Strategic Management Test #1
________ is the highest level of strategy-making for a company.
Corporate
The Aldi's grocery store chain believes in providing good, healthy food at the lowest price possible. This approach represents Aldi's:
Customer Value Proposition
The two elements of a company's business model are profit formula and __________.
Customer Value Proposition
The plan that comes out of a formal strategic management process would best be called a _________________.
Deliberate Strategy
Increasing globalization, changes in long-term industry growth rates, market and product innovation, as well as changes in societal concerns, attitudes, and lifestyles are all categories of:
Driving Forces
Microsoft's recent purchase of Nokia's phone division reflects the recognition of the need to adapt its resources and capabilities to the shifting forces in and around their various industries and is therefore indicative of a(n) ________________.
Dynamic Capabilities Perspective
Once developed, a company's ___________ should never be changed. a. mission b. strategic vision c. business model d. objectives e. none of the other answers is correct
E. None of the other answers is correct
The power of the buyers is high when:
Each buyer purchases large quantities relative to the size of a single industry member.
Currency exchange rates would be considered part of the macro environment's _____________ factors:
Economic
It costs me $10 per unit to make 1000 widgets and $7 per unit to make 10,000 widgets. This difference in per unit cost is probably the result of a(n) _____________.
Economy of Scale
___________________ tends to be a combination of planned elements and unplanned elements of a company's strategy.
Emergent Strategy
Cost levers (factors that can be manipulated to achieve cost leadership) are always tangible resources, while value levers (factors that can be manipulated to achieve differentiation) are always intangible.
False
Organizations with mission statements always outperform those without mission statements: True or False
False
___________ objectives are more focused on the past, while __________ objectives are more focused on the future.
Financial; strategic
The U.S. economy hit a new milestone this week as the number of _______ surpassed the previous record set in 2007.
Full-time jobs
_________________ is the approach the marketing department would take to achieve company objectives and maximize resource productivity.
Functional strategy
To insure a consistent supply of high quality potatoes, McDonald's in Russia was forced to work with Russian farmers to improve their irrigation and soil management. These efforts are indicative of McDonald's efforts to:
Improve supplier-related value chain activities.
The most attractive customer value proposition is attained by:
Increasing value provided and lowering the price
Sustainable competitive advantage is most often gain through a company's _____________.
Intangible Assets (employee training, brand name)
It is always better to have a broadly defined mission rather than a narrowly defined one mission because:
It is not always better to have a more broadly defined mission statement than a narrowly defined one
The Chairman of the U.S. Federal Reserve is _________________, whose inability/unwillingness to give clear guidance on the timetable for raising interest rates is said to be a contributing factor to the recent sell-off on Wall Street.
Janet Yellan
Scope of competitive rivalry represents one of an industry's ___________.
Key Success Factors
____________ define(s) what a company needs to have, be, or be good at in order to be competitive in a given industry.
Key success factors
"We will do better in ROI by June of next year" is not a well-stated objective because it is clearly not:
Measurable
When an organization briefly describes what its business is about and why it does it, they have articulated a(n) _______________.
Mission Statement
Compared to "beverage company," "cola company" would represent a ___________________ mission definition.
Narrower
The biggest potential pitfall associated with the low-cost provider strategy is:
Overly aggressive price-cutting
The environmental analysis that looks at the natural environment plus aspects of the societal environment is called the _____________________.
PESTEL analysis
The 'R' in VRIN stands for ________________.
Rare
According to Henry Mintzberg, the strategy that will ultimately determine an organization's success or failure is its:
Realized Strategy
One method of tying your recommended courses of action for a company to its main issues identified in your analysis of the company would be to use a(n) _________________.
SWOT Matrix
To protect shareholders from the failed oversight that lead to many infamous corporate scandals, Congress passed the _______________________ in 2002.
Sarbanes-Oxley
A __________ maps out where a company is headed, establishes strategic and financial targets, and outlines the competitive moves and approaches to be used in achieving the desired business results.
Strategic Plan
A company's __________ defines its approach to creating superior value for customers and how capabilities and resources will be employed to deliver the desired value to customers.
Strategy
___________ looks at both strategic and financial objectives when measuring company performance.
The Balanced Scorecard Approach
As a newly-minted Belmont MCB grad and recently-hired manager at HCA, you are asked to do an analysis of the company and its environment and recommend strategic actions your research suggests would best position HCA for the dynamic future of the healthcare industry. One opportunity you identify for the company is:
The demographic shift to an older US population
The main purpose of the SWOT matrix is to:
Tie the issues identified through analysis to the alternatives generated in the strategic planning process.
Having a competitive advantage does not always guarantee competitive success: True or False
True
________________________ will tell you whether or not a particular competency is a source of competitive advantage.
VRIN
The______________ looks at capabilities and competencies as sources of competitive advantage.
Value Chain
The designated beliefs and desired way of doing things at a company are called what?
Values
In which one of the following market circumstances is a broad differentiation strategy generally not well suited?
When buyers are homogeneous in their needs and preferences and are generally satisfied with standardized product
In which of the following circumstances is a strategy to be the industry's overall low-cost provider not particularly well matched to the market situation?
When buyers have widely varying needs and special requirements and the prices of substitute products are relatively high
In the Robin Hood case __________________ was in charge of gathering intelligence for the Merry Men.
Will Scarlett
An appropriate substitute for a Coke would be _____________.
a candy bar
In most companies, crafting and executing strategy is:
a collaborative effort in which every manager has a role for the area he or she heads.
Macro-environmental PESTEL analysis considers the effects of forces on ____________.
a strategic group
With a limited marketing budget, I need to know which of my industry rivals I most need to concentrate my negative advertising on. Generally, this will be the one(s) trying to get the same customers I'm trying to get, and in pretty much the same way. One tool that I can use to make this determination would be:
a strategic group map
Recruiting and training a company's new employees would be considered _____________________.
a support activity
The department in charge of providing the raw materials that go into making a company's product would be considered _____________________.
a support activity
Perceived value and signaling value are often an important part of a successful differentiation strategy when
a. the nature of differentiation is hard to quantify. b. buyers are making a first-time purchase. c. repurchase of the product or service is infrequent. d. buyers are unsophisticated and unfamiliar with the capabilities of competing brands. ^^ALL OF THESE^^
A strategic vision should have all of the following characteristics EXCEPT: a. desirable b. broad c. flexible d. directional e. feasible
b. Broad
Labor unions were formed specifically to increase the ____________________.
bargaining power of suppliers
A ________ strategy is considered to be a hybrid strategy.
best-cost
A ____________ strategy should result in a company being a low-cost provider of a product or service with upscale attributes.
best-cost
It is clear from the chapter discussion that Starbucks is using a __________________ strategy to gain a sustainable competitive advantage in the coffee market.
broad differentiation
Microsoft's current mission statement says: "At Microsoft, our mission and values are to help people and businesses throughout the world realize their full potential." As such, theirs would be considered a _________________.
broad mission statement
Compared to "cellular telephone company," "telecommunications company" would represent a ___________________ mission definition.
broader
The San Antonio Spurs of the National Basketball Association (NBA) won their fourth championship in 10 years in June with an unexpected win over the two-time defending champion Miami Heat. They accomplished this despite the fact that they had no real super stars on their roster while the Heat had arguably the best basketball player in the world still in his prime. It could be argued that San Antonio's sustained excellence and team approach reflect a ____________ approach to competitiveness.
bundle of resources
If I want to determine which products/services would be considered substitutes for the product/service offered by a particular company, I would best consults its:
business model
Microsoft's recent decision to enter the telephone hardware business by acquiring Nokia's phone division opens a new and significant revenue stream for a company that was primarily software driven. As such, this move represents a change in Microsoft's ______________.
business model
Microsoft's recent decision to enter the telephone hardware business by acquiring Nokia's phone division represent strategy at the:
business model
Suppliers are powerful when which of the following happens? a. Satisfactory substitutes are available. b. They sell a commodity. c. They offer a credible threat of forward integration. d. They are part of a highly fragmented industry. e. None of the above
c. They offer a credible threat of forward integration
Opportunities to differentiate a company's product offering
can exist in supply chain activities, R&D, manufacturing activities, distribution and shipping or marketing, sales and customer service.
In developing a SWOT analysis, a single force:
cannot simultaneously be a weakness and a threat
Successful differentiation allows a firm to
command a premium price for its product and/or increase unit sales and/or gain buyer loyalty to its brand.
In looking to buy a new personal computer, many feel much more confident in the purchase if they see the "Intel inside" sticker on the box. In this regard, Intel would be considered a _______________ to the computer industry.
complementor
Kellham Industries has worked hard to improve its quality control, which is now almost on par with that of the better companies in its industry. It is clear, then that through its extraordinary effort Kellham has developed a(n) ______________ for the company.
core competency
Having economies of scale would be most useful if you were attempting to execute a(n) _____________ strategy.
cost leadership
While there are many routes to competitive advantage, they all involve
delivering superior value to buyers in ways rivals cannot readily match.
In class, we have often talked about how Wal-Mart uses its superior distribution system to dominate the various industries it has entered. As such, this distribution system would be considered a _____________.
distinctive competency
If Wal-Mart were to decide to enter the automobile distributor business, this would represent a monumental shift in that industry and over time would fundamentally change its competitive landscape. Wal-Mart's entry into this market would represent a ____________________ originating from the ________________ environment for the automobile distributor's industry.
driving force; competitive
Industry attractiveness can be determined by all of the following except: a. Entry and exit barriers b. Substitutes c. Rivalry d. Buyer and supplier power e. None of the above
e. None of the above (All of the Above)
A high level of competition (rivalry) within an industry can be viewed as: a. a barrier to entry b. a sign that the industry is in the mature stage c. a negative in assessing the attractiveness of the industry d. a relatively expensive way of conducting business for industry participants e. all of the above
e. all of the above
A low-cost leader can translate its low-cost advantage over rivals into superior profit performance by
either using its low-cost edge to underprice competitors and attract price sensitive buyers in large enough numbers to increase total profits or refraining from price-cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold.
Core competencies can be used to leverage ______________ to create competitive advantage for a company.
firm activities
Rolls Royce makes a car that is considered by many to be the height of luxury. Its $400K price tag suggests that the company is using a ____________________ competitive strategy.
focused differentiation
The Honda Accord offers a great combination of values for its customer. While it does not provide the highest level of luxury or performance, it is clearly a step up from entry level automobiles present in the market. As such, the Accord represents an example of the execution of _________________________.
integration strategy
Exit barriers are obstacles that determine how easily a firm can leave the industry. When exit barriers are high, what happens to industry attractiveness?
it decreases
The primary protection against the threat of substitutes offered by the differentiation strategy is:
it offers no protection or differential appeal??
In executing a competitive strength assessment, _________ are appropriate metrics for comparison.
key success factors
Opportunities and threats are found in the firm's_________________________.
macro and competitive environments
Cost leadership in the DVD industry can protect a company from encroachment by Blu-ray sellers by:
making it more expensive (relatively) to switch to Blu-ray technology
Rivalry among competitors is likely to be strongest when the industry is in the ____________ stage of its lifecycle.
mature
If I were interested in finding out what a company is about, I would consult its _____________ and if I wanted to know what it wants to accomplish I would refer to its ___________________.
mission statement; vision statement
Enron was a clear example of the breakdown of _________________.
organizational values
An organization is more likely to get effective oversight of top management with ___________________ directors than with ______________________ directors.
outside, inside
The generic types of competitive strategies include
overall low-cost provider, broad differentiation, focused low-cost, focused differentiation and best cost.
The three questions used to test for a winning strategy focus on fit, sustainability, and _________________.
performance
The pharmaceuticals lobby has been quite effective in helping to shape the healthcare debate that's been raging in Washington for the last five years. As such, they would be considered a ____________ force for the healthcare industry.
political
Avon was originally founded as a vehicle for selling an aspiring author's books. When his books didn't sell as quickly as he expected, he hit upon the idea of including a small bottle of perfume with each book as a marketing gimmick. The perfume turned out to be more popular than the books and a cosmetic empire was born. Avon's near-century of success in the cosmetics industry is a classic example of a(n) _______________ strategy resulting from a(n) ______________ strategy.
realized, emergent
By definition, competitive advantage is always ________________.
relative
The text points out that while Nike doesn't possess a resource that independently passes all four of the VRIN tests with high marks, it does have _____________ that provide the opportunity for sustainable competitive advantage.
resource bundles
The aging of the U.S. population would represent a(n) _______________________ for a business seeking to understand their business environment.
sociocultural force
As a senior manager at ACME, Inc. Freda Crawford is regularly bombarded with business opportunities from a variety of sources. In order to properly determine the appropriateness of a given offer for today's ACME, Ms. Crawford should consult the company's ___________ which should provide the context for strategic decision making.
strategic vision
A __________ allows a company to attract sufficiently large numbers of buyers who have a lasting preference for its products or services over those offered by rivals, despite the efforts of the competitors to offset that appeal and overcome the company's advantage.
sustainable competitive advantage
An organization's patents are part of its __________________:
tangible assets
Congress passed the Clean Air Act in response to the public's newfound environmental concerns and outrage over what it (the public) perceived to be unrestrained corporate pollution. In response, a number of industries such as utilities and automobile manufacturers have had to make dramatic changes in the technology used in the creation and operation of their products. These industries are responding to a change in the ________________ environment that was brought about by changes in the ________________ environment.
technological, political-legal
In looking at Porter's generic business strategies, the engine that makes both the cost leadership and differentiation strategies viable in any given situation is ________________.
the customer's perception of value of the product/service offered
The chief difference between a low-cost leader strategy and a focused low-cost strategy is
the size of the buyer-group that a company is trying to appeal to
The product or service that the end user experiences represent the sum total of ______________.
the value chain of the entire industry
The most appealing approaches to differentiation are
those that are tough for rivals to duplicate and that also have considerable buyer appeal.
Of all its characteristics, the aspect of competitive advantage that should provide the most hope for a brand new start-up in an established industry is the fact that it is ____________.
transitory
Differentiators find competitive advantage primarily by manipulating _________________________ in the economic value creation model.
value
It stands to reason that the greater the consumer's ___________, the better he or she feels about the deal at the time of purchase.
value
Unlike the other forces in Porter's 5 forces competitive analysis, suppliers and buyers are considered part of an industry's:
value chain
As a consumer, if the ____________ you attach to a good or service is greater than its __________, you are likely to purchase it.
value, price
________________ has been reached when management realizes that the industry has changed in a significant way that renders the company's strategic vision obsolete.
A Strategic Inflection Point
Having economies of scale as a key success factor in an industry usually represents _____________.
A barrier to entry for a small start-up hoping to break into the industry
Competitive rivalry is the strongest between firms that _________________________.
Are in the same strategic group
______________ identifies best practices in the industry that a company can implement to increase its competitiveness.
Benchmarking
Enron was a clear example of the failure of the___________ to exercise his/her/its fiduciary oversight responsibility.
Board of Directors
The________ is/are charged with evaluating and compensating a company's senior executives.
Board of Directors
A company's ____________ basically defines how a company intends to make money.
Business Model
____________________ help(s) a company anticipate what its competitors are likely to do next.
Competitive intelligence
