthening the competence or capability so as to achieve the dominance needed for competitive advantage. E) All of these.

C) Weeding out the 20% lowest performing employees each year

Which of the following is generally not among the practices that companies use to staff jobs with the best people they can find, particularly if intellectual capital greatly aids good strategy execution? A) Careful screening and evaluation of job applicants, along with continuous training and retraining of employees B) Rotating people through jobs that not only have great content but also span functional and geographic boundaries C) Weeding out the 20% lowest performing employees each year D) Encouraging employees to challenge existing ways of doing things, to be creative and innovative in proposing better ways of operating, and to push their ideas for new products or businesses E) Fostering a stimulating and engaging work environment such that employees will consider the company a great place to work

E) When a company succeeds in hiring talented employees and training them properly, competencies and

Which of the following is not accurate as concerns a company's competencies and capabilities? A) Competencies and capabilities that grow stale can impair competitiveness unless they are refreshed, modified, or even phased out and replaced in response to ongoing market changes and shifts in company strategy. B) Core competencies have to be tweaked and adjusted to keep them fresh and responsive to changing customer needs and market conditions. C) The imperatives of keeping capabilities in step with ongoing strategy and market changes make it appropriate to view a company as a bundle of evolving competencies and capabilities. D) Even after core competencies and competitive capabilities are in place and functioning, company managers can't relax—they still have wrestle with when and how to recalibrate existing competencies and capabilities and when and how to develop new ones. E) When a company succeeds in hiring talented employees and training them properly, competencies and capabilities tend to blossom quickly and, once put in place, can last for a decade or more.

C) Deciding which core competencies and value chain activities to leave as is and which ones to overhaul

Which of the following is not among the principal managerial components of the strategy execution process? A) Building an organization with the competencies, capabilities, and resource strengths needed to execute strategy successfully B) Instituting policies and procedures that facilitate rather than impede strategy execution C) Deciding which core competencies and value chain activities to leave as is and which ones to overhaul and improve D) Adopting best practices and pushing for continuous improvement in how value chain activities are performed E) Tying rewards directly to the achievement of strategic and financial targets and to good strategy execution

C) Selecting and retaining capable employees, thereby enhancing the company's intellectual capital

Which of the following is not among the principal managerial components of the strategy execution process? A) Exercising strong leadership to drive execution forward, keep improving on the details of execution, and achieve operating excellence as rapidly as feasible B) Marshaling sufficient money and people behind the drive for strategy execution C) Selecting and retaining capable employees, thereby enhancing the company's intellectual capital resources D) Instituting best practices and pushing for continuous improvement in how value chain activities are performed E) Instilling a corporate culture that promotes good strategy execution

D) Core competencies generally grow out of company efforts to master a strategy-critical technology or

Which of the following is not one of the traits of core competencies and/or competitive capabilities? A) The key to leveraging core competencies into competitive advantage is concentrating sufficient effort and talent on deepening and strengthening them that the firm achieves dominating depth and gains the capability to outperform rivals by a meaningful margin. B) Core competencies have to be tweaked and adjusted to keep them fresh and responsive to changing customer needs and market conditions. C) Core competencies typically are lodged in the combined efforts of different work groups and departments. D) Core competencies generally grow out of company efforts to master a strategy-critical technology or to invent and patent a valuable technology. E) Core competencies tend to emerge gradually rather than blossoming quickly.

A) Core competencies or capabilities are usually the product of astute company efforts to hire and train

Which of the following is not one of the traits of the capability-building process? A) Core competencies or capabilities are usually the product of astute company efforts to hire and train talented employees. B) Normally, core competencies and competitive capabilities emerge incrementally as a company acts to bolster skills that contributed to earlier successes. C) Core competencies or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments that perform complementary activities at several places in the firm's value chain. D) The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on strengthening the competence or capability to achieve competitive advantage. E) Evolving changes in customer needs and competitive conditions often require tweaking and adjusting a company's portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edge.

D) Building organizational capabilities is best and most cost-effectively accomplished by hiring a cadre of people with the right talent and expertise, putting them together in a single work group, and then teaming the work group with key strategic allies/partners to mesh the skills, expertise, and competencies

Which of the following statements about developing organizational competencies and capabilities is false? A) Core competencies or capabilities are most often bundles of skills and know-how that grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain. B) Evolving changes in customer needs and competitive conditions often require tweaking and adjusting a company's portfolio of competencies and intellectual capital to keep its capabilities freshly honed and on the cutting edge. C) Normally core competencies and competitive capabilities emerge incrementally as a company (1) acts to bolster skills that contributed to earlier successes or (2) acts to respond to customer problems, new technological or market opportunities, and the competitive maneuvers of rivals. D) Building organizational capabilities is best and most cost-effectively accomplished by hiring a cadre of people with the right talent and expertise, putting them together in a single work group, and then teaming the work group with key strategic allies/partners to mesh the skills, expertise, and competencies needed to perform the desired capabilities with some proficiency. E) The key to leveraging a core competence into a distinctive competence (or transforming a capability into a competitively superior capability) is concentrating more effort and talent than rivals on deepening and strengthening the competence or capability so as to achieve the dominance needed for competitive advantage.

C) Executing strategy is a job for a company's whole management team, not just a few senior managers;

Which of the following statements about implementing and executing a new strategy is true? A) The managerial tasks of implementing and executing a new strategy call for essentially the same kinds of creative management talent and innovative thinking as does crafting strategy. B) Executing strategy is chiefly a financially-driven process aimed at squeezing the most profit out of conducting daily operations. C) Executing strategy is a job for a company's whole management team, not just a few senior managers; moreover, all employees are participants in the strategy execution process. D) Executing strategy depends heavily on the caliber of a CEO's business vision, industry and competitive analysis skills, and entrepreneurial creativity. E) Executing strategy tends to be a simpler, quicker management task to perform as compared to crafting a winning strategy.

B) Promoting quick establishment of a total quality culture

Which one of the following is not a reason why companies might use outsourcing to improve performance of strategy-critical activities? A) Improving a company's chances for outclassing rivals in the performance of strategy-critical activities and turning a core competence into a distinctive competence B) Promoting quick establishment of a total quality culture C) Speeding internal decision-making and shortening the time it takes to respond to changing market conditions D) Capitalizing on the partnerships with outsiders to enhance its arsenal of capabilities and thus contribute to better strategy execution E) Helping decrease internal bureaucracies and flatten the organizational structure

D) Determining which functions and organizational units require superior intellectual capital

Which one of the following is not part of organizing the work effort in ways that promote successful strategy execution? A) Providing for the necessary collaboration with suppliers and strategic allies B) Providing for cross-unit coordination and deciding which value chain activities to perform in-house and which ones to outsource C) Determining how much authority to centralize at the top and how much to delegate to down-the-line managers and employees D) Determining which functions and organizational units require superior intellectual capital E) Making internally performed strategy-critical value chain activities the main building blocks in the organization structure

C) Recruiting and retaining capable employees is usually much more important to good strategy execution

Which one of the following statements about recruiting and retaining capable employees is false? A) The quality of an organization's people is always an essential ingredient of successful strategy execution. B) Recruiting and retaining capable employees is a particularly important organization-building task in enterprises where superior intellectual capital is a key resource and also a basis for competitive advantage. C) Recruiting and retaining capable employees is usually much more important to good strategy execution and the achievement of true operating excellence than is assembling a capable top management team. D) It is very difficult for a company to competently execute its strategy and achieve operating excellence without a large band of capable employees who are actively engaged in the process of making ongoing operating improvements. E) In many industries, adding to a company's talent base and building intellectual capital is more important to good strategy execution than additional investments in plants, equipment, and capital projects.

C) The challenge of successfully implementing new strategic initiatives principally involves employing managerial techniques to overcome resistance to change.

Which one of the following statements falsely characterizes the managerial task of executing strategy? A) Executing strategy is an action-oriented, make-things-happen task. B) Executing strategy tests a manager's ability to direct organizational change, achieve continuous improvement in operations and business processes, create and nurture a strategy-supportive culture, and consistently meet or beat performance targets. C) The challenge of successfully implementing new strategic initiatives principally involves employing managerial techniques to overcome resistance to change. D) Strategy execution requires a team effort that entails every manager thinking through the answer to "What does my area have to do to implement its part of the strategic plan, and what should I do to get these things accomplished effectively and efficiently?" E) Implementing and executing strategy is primarily an operations-driven activity revolving around the management of people and business processes.

A) top-level managers still have to rely on the active support and cooperation of middle and lower-level managers in pushing needed changes in functional areas and operating units.

While ultimate responsibility for implementing and executing strategy falls upon the shoulders of senior executives, A) top-level managers still have to rely on the active support and cooperation of middle and lower-level managers in pushing needed changes in functional areas and operating units. B) the pivotal and most decisive strategy-implementing actions are carried out by front-line supervisors who have day-to-day responsibility for seeing that key activities are done properly. C) it is a company's employees who most determine whether the drive for good strategy execution will succeed or fail. D) the success or failure of the implementation/execution effort hinges chiefly on doing an effective job of empowering employees to make day-to-day operating decisions that support good strategy execution. E) the success or failure of the implementation/execution effort hinges chiefly on a company's reward system and whether its policies and procedures are strategy-supportive.