Strategic Management 4
Accurately assessing the competitiveness of a company's cost structure and value proposition requires A. that managers understand an industry's entire value chain system. B. that managers understand the detail of their own company's value chain. C. that managers are involved in functional strategy development. D. that managers understand the firm's profitability outlook. E. All of these.
A
Benchmarking involves A. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs of these activities. B. checking whether a company has achieved more of its financial and strategic objectives over the past five years relative to the other firms it is in direct competition with. C. studying whether a company's resource strengths are more/less powerful than the resource strengths of rival companies. D. studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world-class competitive capabilities. E. comparing the best practices in one industry against the best practices in another industry.
A
Determining whether a company's prices and costs are competitive A. requires looking at the costs of a company's internally performed activities and the costs of its suppliers and forward channel allies (distributors/dealers). B. requires performing pricing surveys on at least a quarterly basis. C. involves developing close relationships with buyers to determine if the market is showing signs of increasing price sensitivity. D. typically involves the use of activity-based cost accounting by the company's key retail customers. E. All of these.
A
Evaluating whether an industry presents a sufficiently attractive business opportunity usually does not involve a consideration of which of the following factors? A. The industry's growth potential B. Whether competitive pressures will likely grow stronger or weaker C. Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces D. The company's competitive position in the industry and its ability to perform industry key success factors E. Whether the industry's product is strongly or weakly differentiated
A
For a particular company resource to have meaningful competitive power and perhaps qualify as a basis for competitive advantage, it should A. be competitively important, hard for competitors to copy or imitate, rare and something rivals lack, and not be easily trumped by the substitute resources/capabilities of rivals. B. be something that a company does internally rather than in collaborative arrangements with outsiders. C. be patentable. D. be rooted in the company's organizational capital, information capital, or human capital. E. have the potential for lowering the firm's unit costs.
A
Identifying and appraising a company's resource strengths and weaknesses and its external opportunities and threats is called A. SWOT analysis. B. competitive asset/liability analysis. C. competitive positioning analysis. D. strategic resource assessment. E. company resource mapping.
A
Sizing up a company's overall resource strengths and weaknesses A. essentially involves constructing a "strategic balance sheet" where the company's resource strengths represent competitive assets and its resource weaknesses represent competitive liabilities. B. is called benchmarking. C. is called competitive strength assessment. D. is focused squarely on ascertaining whether the company has more/less resource strengths than weaknesses. E. is called company resource mapping.
A
The market opportunities most relevant to a particular company are those that A. offer the best growth and profitability. B. provide a strong defense against threats to the company's profitability. C. hold the most potential for product innovation. D. provide avenues for taking market share away from close rivals. E. hold the most potential to reduce costs.
A
The options for remedying a supplier-related cost disadvantage include A. trying to negotiate more favorable prices with suppliers and switching to lower priced substitute inputs. B. forward vertical integration. C. shifting into the production of substitute products. D. shifting from a low-cost leadership strategy to a differentiation or focus strategy. E. cutting selling prices and trying to win a bigger market share.
A
The primary activities included in the value chain include A. supply chain management, operations, distribution, sales and marketing, and customer service activities. B. product R&D, technology and systems development. C. human resource management. D. general administration. E. All of these.
A
When looking at the entire industry, the main areas in a company's overall value chain where important differences between firm's cost and value do not occur are in A. a company's own internal activities. B. the suppliers industry value chain. C. the forward channel portion of the industry chain. D. restoring cost parity of deficiencies. E. None of these.
A
Which of the following is not an example of an external threat to a company's future profitability? A. The lack of a distinctive competence B. The potential of a hostile takeover C. Adverse changes in foreign exchange rates D. Unfavorable demographic shifts E. The introduction of restrictive trade policies in countries where the company does business
A
Which of the following is not an option for remedying a forward channel-related cost disadvantage? A. Negotiate more favorable prices with suppliers B. Integrate forward into company-owned retail outlets C. Collaborate closely with forward channel allies to identify mutual cost-saving opportunities D. Change to a more economical distribution strategy E. Pressure dealer-distributors to reduce their costs and markups
A
Which of the following most accurately reflect a company's resource strengths? A. Its core competencies, competitive capabilities, and valuable intangible assets B. The sizes of its unit sales, revenues, and market share vis-à-vis those of key rivals C. The sizes of its profit margins and return on investment vis-à-vis those of key rivals D. Whether it has more primary activities in its value chain than close rivals and a better overall value chain than these rivals E. Whether it has a more profitable business model than close rivals
A
A company that is at a disadvantage in the marketplace because it lacks competitively valuable resources possessed by rivals A. should consider divesting assets and making future investments in promising new industries. B. may be able to develop substitute resources that accomplish the same objective as the competitively valuable resource possessed by rivals. C. can still marshal competitive power in the marketplace by incorporating product or service features desired by niche buyers. D. is virtually blockaded from using offensive strategies and must rely on defensive strategies. E. should abandon strategy elements that have caused its weakness in the marketplace.
B
A company's competitive strength scores A. pinpoint its strengths and weaknesses against rivals and point to offensive and defensive strategies capable of producing first-rate results. B. determine whether a company has a cost-effective value chain. C. learn if the company's market opportunities are better than those of its rival. D. analyze whether a company is well positioned to gain market share and be the industry's profit leader. E. determine whether a company's resource strengths are sufficient to allow it to earn bigger profits than rivals.
B
A company's value chain identifies A. the steps it goes through to convert its net income into value for shareholders. B. the primary activities that create value for customers and related support activities. C. the series of steps it takes to get a product from a raw materials stage to a finished product. D. the activities it performs in transforming its competencies into distinctive competencies. E. the competencies and competitive capabilities that underpin its efforts to create value for customers and shareholders.
B
A resource-based strategy A. is often based on cross-department combinations of intellectual capital and expertise. B. uses a company's valuable and rare resources and competitive capabilities to deliver value to customers that rivals have difficulty matching. C. is typically based on a stand-alone resource strength such as technological expertise. D. refers to a company's most efficiently executed value-chain activity. E. uses industry key success factors to provide a company with a core competence that rivals cannot effectively imitate.
B
Doing a competitive strength assessment entails A. determining whether a company has a cost-effective value chain. B. ranking the company against major rivals on each of the important factors that determine market success and ascertaining whether the company has a net competitive advantage or disadvantage versus major rivals. C. identifying a company's core competencies and distinctive competencies (if any). D. analyzing whether a company is well positioned to gain market share and be the industry's profit leader. E. developing quantitative measures of a company's chances for future profitability.
B
Every organization has many resources, capabilities and routines however those few things the company does really well and are performed with a very high proficiency are termed A. Core competencies. B. Distinct capabilities. C. Sustainable activities. D. Socially complex activities. E. Distributive factors.
B
Identifying the strategic issues a company faces and compiling a "worry list" of problems and roadblocks is an important component of company situation analysis because A. without a precise fix on what problems/issues a company confronts, managers cannot know what the industry's key success factors are. B. the "worry list" sets the management agenda for taking actions to improve the company's performance and business outlook. C. without a precise fix on what problems/roadblocks a company confronts, managers are less clear about what value chain activities to benchmark. D. the "worry list" helps company managers clarify their thinking about how best to modify the company's value chain. E. these issues and obstacles must be cleared before management can focus clearly on what is the best strategy for the company to pursue.
B
One of the most telling signs of whether a company's market position is strong or precarious is A. whether its product is strongly or weakly differentiated from rivals. B. whether its prices and costs are competitive with those of key rivals. C. whether it has a lower stock price than key rivals. D. the opinions of buyers regarding which seller has the best product quality and customer service. E. whether it is in a bigger or smaller strategic group than its closest rivals.
B
The competitive power of a company resource depends on A. whether it helps differentiate a company's product offering from the product offerings of rival firms. B. whether the resource is really competitively valuable, if it is rare and something competitors lack, how hard it is to copy or imitate, and how easily it can be trumped by the substitute resource strengths and competitive capabilities of rivals. C. whether customers are aware of the resource and view it positively enough to boost the company's brand name reputation. D. whether the resource is something rivals are unable to perform, if it is an important differentiating product or service feature, how strongly it contributes to the company's brand image, and if it is the foundation of a cost-based advantage. E. whether the resource is technology-based or based on superior marketing know-how.
B
The most difficult part of benchmarking is A. the decision of whether to do it at all. B. how to gain access to information regarding rivals' practices and costs. C. when to initiate the process. D. what information to utilize in the analysis process. E. when to stop the process and move forward with strategy.
B
The options for remedying a cost disadvantage associated with activities performed by forward channel allies include A. switching to lower priced substitutes. B. pressuring forward channel allies to reduce their costs and markups. C. shifting into the production of substitute products. D. shifting from a differentiation strategy to a best-cost strategy or focus strategy. E. implementing a benchmarking program and adopting best practices.
B
Which of the following is not a component of evaluating a company's competitive strength and cost structure? A. Evaluating how well the strategy is working B. Scanning the environment to determine a company's best and most profitable customers C. Assessing whether the company's costs and prices are competitive D. Evaluating whether the company is competitively stronger or weaker than key rivals E. Pinpointing what strategic issues and problems merit front-burner management attention
B
Which of the following is not an example of an external threat to a company's future profitability? A. Likely entry of potent new competitors B. The lack of a well-known brand name with which to attract new customers and help retain existing customers C. Unfavorable shifts in buyer demographics and tastes D. Costly new regulatory requirements E. Increase in interest rates
B
Which one of the following is inaccurate as concerns a distinctive competence? A. A distinctive competence is a competitively important activity that a company performs better than its competitors. B. A distinctive competence is typically less difficult for rivals to copy than a core competence. C. A distinctive competence can be a basis for sustainable competitive advantage. D. A distinctive competence has potential for being the cornerstone of the company's strategy. E. A distinctive competence gives a company competitively valuable capability that is unmatched by rivals.
B
Which one of the following is not a reliable measure of how well a company's current strategy is working? A. Trends in the company's sales and earnings growth. B. The company's development of human capital, organizational capital, and information capital. C. Changes in the firm's image and reputation with its customers. D. The company's overall financial strength. E. Evidence of improvement in internal processes such as defect rate, order fulfillment, and employee productivity.
B
Which one of the following is not part of conducting a SWOT analysis? A. Identifying a company's resource strengths and competitive capabilities B. Benchmarking the company's resource strengths and competitive capabilities against industry key success factors C. Identifying a company's market opportunities D. Drawing conclusions about the company's overall business situation E. Matching the company's strategy to its resource strengths and market opportunities, correcting problematic weaknesses, and defending against worrisome threats
B
Which one of the following is not something that can be learned from doing a competitive strength assessment? A. The factors on which a company is competitively strongest and weakest vis-à-vis key rivals B. Whether a company should correct its weaknesses by adopting best practices and revamping the makeup of its value chain C. Which of the rated companies is competitively strongest and what size competitive advantage it enjoys D. Whether a company has a net competitive advantage or a net competitive disadvantage relative to key rivals (with the size of the advantage/disadvantage being indicated by the differences among the companies' competitive strength scores) E. Which rival company is competitively weakest and the areas where it is most vulnerable to competitive attack
B
A company's value chain A. consists of the primary activities that it performs in seeking to deliver value to shareholders in the form of higher dividends and a higher stock price. B. depicts the internally performed activities associated with creating and enhancing the company's competitive assets. C. consists of two broad categories of activities: the primary activities that create customer value and the requisite support activities that facilitate and enhance the performance of the primary activities. D. concerns the basic process the company goes through in performing R&D and developing new products. E. consists of the series of steps a company goes through to develop a new product, get it produced and into the marketplace, and then start collecting revenues and earning a profit.
C
Identifying the primary and secondary activities that comprise a company's value chain A. indicates whether a company's resource strengths will ultimately translate into greater value for shareholders. B. reveals whether a company's resource strengths are well-matched to the industry's key success factors. C. is the first step in understanding a company's cost structure (since each activity in the value chain gives rise to costs). D. is called benchmarking. E. is called resource value analysis.
C
One important indicator of how well a company's present strategy is working is whether A. it has more core competencies than close rivals. B. its strategy is built around at least two of the industry's key success factors. C. the company is achieving gains in financial strength. D. it has been able to create new industry demand through the use of a blue ocean strategy. E. it is subject to weaker competitive forces and pressures than close rivals (a good sign).
C
The external market opportunities that are most relevant to a company are the ones that A. increase market share. B. reinforce its overall business strategy. C. match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability, and present the most potential for competitive advantage. D. correct its internal weaknesses and resource deficiencies. E. help defend against the external threats to its well-being.
C
Two analytical tools useful in determining whether a company's prices and costs are competitive are A. SWOT analysis and key success factor analysis. B. SWOT analysis and benchmarking. C. value chain analysis and benchmarking. D. competitive position assessment and competitive strength assessment. E. driving forces analysis and SWOT analysis.
C
When a company performs a particular competitively important activity truly well in comparison to its competitors, it is said to have A. a competence. B. a strategic resource. C. a distinctive competence. D. a core competence. E. a resource-based strategy.
C
Which of the following is not a good option for trying to remedy high internal costs vis-à-vis rivals firms? A. Investing in productivity-enhancing, cost-saving technological improvements B. Redesigning the product or some of its components to permit more economical manufacture or assembly C. Implementing aggressive strategic resource mapping to permit across-the-board cost reduction D. Outsourcing high-cost activities to vendors or contractors who can perform them more economically E. Relocating high-cost activities (like manufacturing) to geographic areas (such as China or Latin America or Eastern Europe) where they can be performed more cheaply
C
The common types of valuable resources and competitive capabilities that management should consider when crafting a strategy include A. a skill, specialized expertise, or competitively important capability. B. valuable physical and intangible assets. C. valuable human assets and intellectual capital. D. valuable organizational assets and competitively valuable alliances. E. All of these.
E
17. The difference between a distinctive competence and a core competence is that A. a distinctive competence refers to a company's best-executed functional strategy and a core competence refers to a company's best-executed business strategy. B. a distinctive competence refers to a company's most strategically important resource whereas a core competence refers to the basis of a company's competitive advantage over rivals. C. a distinctive competence is a competitively relevant internal activity that a firm performs especially well relative to other internal activities, whereas a core competence is a competitively important activity performed by key strategic allies. D. a distinctive competence represents internal activity that is performed with a very high level of proficiency whereas a core competence is a proficiently performed internal activity that is central to a company's strategy and competitiveness. E. a core competence usually resides in a company's technology and physical assets (state-of-the-art plants and equipment, attractive real estate locations, and so on) whereas a distinctive competence usually resides in a company's human capital, information capital, or organizational capital.
D
A company that lacks a stand-alone resource that is competitively powerful may attempt to develop a competitive advantage through A. improved employee training programs, new marketing promotions, or technological enhancements to production processes. B. the development of a new business strategy that draws upon existing resource strengths. C. extensive strategic planning and resource identification sessions involving managers at all levels of the organization. D. bundled resources that enable superior performance of cross-functional capabilities that can be leveraged to support its business model and strategy. E. devising clever approaches to turning resource weaknesses into resource strengths.
D
A company's strategic options for internally performed value chain activities do not include: A. revamping its value chain to eliminate or bypass some cost-producing activities (particularly low value-added activities). B. implementing the use of best practices, particularly for high-cost activities. C. investing in productivity-enhancing, cost-saving technological improvements. D. switching to activity-based costing. E. outsourcing the performance of high-cost activities to vendors that can perform them more cheaply.
D
A resource-based strategy A. focuses on exploiting a company's best-executed operating strategy. B. is based upon efficient performance of the company's primary value chain activities. C. concentrates on minimizing the costs associated with the design of a product or service. D. attempts to exploit resources in a manner that offers value to customers in ways rivals are unable to match. E. focuses on working with forward channel allies to develop capabilities to outmatch the capabilities of rivals.
D
SWOT analysis A. is a way to measure whether a company's value chain is longer or shorter than the chains of key rivals. B. is a tool for benchmarking whether a firm's strategy is closely matched to industry key success factors. C. reveals whether a company is competitively stronger than its closest rivals. D. provides a good overview of a company's overall situation. E. identifies the reasons a company's strategy is or is not working very well.
D
The two most important parts of SWOT analysis are A. pinpointing the company's competitive assets and pinpointing its competitive liabilities. B. identifying the company's resource strengths and identifying the company's best market opportunities. C. identifying the external threats to a company's future profitability and pinpointing how many market opportunities it has. D. drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into strategic actions to better match the company's strategy to its resource strengths and market opportunities, correct the important weaknesses, and defend against external threats. E. making accurate lists of the company's strengths, weaknesses, opportunities, and threats and then using these lists as a basis for ascertaining how well the company's strategy is working.
D
The value of doing competitive strength assessment is to A. determine how competitively powerful the company's core competencies are. B. learn if the company's market opportunities are better than those of its rivals. C. learn whether a company has a distinctive competence. D. learn how the company ranks relative to rivals on each of the important factors that determine market success and ascertain whether the company has a net competitive advantage or disadvantage vis-à-vis key rivals. E. determine whether a company's resource strengths are sufficient to allow it to earn bigger profits than rivals.
D
Which of the following best describes the market opportunities that tend to be most relevant to a particular company? A. Those market opportunities that provide avenues for taking market share away from close rivals and enhance a company's image as a leader in product innovation and product quality B. Those market opportunities that offer the company a chance to raise entry barriers C. Those market opportunities that help promote greater diversification of revenues and profits D. Those market opportunities that match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability, and present the most potential for competitive advantage E. Those market opportunities that help correct a company's biggest weaknesses and competitive deficiencies
D
The competitive power of a company resource or competitive capability hinges on A. how hard it is for competitors to copy or imitate. B. whether it is rare and, therefore, something rivals lack. C. whether it is really competitively valuable. D. how easily it can be trumped by the substitute resources/capabilities of rivals. E. All of these.
E
Which of the following is not accurate as concerns the task of identifying the strategic issues and problems that merit front-burner managerial attention? A. It entails drawing upon the results and conclusions from analyzing the company's external environment. B. It entails drawing on the results and conclusions from evaluating the company's own resources and competitive position. C. It entails developing a "worry list" of problems and issues for managerial strategy making. D. Identifying the strategic issues and problems that the company faces is the first thing that company managers need to do before starting to analyze the company's internal and external environment. E. Developing a list of what issues and problems that managements needs to address (and to resolve) should always precede deciding upon a strategy and what actions to take to improve the company's position and prospects.
D
A capability of the firm is not considered to be A. the capacity of a firm to competently perform some internal activity. B. referred to as a competence. C. developed and enabled through the deployment of a company's resources or some combination of its resources. D. a competitively valuable resource. E. related to the level of resources available.
E
A company resource weakness or competitive deficiency A. represents a problem that needs to be turned into a strength because weaknesses prevent a firm from being a winner in the marketplace. B. causes the company to fall into a lower strategic group than it otherwise could compete in. C. prevents a company from having a distinctive competence. D. usually stems from having a missing link or links in the industry value chain. E. is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace.
E
A company's resource weaknesses can relate to A. inferior or unproven skills, lack of expertise, or intellectual capital shortfalls in competitively important parts of the business. B. something that it lacks or does poorly (in comparison to rivals). C. deficiencies in competitively important physical, organizational, or intangible assets. D. missing or competitively inferior capabilities in key areas. E. All of these
E
A company's resources are competitive assets that are owned or controlled by the company and include A. financial resources such as a company's credit rating and borrowing capacity. B. tangible resources such as plants, distribution centers, and manufacturing equipment. C. intangible assets such as brand recognition and buyer loyalty. D. intangible assets such as having a results-oriented culture. E. All of these.
E
A core competence A. makes a contribution to a company's success in the marketplace. B. is typically knowledge-based, residing in a company's intellectual capital and not in its tangible physical assets on the balance sheet. C. is often grounded in cross-department combinations of knowledge and expertise. D. is a competitively relevant activity that a firm performs especially well in comparison to the other activities it performs. E. All of these.
E
A distinctive competence A. is a competitively important activity that a company performs better than its competitors. B. gives a company competitively valuable capability that is unmatched by rivals. C. can produce a competitive edge in the marketplace. D. has the potential for being the cornerstone of a company's strategy. E. All of these.
E
A much-used and potent managerial tool for determining whether a company performs particular functions or activities in a manner that represents "the best practice" when both cost and effectiveness are taken into account is A. competitive strength analysis. B. activity-based costing. C. resource cost mapping. D. SWOT analysis. E. benchmarking.
E
In order to sustain the competitive power of resources and capabilities they must be A. continually strengthened and nurtured. B. broadened and deepened to cover emerging market opportunities. C. refreshed, modified, or sometimes phased out and replaced in response to ongoing market changes. D. difficult to imitate. E. All of these.
E
The most important payoff of doing a thorough SWOT analysis is A. identifying whether the company's value chain is cost effective vis-à-vis the value chains of rivals. B. helping strategy makers benchmark the company's resource strengths against industry key success factors. C. enabling a company to assess its leverage in negotiations with buyers. D. revealing whether a company's market share, measures of profitability, and sales compare favorably or unfavorably vis-à-vis key competitors. E. assisting strategy makers in drawing conclusions about the company's overall situation and crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities, and the external threats to its future well-being.
E
The options for internally performed value chain activities and improve a company's cost competitiveness include: A. investing in productivity-enhancing, cost-saving technological improvements. B. outsourcing internally performed activities to those able to perform the activities at a lower cost. C. implementing the use of best practices, particularly for high-cost activities. D. eliminating some cost-producing activities from the value chain, especially low value-added activities. E. All of these.
E
When a company has become proficient in modifying, upgrading, or deepening the company's resources and capabilities, it is called A. a dynamic capability. B. a core competence. C. a distinct competence. D. a strategic assessment. E. None of these.
E
When a company is good at performing a particular internal activity, it is said to have A. a competitive advantage over rivals. B. a competitive capability. C. a distinctive competence. D. a resource-based strategy. E. a competence.
E
Which of the following is not an option for improving supplier-related value chain activities? A. Integrate backward into the business of high-cost suppliers in an effort to reduce the costs of the items being purchased B. Negotiate more favorable prices with suppliers C. Collaborate closely with suppliers to identify mutual cost-saving opportunities D. Switch to lower priced substitute inputs E. Persuade forward channel allies to implement best practices
E
