QUESTION 1
1. Which one
of the following is not a reliable measure of how well a company’s current
strategy is working?
Trends
in the company’s sales and earnings growth.
The
company’s development of human capital, organizational capital, and information
capital.
Changes
in the firm’s image and reputation with its customers.
The
company’s overall financial strength.
Evidence
of improvement in internal processes such as defect rate, order fulfillment,
and employee productivity.
4 points
QUESTION 2
1. Which of
the following is not an option for improving supplier-related value chain
activities?
Integrate
backward into the business of high-cost suppliers in an effort to reduce the
costs of the items being purchased
Negotiate
more favorable prices with suppliers
Collaborate
closely with suppliers to identify mutual cost-saving opportunities
Switch
to lower priced substitute inputs
Persuade
forward channel allies to implement best practices
4 points
QUESTION 3
1. A core
competence
makes a
contribution to a company’s success in the marketplace.
is
typically knowledge-based, residing in a company’s intellectual capital and not
in its tangible physical assets on the balance sheet.
is
often grounded in cross-department combinations of knowledge and expertise.
is a
competitively relevant activity that a firm performs especially well in
comparison to the other activities it performs.
All of
these.
4 points
QUESTION 4
1. A
company’s resource weaknesses can relate to
inferior
or unproven skills, lack of expertise, or intellectual capital shortfalls in
competitively important parts of the business.
something
that it lacks or does poorly (in comparison to rivals).
deficiencies
in competitively important physical, organizational, or intangible assets.
missing
or competitively inferior capabilities in key areas.
All of
these
4 points
QUESTION 5
1. Doing a
competitive strength assessment entails
determining
whether a company has a cost-effective value chain.
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.
identifying
a company’s core competencies and distinctive competencies (if any).
analyzing
whether a company is well positioned to gain market share and be the industry’s
profit leader.
developing
quantitative measures of a company’s chances for future profitability.
4 points
QUESTION 6
1. One
important indicator of how well a company’s present strategy is working is
whether
it has
more core competencies than close rivals.
its
strategy is built around at least two of the industry’s key success factors.
the
company is achieving gains in financial strength.
it has
been able to create new industry demand through the use of a blue ocean
strategy.
it is
subject to weaker competitive forces and pressures than close rivals (a good
sign).
4 points
QUESTION 7
1. Which of
the following is not accurate as concerns the task of identifying the strategic
issues and problems that merit front-burner managerial attention?
It
entails drawing upon the results and conclusions from analyzing the company’s
external environment.
It
entails drawing on the results and conclusions from evaluating the company’s
own resources and competitive position.
It
entails developing a “worry list” of problems and issues for
managerial strategy making.
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.
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.
4 points
QUESTION 8
1. The
primary activities included in the value chain include
supply
chain management, operations, distribution, sales and marketing, and customer
service activities.
product
R&D, technology and systems development.
human
resource management.
general
administration.
All of
these.
4 points
QUESTION 9
1. Which of
the following is not a component of evaluating a company’s competitive strength
and cost structure?
Evaluating
how well the strategy is working
Scanning
the environment to determine a company’s best and most profitable customers
Assessing
whether the company’s costs and prices are competitive
Evaluating
whether the company is competitively stronger or weaker than key rivals
Pinpointing
what strategic issues and problems merit front-burner management attention
4 points
QUESTION 10
1. Which of
the following is not one of the five questions that comprise the task of
evaluating a company’s competitive strength and cost structure?
What
are the company’s most profitable geographic market segments?
How
well is the company’s strategy working?
Is the
company’s cost structure and customer value proposition competitive?
Is the
company competitively stronger or weaker than key rivals?
What
strategic issues and problems merit front-burner management attention?
4 points
QUESTION 11
1. A
resource-based strategy
focuses
on exploiting a company’s best-executed operating strategy.
is
based upon efficient performance of the company’s primary value chain
activities.
concentrates
on minimizing the costs associated with the design of a product or service.
attempts
to exploit resources in a manner that offers value to customers in ways rivals
are unable to match.
focuses
on working with forward channel allies to develop capabilities to outmatch the
capabilities of rivals.
4 points
QUESTION 12
1. When a
company is good at performing a particular internal activity, it is said to
have
a
competitive advantage over rivals.
a
competitive capability.
a
distinctive competence.
a
resource-based strategy.
a
competence.
4 points
QUESTION 13
1. A
capability of the firm is not considered to be
the
capacity of a firm to competently perform some internal activity.
referred
to as a competence.
developed
and enabled through the deployment of a company’s resources or some combination
of its resources.
a
competitively valuable resource.
related
to the level of resources available.
4 points
QUESTION 14
1. The aim
of the best-cost provider strategy is to create a competitive advantage by
incorporating
attractive or upscale product attributes at a lower cost than rivals.
offering
buyers the industry’s best-performing product at the best cost and best
(lowest) price in the industry.
attracting
buyers on the basis of having the industry’s overall best-performing product at
a price that is slightly below the industry-average price.
outcompeting
rivals using low-cost provider strategies.
translating
its best-cost status into achieving the highest profit margins of any firm in
the industry.
4 points
QUESTION 15
1. A broad
differentiation strategy works best in situations where
technological
change is slow paced and new or improved products are infrequent.
buyer
needs and uses of the product are very similar.
buyers
incur low costs in switching their purchases to rival brands.
buyers
have a low degree of bargaining power and purchase the product frequently.
technological
change is fast paced and competition revolves around rapidly evolving product
features.
4 points
QUESTION 16
1. Perceived
value and signaling value are often an important part of a successful
differentiation strategy when
the
nature of differentiation is hard to quantify.
buyers
are making a first-time purchase.
repurchase
of the product or service is infrequent.
buyers
are unsophisticated and unfamiliar with the capabilities of competing brands.
All of
these.
4 points
QUESTION 17
1. A focused
differentiation strategy aims at securing competitive advantage
by
providing niche members with a top-of-the-line product at a premium price.
by
catering to buyers looking for an upscale product at an attractively low price.
with a
product or service offering carefully designed to appeal to the unique
preferences and needs of a narrow, well-defined group of buyers.
by
developing product attributes that no other company in the industry has.
by
convincing affluent buyers that the company has a true world-class product.
4 points
QUESTION 18
1. Broad
differentiation strategies are well suited for market circumstances where
there
are many ways to differentiate the product or service and many buyers perceive
these differences as having value.
most
buyers have the same needs and use the product in the same ways.
buyers
are susceptible to clever advertising.
barriers
to entry are high and suppliers have a low degree of bargaining power.
price
competition is especially vigorous.
4 points
QUESTION 19
1. Examples
of important cost drivers in a company’s value chain do not include:
input
costs.
capacity
utilization.
learning
and experience.
production
technology and design.
customer
service.
4 points
QUESTION 20
1. A focused
low-cost strategy seeks to achieve competitive advantage by
outmatching
competitors in offering niche members an absolute rock-bottom price.
delivering
more value for the money than other competitors.
performing
the primary value chain activities at a lower cost per unit than can the
industry’s low-cost leaders.
dominating
more market niches in the industry via a lower cost and a lower price than any
other rival.
serving
buyers in the target market niche at a lower cost and lower price than rivals.
4 points
QUESTION 21
1. Companies
can pursue differentiation from many angles including
providing
a unique competitive product taste.
executing
superior customer service.
ensuring
engineering design and performance benefits.
providing
products that ensue luxury and prestige.
All of
these.
4 points
QUESTION 22
1. A
strategy to be the industry’s overall low-cost provider tends to be more
appealing than a differentiation or focus strategy when
there
are many ways to achieve product differentiation that buyers find appealing.
buyers
use the product in a variety of different ways.
the
offerings of rival firms are essentially identical, standardized,
commodity-like products.
buyers
have high switching costs in changing from one seller’s product to another.
the
market is composed of many buyer types, all with varying needs and
expectations.
4 points
QUESTION 23
1. A company
that succeeds in differentiating its product offering from those of its rivals
can usually
avoid
having to compete on the basis of simply a low price.
charge
a price premium for its product (because buyers see its differentiating
features as worth something extra).
increase
unit sales (because of the attraction of its differentiating product
attributes).?
gain
buyer loyalty to its brand (because some customers will have a strong
preference for the company’s differentiating features).
All of
these.
4 points
QUESTION 24
1. The
generic types of competitive strategies include
build
market share, maintain market share, and slowly surrender market share.
offensive
strategies and defensive strategies.
low-cost
provider, broad differentiation, focused low-cost, focused differentiation, and
best-cost provider strategies.
low-cost/low-price
strategies, high-quality/high-price strategies, medium-quality/medium-price
strategies, low-cost/high-price strategies.
price
leader strategies, price follower strategies, technology leader strategies,
first-mover strategies, offensive strategies, and defensive strategies.
4 points
QUESTION 25
1. The major
avenues for achieving a cost advantage over rivals include
eliminating
or curbing nonessential cost-producing activities and performing essential
value chain activities more cost-effectively that rivals.
having
a management team that accepts below-market salaries.
being a
first mover in adopting the latest state-of-the-art technologies, especially
those relating to low-cost manufacture.
outsourcing
high-cost activities to offshore vendors.
paying
lower wages to hourly workers than what rivals are paying workers.
