Reference no: EM131417781

1 The game plan a company's management is using 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) strategic offensive for becoming a market leader.
B) business model.
C) long-term strategic direction.
D) mission statement.
E) strategy.

2 In crafting a strategy, management is making which of the following statements?
A) "This is where we are headed, this is our game plan for getting where we want to go, and this is how we intend to execute our plan successfully.''
B) "This is the current business plan we have for being a winner in the marketplace and our extensive analysis of the company's situation indicates it will work."
C) "This is how we are going to knock the socks off our competitors."
D) "Among all the paths we could have chosen, we have decided to focus on these markets and customer needs, compete in this fashion, allocate our resources and energies in these ways, and use these particular approaches to doing business."
E) "This is our current business plan, even though it will probably change and evolve as we react to new market conditions."

3 The central thrust of a company's strategy
A) is to make the company's business model work as planned.
B) is to produce good bottom-line results.
C) is to tilt the playing field in the company's favor and produce a sustainable competitive advantage over rivals.
D) is to destroy rivals in the marketplace and take substantial sales and market share away from them.
E) is to achieve the company's business mission.

4 Which of the following is not an aspect of a company's strategy?
A) Striving for a competitive edge over rivals
B) How to achieve targeted objectives
C) Making a profit
D) How to respond to changing market conditions
E) How to manage each functional piece of the business and develop needed organizational capabilities

5 Which of the following is not one of the most frequently used strategic approaches to building competitive advantage?
A) Striving for a competitive edge based on bigger profit margins
B) Developing expertise and resource strengths that rivals can't easily match
C) Striving to be the industry's low-cost provider
D) Focusing on a narrow market niche
E) Outcompeting rivals based on differentiating features

6 Which one of the following is not something to look for in trying to identify and understand what a company's strategy is?
A) Its actions to alter geographic coverage and its actions to form strategic alliances and collaborative partnerships
B) Its actions to merge with or acquire another company in order to strengthen the company's business position
C) Its actions to strengthen its resource base and competitive capabilities and its efforts to outcompete rivals and build competitive advantage
D) Its actions to revise the company's strategic vision and business model
E) The actions and approaches that define how a company manages such functions as R&D, production, sales and marketing, and finance

7 The actual strategy a company employs is
A) is known only to top-level managers and is kept hidden from outside view for reasons of competitive sensitivity.
B) usually deviates little from management's planned set of actions and business approaches since making on-the-spot changes is too risky.
C) pretty much like the strategies of other industry members since all companies are confronting much the same market conditions and competitive pressures.
D) seldom consistent with its business model because of ongoing changes in market conditions and competitive pressures.
E) partly proactive (in the sense of reflecting management's plans and intentions)and partly reactive to changing circumstances.

8 Company strategies evolve because
A) it is a bad idea to do too much strategizing until a company has been in business long enough to know what strategies will work best.
B) most managers like to develop the strategy in bits and pieces rather than all at once.
C) even a well-planned-out-in-advance strategy must be adapted to shifting market conditions, the fresh actions of competitors, altered customer needs and preferences, emerging opportunities and threats, unforeseen events, and new managerial thinking about how to improve the present strategy.
D) many managers are conservative, preferring to be late-movers in responding new developments and avoiding the risks associated with developing a complete strategy too quickly.
E) a strategy does not really transition to a well-crafted stage until a company has been trying to execute it for a number of years and has learned what works and what doesn't.

9 Crafting strategy calls for good entrepreneurship on the part of managers because
A) future market conditions are uncertain and company managers have to be risk-takers in dealing with this uncertainty
B) a company has to steer its business and its strategy in whatever new directions are dictated by changing buyer preferences, the latest actions of rivals, new technologies, the emergence of new market opportunities, and other newly-appearing market conditions.
C) good strategies cannot be imitative of what rivals are doing, which means that company managers must be innovative and develop a strategy that plows new ground.
D) the best strategies require really creative strategic thinking (which is what good entrepreneurs do best).
E) future market conditions are uncertain and good strategy-making under conditions of uncertainty require managers to be risk-averse and wary of deviating far from tried-and-true business approaches.

10 A company's strategy can be considered "ethical"
A) as long as all of its actions are legal and in compliance with governmental rules and regulations.
B) so long as its actions and behaviors can pass the test of "moral scrutiny" and none of its actions or behaviors are unsavory and cross the moral line from "can do" to "should not do."
C) so long as none of the company's stakeholders-customers, employees, shareholders, suppliers, and the communities in which the company operates-is unjustly injured by the company's actions.
D) so long as religious authorities find nothing "wrong" in the company's actions.
E) All of these.

11 Management's storyline for how and why the company's product offerings and competitive approaches will generate a revenue stream and have an associated cost structure that produces attractive earnings and returns on investment is
A) called a company's strategy.
B) referred to as a company's strategic intent.
C) referred to as a company's primary financial objective.
D) what a company's mission statement is all about.
E) referred to as a company's business model.

12 Which of the following statements about a company's strategy is false?
A) Normally, companies have a narrow window of strategic freedom in choosing the hows of strategy because all competitors are facing the same market conditions and competitive pressures and, therefore, have to cope with them using very similar strategies.
B) A company's strategy results in achieving sustainable competitive advantage when an attractive number of buyers prefer its products or services over the offerings of competitors and when the basis for this preference is durable.
C) A company's strategy is based partly on trial-and-error organizational learning about what has worked well and what hasn't.
D) A company's strategy and strategic moves are only partly the result of proactive plotting and management design.
E) A company's strategy is a work in progress, not a one-time management exercise.

13 Southwest's strategy (as described in Illustration Capsule 1.1) does not include which one of the following?
A) Growing the business by gradually adding more flights on existing routes and by initiating service to new airports
B) Making friendly service a company trademark
C) Encouraging customers to make reservations and purchase tickets at the company's Web site
D) Avoiding flying into congested airports
E) Having a very diverse fleet of aircraft, so as to better match aircraft size to the passenger traffic on each route.

14 Which of the following statements concerning Microsoft's business model and Red Hat Linux's business model (as discussed in Illustration Capsule 1.2) is false?
A) Microsoft has a proven business model while Red Hat Linux's business model is unproven.
B) Microsoft's business model involves employing a cadre of highly skilled programmers to develop proprietary code; keeping the source code hidden from customers/users, and locking them in to using Microsoft's proprietary software.
C) Most of Microsoft's costs arise on the front end in developing the software and are thus "fixed"; the variable costs of producing and packaging the CDs provided to users are only a couple of dollars per copy-once the breakeven volume is reached, Microsoft's revenues from additional sales are almost pure profit.
D) Red Hat relies on the collaborative efforts of volunteer programmers from all over the world who contribute bits and pieces of code to improve and polish the Linux system
E) Red Hat's business model is predicated on closely guarding its source code while Microsoft is a strong advocate of open or free source code.

15 Which of the following statements about a company's strategy is true?
A) Crafting an excellent strategy is more important than executing it well.
B) Managers at all companies face three central questions in thinking strategically about their company's present circumstances and prospects: Where are we now? Where do we want to go? How will we get there?
C) A company's strategy deals with whether the revenue-cost-profit economics of its business model demonstrate the viability of the business enterprise as a whole..
D) Masterful strategies come partly (maybe mostly) by doing things in much the same way as the industry leader but then being better than the leader in one particular area that counts heavily with buyers.
E) The hard fact is that most customers and most suppliers are relatively unconcerned whether a company they do business with engages in sleazy practices or turns a blind eye to below-board behavior on the part of employees.

16 The nitty-gritty issue surrounding a company's business model is whether
A) the strategy is capable of producing sustainable competitive advantage.
B) it matches the company's external and internal situation.
C) the chosen strategy makes good business sense from a money-making perspective.
D) the company's strategy and strategic moves are mostly proactive.
E) the company's strategy stands a really good chance of hitting a home-run in the marketplace.

17 A company's strategy is
A) driven partly by management analysis and choice and partly by the necessity of adapting and learning by doing.
B) temporary and on trial, awaiting new ideas for improvement on management's part, the appearance of market and competitive conditions that call for some kind of reaction and response, and any other changes in the company's situation that managers believe warrant strategy adjustments.
C) is less likely to produce a durable competitive edge over rivals if the strategy is based on having a distinctive product and more likely to produce a durable competitive edge over rivals if it is focused on building competitively valuable expertise and capabilities that are difficult for rivals to match.
D) revealed in part by its actions to gain sales and market share via lower prices, more performance features, more appealing design, better quality or customer service, wider product selection, and other competitive tactics.
E) All of the above.

18 A winning strategy is one that
A) makes the company a market leader, is ethically and socially responsible, and maximizes profits.
B) is highly profitable and boosts the company's market share.
C) passes the profitability test, the ethics and social responsibility test, the customer satisfaction test, and the shareholder wealth test.
D) fits the company's internal and external situation, builds sustainable competitive advantage, and boosts company performance.
E) passes the ethical standards test, the competitive advantage test, and the profitability test.

19 Crafting and executing strategy are top-priority managerial tasks because
A) how managers go about the tasks of crafting and executing strategy sends a message to shareholders and the entire investment community regarding "what it is we are trying to do and how we plan to achieve our objectives."
B) managerial decision-making is likely to be rudderless unless senior executives have a clear answer to "where are we headed, how do we plan to get there, and when do we expect to arrive?"
C) there is a compelling need for managers to proactively shape how the company's business will be conducted and because a strategy-focused organization is more likely to be a strong bottom-line performer.
D) without clear guidance as to what the company's business model and strategic intent are, managerial decision-making is likely to be rudderless.
E) a company is essentially rudderless if all it does is respond to changing market conditions, new technologies, new opportunities, and threatening moves on the part of competitors.

20 The most trustworthy signs of a well-managed company are
A) a strong emphasis on offensive strategies rather than defensive strategies.
B) a strategy matched to fast-evolving market conditions and bigger profit margins than rivals and a steady upward trend in net income.
C) attractive bottom-line performance and a proven business model.
D) good strategy-making combined with good strategy execution..
E) having a profitable business model, a willingness to change the company's business model whenever circumstances warrant, and a sustainable competitive advantage.