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.
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
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.
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
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.
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).
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.
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.
All of these.
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
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?
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.
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.
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.
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.
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.
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.
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.
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.
1. Examples of important cost drivers in a company's value chain do not include:
learning and experience.
production technology and design.
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.
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.
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.
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.
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.
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.