GBA 490 Test 1

GBA 490 Test 1 1. p. 4) A company's strategy concerns C. Management's action plan for running the business and conducting operations—its commitment to pursue a particular set of actions in growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations and achieving targeted objectives 2. (p. 4) A company's strategy consists of D. The competitive moves and business approaches that managers are employing to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations and achieve targeted objectives 3. (p. 4) The competitive moves and business approaches a company's management is using to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations and achieve organizational objectives is referred to as its A. Strategy 4. (p. 4) In crafting a strategy, management is in effect saying D. "Among all the many different business approaches and ways of competing we could have chosen, we have decided to employ this particular combination of competitive and operating approaches in moving the company in the intended direction, strengthening its market position and competitiveness and boosting performance." 5. (p. 3) A company's strategy is most accurately defined as B. Management's commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, conducting operations and improving the company's financial and market performance 6. (p. 3) Which of the following is not something a company's strategy is concerned with? B. How quickly and closely to copy the strategies being used by successful rival companies 7. (p. 3) Which of the following is not a primary focus of a company's strategy? E. How to achieve above-average gains in the company's stock price and thereby meet or beat shareholder expectations 8. (p. 4) In crafting a company's strategy, D. Managers need to come up with some distinctive "aha" element to the strategy that draws in customers and produces a competitive edge over rivals 9. (p. 6) The heart and soul of a company's strategy-making effort A. Involves coming up with moves and actions that produce a durable competitive edge over rivals 10. (p. 6) A company's strategy and its quest for competitive advantage are tightly connected because C. Crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance 11. (p. 6) A company achieves sustainable competitive advantage when B. An attractive number of buyers have a lasting preference for its products or services as compared to the offerings of competitors 12. (p. 7) A creative, distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage C. Is a company's most reliable ticket to above-average profitability—indeed, the tight connection between competitive advantage and profitability means that the quest for sustainable competitive advantage always ranks center stage in crafting a strategy 13. (p. 7) What separates a powerful strategy from a run-of-the-mill or ineffective one is B. Management's ability to forge a series of moves, both in the marketplace and internally, that sets the company apart from rivals, tilts the playing field in the company's favor and produces sustainable competitive advantage over rivals 14. (p. 6 - 7) Which of the following is a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? E. All of these 15. (p. 6 - 7) Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? C. Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins 16. (p. 7) One of the keys to successful strategy-making is D. To come up with one or more differentiating strategy elements that act as a magnet to draw customers and yield a lasting competitive edge 17. (p. 8) Which of the following is not something to look for in identifying a company's strategy? E. Management actions to revise the company's financial and strategic performance targets 18. (p. 8) Which of the following is something to look for in identifying a company's strategy? A. Actions to gain sales and market share B. Actions to strengthen marketing standing and competitiveness by merging with or acquiring rival companies C. Actions to enter new geographic or product markets or exit existing ones D. Actions and approaches used in managing R&D, production, sales and marketing, finance and other key activities E. All of above are pertinent in identifying a company's strategy 19. (p. 9) A company's strategy evolves over time as a consequence of A. The need to keep strategy in step with changing market conditions and changing customer needs and expectations B. The proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy C. The need to abandon some strategy features that are no longer working well D. The need to respond to the newly-initiated actions and competitive moves of rival firms E. All of these 20. (p. 9) Which of the following is not one of the basic reasons that a company's strategy evolves over time? C. The need on the part of company managers to make regular adjustments in the company's strategic vision and also to initiate fresh strategic actions so as to keep employees from becoming bored with having to execute the same strategy month after month 21. (p. 8 - 9) Changing circumstances and ongoing managerial efforts to improve the strategy A. Account for why a company's strategy evolves over time 22. (p. 8 - 9) A company's strategy is a "work in progress" and evolves over time because of A. The ongoing need of company managers to react and respond to changing market and competitive conditions 23. (p. 9) It is normal for a company's strategy to end up being D. A blend of proactive actions to improve the company's competitiveness and financial performance and as- needed reactions to unanticipated developments and fresh market conditions 24. (p. 9 - 10) Crafting a strategy involves A. Stitching together a proactive/intended strategy and then adapting first one piece and then another as circumstances surrounding the company's situation change or better options emerge 25. (p. 9) Which of the following statements about a company's strategy is true? D. A company's strategy is typically a blend of proactive and reactive strategy elements 26. (p. 9 - 10) A company's strategy evolves from one version to the next because of B. The proactive efforts of company managers to improve this or that aspect of the strategy, a need to respond to changing customer requirements and expectations and a need to react to fresh strategic maneuvers on the part of rival firms 27. (p. 9 - 10) Which one of the following does not account for why a company's strategy evolves from one version to another? B. A desire on the part of company managers to develop new strategy elements on the fly 28. (p. 9 - 10) In the course of crafting a strategy, it is common for management to A. Decide to abandon certain strategy elements that have grown stale or become obsolete B. Modify the current strategy when market and competitive conditions take an unexpected turn or some aspects of the company's strategy hit a stone wall C. Modify the current strategy in response to the fresh strategic maneuvers of rival firms D. Take proactive actions to improve this or that piece of the strategy E. All of these 29. (p. 10 - 11) In choosing among strategy alternatives, company managers C. Are well-advised to go beyond merely keeping a company's strategic actions within the bounds of what is legal and consider whether the various pieces of the company's strategy are compatible with ethical standards of "right" and "wrong" and duty—what a company should and should not do 30. (p. 11) A company's strategy can be considered "ethical" B. If it does not entail actions or behaviors that cross the moral line from "can do" to "should not do" (because such actions are unsavory, unconscionable, injurious to others or unnecessarily harmful to the environment) and if it allows management to fulfill its ethical duties to all stakeholders (shareholders, employees, customers, suppliers, the communities in which it operates and society at large) 31. (p. 11) A company's strategy can be considered "ethical" B. If it does not entail actions or behaviors that cross the moral line from "can do" to "should not do" (because such actions are unsavory, unconscionable, injurious to others or unnecessarily harmful to the environment) 32. (p. 11) A company's strategy can be considered "unethical" or shady A. If any of its actions constitute "unfair competition." B. If the company engages in actions or behaviors that are contrary to the general public interest C. If the company's actions/behaviors are harmful to its stakeholders—customers, employees, shareholders, suppliers and the communities in which the company operates D. If it entails actions or behaviors that cross the moral line from "can do" to "should not do" (because such actions are "unsavory" or unconscionable or unnecessarily harmful to the environment) E. All of the above call the company's actions/behaviors into question from an ethical standpoint 33. (p. 11) A company whose strategy has shady or unethical elements D. Puts the reputation of the company and its top executives at risk and may even jeopardize the company's long-term well-being and survival, especially if it is required to pay out considerable sums of money to settle punitive lawsuits and compensate customers, employees, shareholders, suppliers, rival companies and any others for the injuries they have suffered 34. (p. 10 - 11) In endeavoring to craft an ethical strategy, company managers D. Have to go beyond what strategic actions and behaviors are legal and address whether all the various elements of the company's strategy can pass the test of moral scrutiny 35. (p. 12) A company's business model B. Is management's storyline for how it will generate revenues ample to cover costs and produce a profit—absent the ability to deliver good profitability, the strategy is not viable and the survival of the business is in doubt 36. (p. 12) A company's business model C. Zeros in on how and why the business will generate revenues sufficient to cover costs and produce attractive profits and return on investment 37. (p. 12) A company's business model D. Sets forth the key components of the enterprise's business approach, indicates how revenues will be generated and makes a case for why the strategy can deliver value to customers in a profitable manner 38. (p. 12) Management's story line for how and why the company's business approaches will generate revenues sufficient to cover costs and produce attractive profits and returns on investment B. Best describes what is meant by a company's business model 39. (p. 12) The difference between a company's strategy and a company's business model is that D. Strategy relates broadly to a company's competitive moves and business approaches (which may or may not lead to profitability) while its business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from the standpoint of being able to earn satisfactory profits and returns on investment 40. (p. 13) A winning strategy is one that D. Fits the company's internal and external situation, builds sustainable competitive advantage and improves company performance 41. (p. 13) A winning strategy is one that C. Fits the company's internal and external situations, builds sustainable competitive advantage and improves company performance 42. (p. 13) Which one of the following questions can be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy? B. How well does the strategy fit the company's situation? 43. (p. 13) Which of the following questions ought to be used to test the merits of one strategy over another and distinguish a winning strategy from a mediocre or losing strategy? D. Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in better company performance? 44. (p. 15) Crafting and executing strategy are top-priority managerial tasks because C. There is a compelling need for managers to proactively shape how the company's business will be conducted and because a strategy-focused enterprise is more likely to be a stronger bottom-line performer than a company whose management views strategy as secondary and puts its priorities elsewhere 45. (p. 16) Crafting and executing strategy are top-priority managerial tasks because A. Good strategy coupled with good strategy execution greatly raises the chances that a company will be a standout performer in the marketplace Good Strategy + Good Execution = Good Management 46. (p. 16) Good strategy combined with good strategy execution D. Are the most trustworthy signs of good management 47. (p. 16) The most trustworthy signs of a well-managed company are C. Good strategy-making combined with good strategy execution 48. (p. 16) Excellent execution of an excellent strategy is C. The best test of managerial excellence and the best recipe for making a company a standout performer 1. (p. 19) Which one of the following is not one of the five basic tasks of the strategy- making, strategy-executing process? D. Developing a profitable business model 2. (p. 19) Which of the following is an integral part of the managerial process of crafting and executing strategy? B. Setting objectives and using them as yardsticks for measuring the company's performance and progress 3. (p. 19) Which of the following are integral parts of the managerial process of crafting and executing strategy? A. Developing a strategic vision, setting objectives and crafting a strategy 4. (p. 19) The strategy-making, strategy-executing process C. Embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, new ideas and new opportunities 5. (p. 20) A company's strategic vision concerns A. A company's directional path and future product-market-customer-technology focus 6. (p. 20) A company's strategic vision C. Delineates management's aspirations for the business, providing a panoramic view of "where we are going" and a convincing rationale for why this makes good business sense 7. (p. 20) Developing a strategic vision for a company entails A. Prescribing a strategic direction for the company to pursue and a rationale for why this strategic path makes good business sense 8. (p. 20) The managerial task of developing a strategic vision for a company D. Involves deciding upon what strategic course a company should pursue in preparing for the future and why this directional path makes good business sense 9. (p. 20) Which one of the following is not an accurate attribute of an organization's strategic vision? E. Outlining how the company intends to implement and execute its business model 10. (p. 20) Management's strategic vision for an organization A. Charts a strategic course for the organization ("where we are going") and provides a rationale for why this directional path makes good sense 11. (p. 20) What a company's top executives are saying about where the company is headed and about what the company's future product-customer-market-technology will be B. Constitutes their strategic vision for the company 12. (p. 20) One of the important benefits of a well-conceived and well-stated strategic vision is to B. Clearly communicate management's aspirations for the company to stakeholders and help steer the energies of company personnel in a common direction 13. (p. 20) The defining characteristic of a well-conceived strategic vision is D. What it says about the company's future strategic course—"the direction we are headed and what our future product-market-customer-technology focus will be." 14. (p. 21) Which one of the following questions is not pertinent to company managers in thinking strategically about their company's directional path and developing a strategic vision? C. What business approaches and operating practices should we consider in trying to implement and execute our business model 15. (p. 21) Which one of the following questions is not something that company managers should consider in choosing to pursue one strategic course or directional path versus another? E. Do we have a better business model than key rivals? 16. (p. 22) Which of the following are characteristics of an effectively-worded strategic vision statement? A. Graphic, directional and focused 17. (p. 22) Which one of the following is not a characteristic of an effectively-worded strategic vision statement? D. Consensus-driven (commits the company to a "mainstream" directional path that most all stakeholders will enthusiastically support) 18. (p. 22) Which of the following is not a common shortcoming of company vision statements? B. Too narrow—doesn't leave enough room for future growth 19. (p. 22) Which of the following are common shortcomings of company vision statements? A. Too broad, vague or incomplete, bland/uninspiring, not distinctive and too reliant on superlatives 20. (p. 24) A company's mission statement typically addresses which of the following questions? A. "Who are we and what do we do?" 21. (p. 24) The difference between the concept of a company mission statement and the concept of a strategic vision is that A. A mission statement typically concerns a company's present business scope ("who we are and what we do") whereas the principal concern of a strategic vision is with the company's long term direction and future product-market-customer-technology focus 22. (p. 24) The difference between a company's mission statement and the concept of a strategic vision is that B. A mission statement typically concerns a company's present business scope and purpose whereas a strategic vision sets forth "where we are going and why." 23. (p. 25) Top management efforts to communicate the strategic vision to company personnel B. Should be done in language that inspires and motivates company personnel to unite behind executive efforts to get the company moving in the intended direction 24. (p. 25) The task of effectively communicating the strategic vision is made easier by E. Capturing the essence of the vision in a catchy slogan or brief phrase and then using it repeatedly as a reminder of "where we are going and why." 25. (p. 25) Effectively communicating the strategic vision down the line to lower-level managers and employees has the value of A. Not only explaining where management is trying to take the company and what changes lie on the road ahead but, more importantly, also inspiring company personnel to unite behind managerial efforts to get the company moving in the intended direction 26. (p. 25) Perhaps the most important benefit of a vivid, engaging and convincing strategic vision is D. Gaining wholehearted organizational support for the vision and uniting company personnel behind managerial efforts to get the company moving in the intended direction 27. (p. 26) Breaking down resistance to a new strategic vision typically requires that top management C. Frequently reiterate the basis for the new direction at company gatherings, address employee concerns and fears head-on, try to lift the spirits of employees and provide updates and progress reports as events unfold (particularly information that confirms the wisdom of the new direction) 28. (p. 26) When there's an order of magnitude change in a company's environment that dramatically alters its prospects and mandates radical revision of its strategic course, the company is said to have encountered B. A strategic inflection point 29. (p. 26) The payoffs of a clear vision statement do not include A. Greater ability to avoid strategic inflection points 30. (p. 27) A company's values concern D. The beliefs, traits and behavioral norms that company personnel are expected to display in conducting the company's business and pursuing its strategic vision and strategy 31. (p. 27) A company's values relate to such things as C. Fair treatment, integrity, ethical behavior, innovativeness, teamwork, top-notch quality, superior customer service, social responsibility and community citizenship 32. (p. 27) Company managers connect values to the chosen strategic vision by A. Making it clear that company personnel are expected to live up to the values in conducting the company's business and pursuing its strategic vision 33. (p. 29) Which one of the following statements concerning a company's values is inaccurate? E. There is seldom a very wide gap between a company's stated values and the reality of how it conducts its business 34. (p. 29) The managerial purpose of setting objectives includes A. Converting the strategic vision into specific performance targets—results and outcomes the organization wants to achieve B. Using the objectives as yardsticks for tracking the company's progress and performance C. Challenging and helping stretch the organization to perform at its full potential and deliver the best possible results D. Pushing company personnel to be more inventive, to exhibit more urgency in improving the company's financial performance and business position and to be more intentional and focused in their actions E. All of these 35. (p. 30) A set of "stretch" financial and strategic objectives B. Is an effective tool for avoiding ho-hum results 36. (p. 30) Which one of the following is not an advantage of setting "stretch" objectives? C. Helping clarify the company's strategic vision and strategic intent 37. (p. 31) A company needs financial objectives B. Because adequate profitability and financial strength is critical to effective pursuit of its strategic vision, as well as to its long-term health and ultimate survival—weak earnings and a weak balance sheet alarm shareholders and creditors and put executives' jobs at risk 38. (p. 31) Which of the following is the best example of a well-stated financial objective? A. Increase earnings per share by 15% annually 39. (p. 31) Which of the following is the best example of a well-stated strategic objective? C. Overtake key competitors on product quality within three years 40. (p. 31) Strategic objectives D. Relate to strengthening a company's overall business and competitive position 41. (p. 32) A balanced scorecard for measuring company performance E. Entails creating a set of objectives that is "balanced" in the sense of including both financial and strategic objectives 42. (p. 31 - 32) A "balanced scorecard" that includes both strategic and financial performance targets is a conceptually strong approach for judging a company's overall performance because A. Financial performance measures are lagging indicators that reflect the results of past decisions and organizational activities whereas strategic performance measures are leading indicators of a company's future financial performance 43. (p. 32) Perhaps the most reliable way for a company to improve its financial performance over time is to B. Recognize that the achievement of strategic objectives fosters better long-term financial performance and that a balanced scorecard approach to objective-setting has much to recommend 44. (p. 32) A company that pursues and achieves strategic objectives Refer To: 43 D. Is frequently in better position to improve its future financial performance (because of the increased competitiveness and strength in the marketplace that flows from the achievement of strategic objectives) 45. (p. 33) A company exhibits strategic intent when B. It relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective 46. (p. 33) Strategic intent refers to a situation where a company A. Relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective 47. (p. 33) A company with strategic intent E. Usually has an exceptionally bold and grandiose long-term objective—like becoming the dominant global market leader—and an unshakable commitment to concentrating its full resources and strategy on achieving that objective even if it takes 10 years or longer 48. (p. 34) Company objectives B. Need to be broken down into performance targets for each of its separate businesses, product lines, functional departments and individual work units 49. (p. 34) A company needs performance targets or objectives A. For its operations as a whole and also for each of its separate businesses, product lines, functional departments and individual work units 50. (p. 35) The task of stitching together a strategy A. Entails addressing a series of hows: how to grow the business, how to please customers, how to outcompete customers, how to outcompete rivals, how to respond to changing market conditions, how to manage each functional piece of the business and develop needed competencies and capabilities and how to achieve strategic and financial objectives 51. (p. 35) Masterful strategies come from E. Doing things differently from competitors where it counts—out-innovating them, being more efficient, adapting faster—rather than running with the herd 52. (p. 37) Strategy-making is B. More of a collaborative group effort that involves, to some degree, all managers and sometimes key employees, as opposed to being the function and responsibility of a few high-level executives 53. (p. 36 - 37) Managerial jobs with strategy-making responsibility E. Extend throughout the managerial ranks and exist in every part of a company⎯business units, operating divisions, functional departments, manufacturing plants and sales districts 54. (p. 36) Which of the following accurately describes the task of crafting a company's strategy? B. The more that a company's operations cut across different products, industries and geographical areas, the more that headquarters executives have little option but to delegate considerable strategy-making authority to down-the-line managers in charge of particular subsidiaries, divisions, product lines, geographic sales offices, distribution centers and plants 55. (p. 35 - 37) Which of the following is not an accurate description of the task of crafting a company's strategy? C. The task of crafting strategy is best done by a company's chief strategic planning officer, who should report directly to the company's CEO and board of directors 56. (p. 37 - 38) A company's overall strategy A. Is really a collection of strategic initiatives and actions devised by managers and key employees up and down the whole organizational hierarchy 57. (p. 39) In a diversified company, the strategy-making hierarchy consists of D. Corporate strategy, business strategies, functional strategies and operating strategies 58. (p. 40) In a single-business company, the strategy-making hierarchy consists of B. Business strategy, functional strategies and operating strategies 59. (p. 38) Corporate strategy for a diversified or multi-business enterprise B. Is orchestrated by the CEO and other senior corporate executives and centers around the kinds of initiatives the company uses to establish business positions in different industries and efforts to boost the combined performance of the set of businesses the company has diversified into 60. (p. 38) Business strategy concerns A. The actions and approaches crafted by management to produce successful performance in one specific line of business 61. (p. 38) Business strategy, as distinct from corporate strategy, is chiefly concerned with B. Forging actions and approaches to compete successfully in a particular line of business 62. (p. 38) Functional strategies A. Concern the actions, approaches and practices to be employed in managing particular functions or business processes or key activities within a business 63. (p. 38) The primary role of a functional strategy is to D. Support the overall business strategy and competitive approach 64. (p. 40) Operating strategies concern C. The relatively narrow strategic initiatives and approaches for managing key operating units within a business (plants, distribution centers, geographic units) and for performing strategically significant operating tasks (maintenance, shipping, inventory control, purchasing, advertising) in ways that support functional strategies and the overall business strategy 65. (p. 40) Management's direction-setting, strategy-making effort is not complete until A. The pieces of a company's strategy up and down the strategy pyramid are cohesive and mutually reinforcing, fitting together like a jigsaw puzzle 66. (p. 40) A company's strategy is not at full power until C. Its many pieces are united and fit together like a jigsaw puzzle A Strategic Vision + Objectives + Strategy = A Strategic Plan 67. (p. 41) A company's strategic plan consists of B. A vision of where it is headed, a set of performance targets and a strategy to achieve them 68. (p. 42 - 43) Which of the following is not among the principal managerial tasks associated with managing the strategy execution process? C. Surveying employees on how they think costs can be reduced and how employee morale and job satisfaction can be improved 69. (p. 43) Management is obligated to monitor new external developments, evaluate the company's progress and make corrective adjustments in order to B. Decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods 70. (p. 44) The primary roles/obligations of a company's board of directors in the strategy- making, strategy-executing process include C. Overseeing the company's direction, strategy and business approaches and evaluating the caliber of senior executives' strategy-making and strategy-executing skills 71. (p. 44 - 45) The obligations of an investor-owned company's board of directors in the strategy-making, strategy-executing process include D. Overseeing the company's financial accounting and financial reporting practices and evaluating the caliber of senior executives' strategy-making/strategy-executing skills 72. (p. 44 - 45) Which one of the following is not among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned? A. Hiring and firing senior-level executives and working with the company's chief strategic planning officer to improve the company's strategy when performance comes up short of expectations .1 (p. 49 - 50) A company's "macroenvironment" refers to C. All the relevant forces and factors outside a company's boundaries⎯general economic conditions, population demographics, societal values and lifestyles, technological factors, governmental legislation and regulation and closer to home, the industry and competitive arena in which it operates 2. (p. 49 - 50) Which one of the following is not part of a company's macroenvironment? E. The company's resource strengths, resource weaknesses and competitive capabilities 3. (p. 52) Which of the following is not a major question to ask in thinking strategically about industry and competitive conditions in a given industry? Refer To: 03-03 A. How many companies in the industry have good track records for revenue growth and profitability? 4. (p. 52) Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as Refer To: 03-03 A. The forces driving change in the industry B. The dominant economic features of the industry in which the company operates C. The kinds of competitive forces industry members are facing and the strength of each competitive force D. The key factors influencing future competitive success in the industry E. All of the above 5. (p. 53) Which of the following is not a factor to consider in identifying an industry's dominant economic features? D. How strong driving forces and competitive forces are 6. (p. 53) Which of the following is not a relevant consideration in identifying an industry's dominant economic features? C. How many strategic groups the industry has and which ones are most profitable and least profitable 7. (p. 54) The state of competition in an industry is a function of A. The competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry B. Competitive pressures coming from the attempts of companies in other industries attempting to win buyers over to their substitute products C. Competitive pressures associated with the threat of new entrants into the marketplace D. Competitive pressures associated with the bargaining power of suppliers and customers E. All of these 8. (p. 54) The nature and strength of the competitive forces that prevail in an industry are generally a joint product of A. The pressures induced by the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry B. The threat that firms outside the industry will decide to enter the market C. The attempts of companies in other industries to win buyers over to their own substitute products D. Competitive pressures stemming from the bargaining power of both suppliers and buyers E. All of these 9. (p. 54) Which of the following is not one of the five typical sources of competitive pressures? A. The power and influence of industry driving forces 10. (p. 55) The most powerful of the five competitive forces is usually B. The competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry 11. (p. 54 - 55) Typically, the weakest of the five competitive forces in an industry is/are: A. The threat posed by potential new entrants B. The bargaining power and leverage that suppliers are able to exercise C. The competitive pressures that stem from the ready availability of attractively-priced substitute products D. The bargaining power and leverage that buyers are able to exercise E. None of the above is typically weakest 12. (p. 56) Competitive jockeying and market maneuvering among industry rivals E. Is ever-changing as fresh offensive and defensive moves are initiated and as rivals emphasize first one mix of competitive weapons and tactics and then another 13. (p. 54) Using the five-forces model of competition to determine what competition is like in a given industry involves A. Building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining whether the collective impact of all five competitive forces is conducive to earning attractive profits 14. (p. 55) What makes the marketplace a competitive battlefield is B. The constant jockeying of industry members to strengthen their standing with buyers and win a competitive edge over rivals 15. (p. 57) Factors that cause the rivalry among competing sellers to be weak include B. Rapid growth in buyer demand and high buyer switching costs 16. (p. 57 - 59) Which one of the following does not cause the rivalry among competing sellers to be weak? D. Low barriers to entry 17. (p. 57) Factors that tend to result in weak rivalry among competing sellers include B. Rapid growth in buyer demand, high buyer costs to switch brands and so many industry rivals that any one company's actions have little impact on rivals' businesses 18. (p. 57) The rivalry among competing sellers tends to be less intense when C. Industry rivals are not particularly aggressive or active in making fresh moves to improve their market standing and business performance 19. (p. 57) Rivalry among competing sellers is generally more intense when D. Rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising and otherwise gain sales and market share 20. (p. 57) Rivalry among competing sellers grows in intensity when E. Buyer demand is growing slowly and the industry is composed of 6 to 10 competitors that are fairly equal in size and competitive capability 21. (p. 57) The rivalry among competing firms tends to be more intense A. When demand for the product is growing slowly, one or maybe several industry members have powerful and successful competitive strategies, buyers have low switching costs and the actions of any one company to attract more customers and boost market share have strong direct impact on the businesses of rivals 22. (p. 60) The competitive force of rival firms' jockeying for better market positions, higher sales and market shares and competitive advantage D. Tends to intensify when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders 23. (p. 57) Which of the following is not among the factors that affect whether competitive rivalry among participating firms is strong, moderate or weak? D. Whether industry driving forces are strong or weak 24. (p. 59 - 60) In analyzing the strength of competition among rival firms, an important consideration is B. The diversity of competitors in terms of visions, strategic intents, objectives, strategies, resources and countries of origin 25. (p. 58 - 60) The intensity of rivalry among competing sellers does not depend on whether A. The industry has more than two strong driving forces and whether the industry has more than 2 strategic groups 26. (p. 57) Rivalry among competing sellers tends to be more intense when C. Several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position 27. (p. 58) In which one of the following instances is rivalry among competing sellers not more intense? E. When there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members 28. (p. 62 - 63) Potential entrants are more likely to be deterred from actually entering an industry when A. Incumbent firms have previously been aggressive in defending their market positions against entry 29. (p. 61) Competitive pressures associated with the threat of entry are greater when A. Incumbent firms are unable or unwilling to strongly contest the entry of newcomers B. Newcomers can expect to earn attractive profits and a number of outsiders have the expertise and resources to hurdle whatever entry barriers exist C. Entry barriers are relatively low and buyer demand for the product is growing fairly rapidly D. Existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence E. All of these conditions heighten the competitive pressures associated with fresh entry into the industry 30. (p. 61) Which one of the following does not intensify the competitive pressures associated with the threat of entry? B. When industry members are struggling to earn good profits 31. (p. 61) Which one of the following increases the competitive pressures associated with the threat of entry? E. When newcomers can expect to earn attractive profits 32. (p. 61) The competitive threat that outsiders will enter a market is weaker when A. Financially strong industry members send strong signals that they will launch strategic initiatives to combat the entry of newcomers 33. (p. 61) Competitive pressures stemming from the threat of entry are weaker when C. The industry outlook is risky or uncertain 34. (p. 60 - 62) Which of the following is generally not considered as a barrier to entry? A. Rapid market growth 35. (p. 63) The best test of whether potential entry is a strong or weak competitive force is E. To ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates 36. (p. 65) The competitive pressures from substitute products tend to be stronger when A. Buyers are relatively comfortable with using substitutes and the costs to buyers of switching over to the substitutes are low 37. (p. 65) In which of the following instances are industry members not subject to stronger competitive pressures from substitute products? B. Buyers are dubious about using substitutes 38. (p. 65) Industry rivals tend to experience weak competitive pressures from substitute products when D. Buyers incur high costs in switching to substitutes and substitutes are higher priced relative to the performance they deliver 39. (p. 65) Just how strong the competitive pressures are from substitute products depends on B. Whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes 40. (p. 64) Which of the following is not a good example of a substitute product that triggers stronger competitive pressures? C. Coca-Cola as a substitute for Pepsi 41. (p. 66) Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of D. Whether suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry 42. (p. 67) The bargaining leverage of suppliers is greater when A. There are no good substitutes for the items being furnished by the suppliers and the number of suppliers is relatively small 43. (p. 69) In which one of the following instances are the competitive pressures that industry members experience in their dealings with suppliers not weakened? E. When the items purchased from suppliers are in short supply 44. (p. 69) Supplier bargaining power is weaker when A. Good substitute inputs exist or new ones emerge 45. (p. 69) Which one of the following is not a factor that affects the strength of supplier bargaining power? C. Whether industry members are struggling to make good profits because of slow- growing market demand 46. (p. 69) Which one of the following is not a factor in causing supplier bargaining power to be relatively strong? C. The input being supplied is a commodity 47. (p. 67) The strength of competitive pressures that suppliers can exert on industry members is mainly a function of A. Whether needed inputs are in short supply or whether ample supplies are readily available from several different suppliers 48. (p. 68) When one or more industry members have unusually effective and mutually advantageous partnerships with their suppliers, C. There is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers 49. (p. 68) Which one of the following is not a reason why industry members are often motivated to enter into collaborative partnerships with key suppliers? A. To reduce the costs of switching suppliers 50. (p. 72) In which of the following circumstances are competitive pressures associated with the bargaining power of buyers not relatively strong? Refer To: 03-51 A. When buyer demand is growing rapidly 51. (p. 72) Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on Refer To: 03-51 E. Whether demand-supply conditions represent a buyer's market or a seller's market 52. (p. 69) Whether buyer-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of Refer To: 03-51 B. The extent to which buyers can exercise enough bargaining power to influence the terms and conditions of sale in their favor and whether the extent of collaboration between certain sellers and certain buyers in the industry places rivals lacking such collaborative arrangements at a competitive disadvantage 53. (p. 70) Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when Refer To: 03-51 C. One or more rival sellers form mutually advantageous partnerships with important or prestigious buyers such that rivals lacking such partnerships are placed at a competitive disadvantage 54. (p. 72) Competitive pressures stemming from buyer bargaining power tend to be weaker when Refer To: 03-51 C. The costs incurred by buyers in switching to competing brands or to substitute products are relatively high 55. (p. 72) Which of the following conditions acts to weaken buyer bargaining power? Refer To: 03-51 A. When buyers are unlikely to integrate backward into the business of sellers 56. (p. 70 - 71) Which of the following is not a factor that causes buyer bargaining power to be stronger? Refer To: 03-51 B. The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities 57. (p. 72) Buyers are in position to exert strong bargaining power in dealing with sellers when Refer To: 03-51 E. The number of buyers is small or when a customer is particularly important to a seller 58. (p. 72) Which of the following factors is not a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak? C. Whether buyer needs and expectations are changing rapidly or slowly 59. (p. 69 - 71) Which of the following factors does not affect whether buyer bargaining power and seller-buyer collaboration are an important source of competitive pressure in an industry? Refer To: 03-51 E. Whether buyers have a strong preference for products of superior quality or just average quality 60. (p. 69 - 71) Which of the following factors is not a relevant consideration in determining the strength of buyer bargaining power? Refer To: 03- B. Whether the seller is a manufacturer or a wholesaler/distributor Is the Collective Strength of the Five Competitive Forces Conducive to Good Profitability? 61. (p. 73) A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products and little bargaining leverage on the part of both suppliers and customers D. Is conducive to industry members earning attractive profits 62. (p. 73) A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products and considerable bargaining leverage on the part of both suppliers and customers A. Is competitively unattractive from the standpoint of earning good profits 63. (p. 73) As a rule, the stronger the collective impact of competitive pressures associated with the five competitive forces, B. The lower the combined profitability of industry members 64. (p. 74) The "driving forces" in an industry C. Are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions 65. (p. 74) Industry conditions change D. Because important forces create pressures or incentives for industry participants (competitors, customers, suppliers) to alter their actions 66. (p. 74) The task of driving forces analysis is to D. Identify the driving forces, assess whether their impact will make the industry more or less attractive and determine what strategy changes are needed to prepare for the impacts of the driving forces 67. (p. 80) Which of the following is not generally a "driving force" capable of producing fundamental changes in industry and competitive conditions? D. Ups and downs in the economy and in interest rates 68. (p. 80) Which of the following are most unlikely to qualify as driving forces? D. Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances 69. (p. 75) Increasing globalization of the industry can be a driving force because C. It tends to increase rivalry among industry members and often shifts the pattern of competition among an industry's major players, favoring some and disadvantaging others 70. (p. 74) Driving forces analysis A. Involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces 71. (p. 80) Driving forces analysis helps managers identify whether A. The combined impacts of the driving forces will act to increase/decrease market demand, increase/decrease competition and raise/lower industry profitability in the years ahead 72. (p. 80) An industry's driving forces B. Generally act in ways which will strengthen or weaken market demand, competition and industry profitability in future years 73. (p. 80) Which of the following do not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions? C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration and growing buyer-seller collaboration 74. (p. 80) In analyzing driving forces, the strategist's role is to A. Identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition and (3) industry profitability 75. (p. 80) Which one of the following is not an integral part of driving forces analysis? B. Determining whether the driving forces are acting to cause one or more industry rivals to shift to a different strategic group 76. (p. 80) Which of the following is most likely to qualify as a driving force? B. Wildly successful introduction of innovative new products by one or more industry rivals that force other rivals to respond quickly or lose a major share of their customers to the innovating rival(s) 77. (p. 80) Which one of the following is not a common type of driving force? D. Increasing efforts on the part of industry members to collaborate closely with their suppliers 78. (p. 82) A strategic group C. Is a cluster of industry rivals that have similar competitive approaches and market positions 79. (p. 82) A strategic group consists of those firms in an industry that D. Employ similar competitive approaches and occupy similar positions in the market 80. (p. 83) The concept of strategic groups is relevant to industry and competitive analysis because B. Strategic group maps help identify each company's market position and its closest competitors 81. (p. 82) In mapping strategic groups C. The best variables to use as axes for the map are those that differentiate how rivals have positioned themselves in the marketplace 82. (p. 82) Which of the following is not an appropriate guideline for developing a strategic group map for a given industry? C. The variables chosen as axes for the map should be highly correlated 83. (p. 84) With the aid of a strategic group map, one can E. Often learn to what extent (a) industry driving forces and competitive pressures favor some companies or groups and hurt others and (b) the profit potential of different strategic groups varies because of strengths and weaknesses in each strategic group's position 84. (p. 81) Strategic group mapping is a technique for displaying C. The different market or competitive positions that rival firms occupy in an industry and identifying each rival's closest competitors 85. (p. 82) Which one of the following pairs of variables is least likely to be useful in drawing a strategic group map? D. Level of profitability and size of market share 86. (p. 84) One of the things that can be gleaned from a strategic group map of industry rivals is D. Whether profit prospects vary from strategic group to strategic group due to strengths and weaknesses in their respective market positions on the map (perhaps because industry driving forces and competitive pressures are acting to favor some strategic groups and to disadvantage other groups) 87. (p. 85) The payoff of good scouting reports on rivals is improved ability to A. Anticipate what moves rivals are likely to make next, thereby providing a valuable assist in outmaneuvering them in the marketplace 88. (p. 85) Having good competitive intelligence about rivals' strategies, latest actions and announcements, resource strengths and weaknesses and moves to improve their situation is important because B. It helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals 89. (p. 85 - 86) Good competitive intelligence about the strategies and competitive strengths and weaknesses of rival companies helps management determine A. Which competitor has the best strategy and which competitors have flawed or weak strategies B. Which rivals are poised to gain market share and which seem destined to lose market share C. Which rivals are likely to rank among the industry leaders on the road ahead D. Which rivals are likely to initiate what kinds of fresh strategic moves and why E. All of these 90. (p. 86 - 87) In seeking to predict the next moves of close or key rivals, it is useful to consider such questions as: A. Which rivals badly need to increase their unit sales and market share and what new offensive initiatives are they likely to employ? B. Which rivals are poised to gain market share and which seem destined to lose market share? C. Which rivals are good candidates to be acquired? D. Which rivals are likely to enter new geographic markets or expand their product offerings (so as to enter new market segments where they currently do not have a presence)? E. All of these 91. (p. 87) The key success factors in an industry A. Are those competitive aspects that most affect industry members' abilities to prosper in the marketplace⎯the particular strategy elements, product attributes, resources, competencies, competitive capabilities and market achievements that spell the difference between being a strong competitor and a weak competitor 92. (p. 89) In identifying an industry's key success factors, strategists should B. Consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful and what shortcomings are almost certain to put a company at a significant competitive disadvantage 93. (p. 87 - 88) An industry's key success factors C. Can be determined from an analysis of an industry's dominant economic characteristics, what competition is like, the impacts of the driving forces, the comparative market positions of industry members and the likely next moves of industry rivals 94. (p. 88) Which of the following is not a good example of a marketing-related key success factor? A. Product R & D capabilities and expertise in product design 95. (p. 88) Which of the following is a good example of a manufacturing-related key success factor? B. High labor productivity (especially if the production process has high labor content) 96. (p. 90) Evaluating whether an industry's environment presents a company with a sufficiently attractive business opportunity involves A. Sizing up overall industry and competitive conditions to determine whether the industry's overall profit prospects are above average, average or below average 97. (p. 89) Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity? A. The industry's growth potential, whether competition appears destined to become stronger or weaker and whether the industry's overall profit prospects are above average, average or below average 98. (p. 89 - 90) Evaluating whether an industry presents a sufficiently attractive business opportunity usually does not involve a consideration of which of the following factors? E. Whether the industry's product is strongly or weakly differentiated 1. (p. 95) Which of the following is not one of the five questions that comprise the task of evaluating a company's resources and competitive position? A. What are the company's most profitable geographic market segments? 2. (p. 95) Which of the following is not a component of evaluating a company's resources and competitive position? B. Scanning the environment to determine a company's best and most profitable customers 3. (p. 95) The spotlight in analyzing a company's resources, internal circumstances and competitiveness includes such questions/concerns as D. What are the company's resource strengths and weaknesses and its external opportunities and threats 4. (p. 96) Which of the following is not pertinent in identifying a company's present strategy? C. The company's mission, strategic objectives and financial objectives 5. (p. 96) One important indicator of how well a company's present strategy is working is whether C. The company is achieving its financial and strategic objectives and whether it is an above-average industry performer 6. (p. 96) The best quantitative evidence of whether a company's present strategy is working well is C. The caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer 7. (p. 96 - 97) Which one of the following is not a reliable measure of how well a company's current strategy is working? B. Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product 8. (p. 97) Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called A. SWOT analysis 9. (p. 97) SWOT analysis is a powerful tool for A. Gauging whether a company has a cost competitive value chainB. Sizing up a company's resource capabilities and deficiencies, its market opportunities and the external threats to its future well-beingC. Evaluating whether a company is in the most appropriate strategic groupD. Determining a company's competitive strength vis-à-vis close rivalsE. Identifying the market segments in which a company is strongly positioned and weakly positioned 10. (p. 97) SWOT analysis D. Provides a good overview of whether a company's situation is fundamentally healthy or unhealthy 11. (p. 97) The payoff of doing a thorough SWOT analysis is E. Assisting strategy-makers in 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 AACSB: 3Difficulty: Medium
Taxonom
y: Com
prehension 12. (p. 108) Which one of the following is not part of conducting a SWOT analysis? B. Benchmarking the company's resource strengths and competitive capabilities against industry key success factors 13. (p. 107) The two most important parts of SWOT analysis are 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 14. (p. 108) The three steps of SWOT analysis are A. Identifying the company's resource strengths and weaknesses and its opportunities and threats, drawing conclusions about the company's overall situation and translating the conclusions into strategic action to improve the company's strategy 15. (p. 99 - 100) A company resource strength can concern A. A skill, specialized expertise or competitively important capability B. Valuable human assets and intellectual capital C. An achievement or attribute that puts the company in a position of market advantage D. Competitively valuable alliances or cooperative ventures E. All of these 16. (p. 99 - 100) Which of the following most accurately reflect a company's resource strengths? A. Its human, physical and/or organization assets; its skills and competitive capabilities; achievements or attributes that enhance the company's ability to compete effectively; and whether it is engaged in competitively valuable alliances or cooperative ventures 17. (p. 100) A company's resource strengths are important because B. They represent its competitive assets and are big determinants of its competitiveness and ability to succeed in the marketplace 18. (p. 100) A company's resource strengths C. Signal whether it has the wherewithal to be a strong competitor in the marketplace or whether its capabilities and competitive strengths are modest, thus relegating it to a trailing position in the industry 19. (p. 99 - 100) The best example of a company strength is C. Having proven technological expertise and ability to churn out new and improved products on a regular basis 20. (p. 99 - 100) Which of the following is not a good example of a company strength? A C. Having higher earnings per share and a higher stock price than key rivals 21. (p. 101) When a company has real proficiency in performing a com
petitively im
portant value chain activity, it is said to have B. A core competence 22. (p. 101) When a company is good at performing a particular internal activity, it is said to have E. A company competence 23. (p. 101) The difference between a company competence and a core competence is that D. A company competence represents real proficiency in performing an internal activity whereas a core competence is a competitively relevant activity which a firm performs better than other internal activities 24. (p. 101) The difference between a core competence and a distinctive competence is that C. A core competence is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs, whereas a distinctive competence is a competitively relevant activity which a firm performs especially well in comparison to other firms with which it competes 25. (p. 101) A core competence A. Adds to a company's arsenal of competitive capabilities and competitive assets and is a genuine resource strength 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 which a firm performs especially well in comparison to the other activities it performs E. All of the above 26. (p. 101) A core competence A. Gives a company competitive capability and is a genuine company strength and resource 27. (p. 101) When a company performs a particular competitively important activity truly well in comparison to its competitors, it is said to have C. A distinctive competence 28. (p. 101) Which of the following does not represent a potential core competence D. Having a wider product line than rivals 29. (p. 101 - 102) 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. Is a basis for sustainable competitive advantage D. Can underpin and add real punch to a compan