WPC 480 EXAM QUESTIONS AND ANSWERS
LATEST UPDATE (ALREADY GRADED A+)
Why is it better for firms to keep their vision statements customer-oriented rather than product-
oriented?
a. Customer-oriented visions tend to have a more short-range view of changing environments.
b. Customer-oriented visions tend to be more flexible when adapting to changing environments.
c. Customer-oriented visions tend to have a more myopic view of changing environments.
d. Customer-oriented visions tend to be more stable when dealing with changing environments.
b
Customer-oriented visions tend to be more flexible when adapting to changing environments.
A customer-oriented vision statement focuses employees to think about how best to:
a.increase their efficiency to benefit consumers.
b.make a product easier to use.
c.improve a popular product.
d.solve a problem for a consumer.
d
A customer-oriented vision statement focuses employees to think about how best to solve a problem for
a consumer.
What part of the AFI strategy framework does the question "How does the firm make money?" relate
to?
a. competitive advantage, firm performance, and business models
b. internal analysis
c. strategic leadership and the strategy process
d. external analysis
a
While completing the business model of the AFI strategy framework, a firm addresses the question: How
does the firm make money?
Rapida Inc. and Click Inc. are two companies that have been manufacturing typewriters for almost 30
years. Due to the reduced demand for typewriters today, both companies' average return on invested
capital is approximately -5 percent. The current industry average is 2 percent. In this scenario, Rapida
Inc. and Click Inc. most likely have
a. competitive parity with each other.
b. competitive advantage over other firms in their industry.
c. strategic alliance with each other.
d. economies of scope instead of economies of scale.
, a
In this scenario, Rapida Inc. and Click Inc. most likely have competitive parity with each other.
Competitive parity refers to the performance of two or more firms at the same level.
As the strategic manager of CutRite Scissors, you are tasked with producing a strategy for introducing
a new line of premium scissors. Your competitor produces a line of similar scissors at a cost of $1 and
sells them for $12. Because your company has inferior production capabilities, your scissors will cost
$3 each to produce. However, your handle is proven to be more comfortable than your competitors'.
Assuming you are guaranteed to sell the same number of units as your competitor, which of the
following strategies is most likely to achieve a competitive advantage?
a. Offer a buy-one-get-one-free sale on CutRite scissors.
b. Reduce the quality of materials used in CutRite scissors to bring unit costs down to $1, then sell the
scissors for $12.
c. Continue to produce CutRite scissors for $3 but set the price at $10.
d. Market CutRite scissors as a higher-quality alternative and sell them for $15.
d
By emphasizing the quality and comfort of CutRite scissors, you differentiate the product and create
superior value for customers. Although your scissors are more expensive to make at $3 each, the
increased perceived value of your product allows you to sell them for $15, making the difference
between value creation and cost greater than your competitor's. The greater the difference between
value creation and cost, the greater the firm's economic contribution and the more likely it will gain
competitive advantage.
The distribution department at Golden Grains Wheat Company has decided to adopt the FIFO (first in,
first out) method of inventory to dispatch its bags of wheat. Which of the following strategies does
this scenario best illustrate?
a. master strategy
b. corporate strategy
c. functional strategy
d. business strategy
c
The distribution department of Golden Grains has decided to implement a functional strategy. Within
each strategic business unit are various business functions: accounting, finance, human resources,
product development, operations, manufacturing, marketing, and customer service. Each functional
manager is responsible for decisions and actions within a single functional area.
Which of the following strategies best illustrates a generic business strategy?
a. a decision to computerize a firm's database in order to improve customer service
b. a decision to niche market the jewelry sold by a company while the apparel division under the same
company sells its products through mass marketing
c. a strategy to use monetary incentives to motivate employees working on a project
d. a cost-cutting strategy that corporate executives in the headquarters want all business units of a
large conglomerate to implement
LATEST UPDATE (ALREADY GRADED A+)
Why is it better for firms to keep their vision statements customer-oriented rather than product-
oriented?
a. Customer-oriented visions tend to have a more short-range view of changing environments.
b. Customer-oriented visions tend to be more flexible when adapting to changing environments.
c. Customer-oriented visions tend to have a more myopic view of changing environments.
d. Customer-oriented visions tend to be more stable when dealing with changing environments.
b
Customer-oriented visions tend to be more flexible when adapting to changing environments.
A customer-oriented vision statement focuses employees to think about how best to:
a.increase their efficiency to benefit consumers.
b.make a product easier to use.
c.improve a popular product.
d.solve a problem for a consumer.
d
A customer-oriented vision statement focuses employees to think about how best to solve a problem for
a consumer.
What part of the AFI strategy framework does the question "How does the firm make money?" relate
to?
a. competitive advantage, firm performance, and business models
b. internal analysis
c. strategic leadership and the strategy process
d. external analysis
a
While completing the business model of the AFI strategy framework, a firm addresses the question: How
does the firm make money?
Rapida Inc. and Click Inc. are two companies that have been manufacturing typewriters for almost 30
years. Due to the reduced demand for typewriters today, both companies' average return on invested
capital is approximately -5 percent. The current industry average is 2 percent. In this scenario, Rapida
Inc. and Click Inc. most likely have
a. competitive parity with each other.
b. competitive advantage over other firms in their industry.
c. strategic alliance with each other.
d. economies of scope instead of economies of scale.
, a
In this scenario, Rapida Inc. and Click Inc. most likely have competitive parity with each other.
Competitive parity refers to the performance of two or more firms at the same level.
As the strategic manager of CutRite Scissors, you are tasked with producing a strategy for introducing
a new line of premium scissors. Your competitor produces a line of similar scissors at a cost of $1 and
sells them for $12. Because your company has inferior production capabilities, your scissors will cost
$3 each to produce. However, your handle is proven to be more comfortable than your competitors'.
Assuming you are guaranteed to sell the same number of units as your competitor, which of the
following strategies is most likely to achieve a competitive advantage?
a. Offer a buy-one-get-one-free sale on CutRite scissors.
b. Reduce the quality of materials used in CutRite scissors to bring unit costs down to $1, then sell the
scissors for $12.
c. Continue to produce CutRite scissors for $3 but set the price at $10.
d. Market CutRite scissors as a higher-quality alternative and sell them for $15.
d
By emphasizing the quality and comfort of CutRite scissors, you differentiate the product and create
superior value for customers. Although your scissors are more expensive to make at $3 each, the
increased perceived value of your product allows you to sell them for $15, making the difference
between value creation and cost greater than your competitor's. The greater the difference between
value creation and cost, the greater the firm's economic contribution and the more likely it will gain
competitive advantage.
The distribution department at Golden Grains Wheat Company has decided to adopt the FIFO (first in,
first out) method of inventory to dispatch its bags of wheat. Which of the following strategies does
this scenario best illustrate?
a. master strategy
b. corporate strategy
c. functional strategy
d. business strategy
c
The distribution department of Golden Grains has decided to implement a functional strategy. Within
each strategic business unit are various business functions: accounting, finance, human resources,
product development, operations, manufacturing, marketing, and customer service. Each functional
manager is responsible for decisions and actions within a single functional area.
Which of the following strategies best illustrates a generic business strategy?
a. a decision to computerize a firm's database in order to improve customer service
b. a decision to niche market the jewelry sold by a company while the apparel division under the same
company sells its products through mass marketing
c. a strategy to use monetary incentives to motivate employees working on a project
d. a cost-cutting strategy that corporate executives in the headquarters want all business units of a
large conglomerate to implement
