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1. The competitive power of a company resource st...

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1. The competitive power of a company resource strength is not measured by which one of the following tests? (Points : 1) Is the resource rare and something rivals lack? Is the resource strength something that a company does internally rather than in collaborative arrangements with outsiders? Is the resource strength easily trumped by the substitute resources/capabilities of rivals? Is the resource strength hard to copy? Is the resource strength competitively valuable, having the potential to contribute to a competitive advantage? 2. Relying on outsiders to perform certain value chain activities offers such strategic advantages as (Points : 1) obtaining higher quality and/or cheaper components or services. improving the company's ability to innovate by allying with "best-in-world" suppliers. reducing the company's risk exposure to changing technology and/or changing buyer preferences. increasing the firm's ability to assemble diverse kinds of expertise speedily and efficiently. All of the above. 3. The chief difference between a low-cost provider strategy and a focused low-cost strategy is (Points : 1) whether the product is strongly differentiated or weakly differentiated from rivals. the degree of bargaining power that buyers have. the size of the buyer group that a company is trying to appeal to. the type of value chain being used to achieve a low-cost competitive advantage. the number of upscale attributes incorporated into the product offering. 4. Managerial jobs with strategy-making responsibility (Points : 1) extend throughout the managerial ranks and exist in every part of a company-business units, operating divisions, functional departments, manufacturing plants, and sales districts. are primarily located in the strategic planning departments of large corporations. are relatively rare because most strategy-making is done by the members of a company's board of directors. seldom exist within a functional department (e.g., marketing and sales) or in an operating unit (a plant or a district office) because these levels of the organization structure are well below the level where strategic decisions are typically made. are found only at the vice-president level and above in most companies. 5. The big risk of employing an outsourcing strategy is (Points : 1) causing the company to become partially integrated instead of being fully integrated. hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success. hurting a company's R&D capability. putting the company in the position of being a late mover instead of an early mover. increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain. 6. What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is (Points : 1) the extra attention paid to top-notch product performance and product quality. their concentrated attention on serving the needs of buyers in a narrow piece of the overall market. greater opportunity for competitive advantage. their suitability for market situations where most industry rivals have weakly differentiated products. their objective of delivering more value for the money. 7. It is normal for a company's strategy to end up being (Points : 1) a blend of offensive actions on the part of managers to improve the company's profitability and defensive moves to counteract changing market conditions. a combination of conservative moves to protect the company's market share and somewhat more risky initiatives to set the company's product offering apart from rivals. a close imitation of the strategy employed by the recognized industry leader. 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. more a product of clever entrepreneurship than of efforts to clearly set a company's product/service offering apart from the offerings of rivals. 8. A company's strategy is most accurately defined as: (Points : 1) management's approaches to building revenues, controlling costs, and generating an attractive profit. the choices management has made regarding what financial plan to pursue. management's concept of "who we are, what we do, and where we are headed." the business model that a company's board of directors has approved for outcompeting rivals and making the company profitable. 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. 9. Multi-country competition is best characterized as a situation where (Points : 1) the competitive arena among rival companies involves several neighboring countries rather than either a single country or the world market as a whole. competition is mainly among the domestic companies of a few neighboring countries (five countries at most). there are extensive trade restrictions, sharply fluctuating exchange rates, and high tariff barriers in many country markets that work against the formation of a true world market. competition among domestic companies predominates and foreign competitors are a minor factor. there is no international or global market, just a collection of mostly self-contained country markets. 10. Mergers and acquisitions are often driven by such strategic objectives as to (Points : 1) expand a company's geographic coverage or extend its business into new product categories. reduce the number of industry key success factors. reduce the number of strategic groups in the industry. facilitate a company's shift from a low-cost leadership strategy to a focused low-cost strategy. lengthen a company's value chain and thereby put it in better position to deliver superior value to buyers. 11. Which of the following is not a relevant consideration in identifying an industry's dominant economic features? (Points : 1) Market size and growth rate, the geographic scope of competitive rivalry, and demand-supply conditions The extent to which economies of scale and learning/experience curve effects are present How many strategic groups the industry has and which ones are most profitable and least profitable The number and sizes of buyers, the number of rivals, and the pace of product innovation The prevalence of vertical integration and the pace of technological change 12. Diversification merits strong consideration whenever a single-business company (Points : 1) has integrated backward and forward as far as it can. is faced with diminishing market opportunities and stagnating sales in its principal business. has achieved industry leadership in its main line of business. encounters declining profits in its mainstay business. faces strong competition and is struggling to earn a good profit. 13. An end-game strategy in a stagnant or declining industry usually involves (Points : 1) stressing differentiation based on quality improvement and product innovation. either a fast-exit/sell-out quickly strategy or a slow exit strategy that involves a gradual phasing down of operations coupled with an objective of getting the most cash flow from the business. pursuing a focused strategy aimed at the fastest-growing or slowest-decaying market segments. becoming a lower-cost producer. initiating price cuts, boosting advertising, adding new features and more models, and stressing improved customer service so as to achieve strong product differentiation. 14. In the course of crafting a strategy, it is common for management to (Points : 1) decide to abandon certain strategy elements that have grown stale or become obsolete. 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. modify the current strategy in response to the fresh strategic maneuvers of rival firms. take proactive actions to improve this or that piece of the strategy. All of these. 15. Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous: (Points : 1) when high transportation costs make it expensive to operate from central locations. whenever buyer-related activities are best performed in locations close to buyers. if diseconomies of large size exist, thereby making it more economical to perform an activity on a smaller scale in several different locations. when it is desirable to hedge against (1) the risks of fluctuating exchange rates, (2) supply interruptions, or (3) adverse political developments. All of the above. 16. Which of the following is not an example of an external threat to a company's future profitability? (Points : 1) The lack of a distinctive competence New legislation that entails burdensome and costly government regulations Slowdowns in market growth More intense competitive pressures The introduction of restrictive trade policies in countries where the company does business 17. A company's strategic vision concerns (Points : 1) "who we are and what we do." why the company does certain things in trying to please its customers. management's storyline of how it intends to make a profit with the chosen strategy. a company's directional path and future product-market-customer-technology focus. what future actions the enterprise will likely undertake to outmaneuver rivals and achieve a sustainable competitive advantage. 18. The production emphasis of a company pursuing a broad differentiation strategy usually involves (Points : 1) a search for continuous cost reduction without sacrificing acceptable quality and essential features. strong efforts to be a leader in manufacturing process innovation. efforts to build-in whatever differentiating features that buyers are willing to pay for and striving for product superiority. aggressive pursuit of economies of scale and experience curve effects. developing a distinctive competence in zero-defect manufacturing techniques. 19. Best-cost provider strategies are appealing in those market situations where (Points : 1) diverse buyer preferences make product differentiation the norm and where many buyers are sensitive to both price and value. a company is positioned between competitors who have ultra-low prices and competitors who have top-notch products in terms of both quality and performance. buyers are more quality-conscious than price-conscious. there are numerous buyer segments, buyer needs are diverse across these segments, only a few of the segments are growing rapidly, and seller's products are strongly differentiated. buyers are more performance conscious than value conscious. 20. Which of the following does not accurately characterize the differences between a localized multicountry strategy and a global strategy? (Points : 1) A global strategy entails extensive strategy coordination across countries and a multicountry strategy entails little or no strategy coordination across countries. A global strategy often entails use of the best suppliers from anywhere in the world whereas a multicountry strategy may entail fairly extensive use of local suppliers (especially where use of local sources is required by host governments). A global strategy tends to involve use of similar distribution and marketing approaches worldwide whereas a multicountry strategy often entails adapting distribution and marketing to local customs and the culture of each country. A global strategy involves striving to be the global low-cost provider by economically producing and marketing a mostly standardized product worldwide whereas a multicountry strategy entails pursuing broad differentiation and striving to strongly differentiate its products in one country from the products it sells in other countries. A global strategy relies upon the same technologies, competencies, and capabilities worldwide whereas a multicountry strategy often entails the use of somewhat different technologies, competencies, and capabilities as may be needed to accommodate local buyer tastes, cultural traditions, and market conditions. 21. Which of the following is not a factor that causes buyer bargaining power to be stronger? (Points : 1) Some buyers are a threat to integrate backward into the business of sellers and become an important competitor. The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities. Buyers have considerable discretion over whether and when they purchase the product. Buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs. The costs incurred by buyers in switching to competing brands or to substitute products are relatively low. 22. A company's competitive strategy deals with (Points : 1) management's game plan for competing successfully-the specific efforts to please customers, offensive and defensive moves to counter the maneuvers of rivals, the responses to current market conditions, and the initiatives undertaken to improve the company's market position. what its strategy will be in such functional areas as R&D, production, sales and marketing, distribution, finance and accounting, and so on. its efforts to change its position on the industry's strategic group map. its plans for entering into strategic alliances, utilizing mergers or acquisitions to strengthen its market position, outsourcing some in-house activities to outside specialists, and integrating forward or backward. its plans for overcoming the five competitive forces. 23. A turbulent or fast-changing industry environment is characterized by (Points : 1) rapid entry and exit of participating firms (there's an unusually high competitor turnover rate compared to other industries). the need for industry members to change to radically different strategies several times a year (company strategies have a very short life). the rapid appearance and disappearance of industry driving forces (such that the industry is in constant turmoil). rapid technological change, short product life cycles, the entry of important new rivals, lots of competitive maneuvering by rivals, and fast-evolving customer requirements and expectations (all occurring in a manner that creates swirling market conditions). All of these. 24. Developing a strategic vision for a company entails (Points : 1) prescribing a strategic direction for the company to pursue and a rationale for why this strategic path makes good business sense. describing its business model and the kind of value that it is trying to deliver to customers. putting together a story line of why the business will be a moneymaker. describing "who we are and what we do." coming up with a long-term plan for outcompeting rivals and achieving a competitive advantage. 25. Entering into strategic alliances and collaborative partnerships can be competitively valuable because (Points : 1) working closely with outsiders is essential in developing new technologies and new products in virtually every industry. cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology. they represent highly effective ways to achieve low-cost leadership and capture first-mover advantages. they are a powerful way for companies to build loyalty and goodwill among customers with diverse needs and expectations. they are quite effective in helping a company transfer the risks of threatening external developments to other companies. 26. The central strategy-making challenge in a turbulent market environment is (Points : 1) remaining the industry's first-mover. building stronger supply chain alliances than rivals. managing change. deciding when to cut prices versus when to improve product features and performance. how often to change the company's business model without impairing profitability. 27. Achieving a cost advantage over rivals entails (Points : 1) concentrating on the primary activities portion of the value chain and outsourcing all support activities. being a first-mover in pursuing backward and forward integration and controlling as much of the industry value chain as possible. performing value chain activities more cost-effectively than rivals and finding ways to eliminate or bypass some cost-producing activities altogether. minimizing R&D expenses and paying below-average wages and salaries to conserve on labor costs. producing a standard product, redesigning the product infrequently, and having minimal advertising. 28. One of the keys to successful strategy-making is (Points : 1) to come up with one or more strategy elements that act as a magnet to draw customers and yield a lasting competitive edge. to aggressively pursue all of the growth opportunities the company can identify. to develop a product/service with more innovative performance features than what rivals are offering and to provide customers with better after-the-sale service. to come up with a business model that enables a company to earn bigger profits per unit sold than rivals. to charge a lower price than rivals and thereby win sales and market share away from rivals. 29. Outsourcing strategies (Points : 1) are nearly always a more attractive strategic option than merger and acquisition strategies. carry the substantial risk of raising a company's costs. carry the substantial risk of making a company overly dependent on its suppliers. increase a company's risk exposure to changing technology and/or changing buyer preferences. involve farming out value chain activities presently performed in-house to outside specialists and strategic allies. 30. The best strategic alliances (Points : 1) are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit. are those whose purpose is to create an industry key success factor. are those which help a company move quickly from one strategic group to another. involve joining forces in R&D to develop new technologies cheaper than a company could develop the technology on its own. aim at raising an industry's barriers to entry. 31. A broad differentiation strategy works best in situations where (Points : 1) 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. 32. Companies racing for global market leadership (Points : 1) generally have to consider establishing competitive positions in the markets of emerging countries. are well-advised to avoid all the risks and problems of competing in emerging country markets. seldom have the resource capabilities it takes to be effective in competing in emerging country markets and usually are at a strong competitive disadvantage to the domestic market leaders. can usually be expected to earn sizable profits quickly in emerging country markets. usually encounter very low barriers in entering the markets of emerging countries. 33. Which of the following is not an option for remedying a cost disadvantage associated with activities performed by forward channel allies (wholesale distributors and retail dealers)? (Points : 1) Shifting to a more economical distribution strategy such as putting more emphasis on cheaper distribution channels (perhaps direct sales via the Internet) or perhaps integrating forward into company-owned retail outlets Trying to make up the difference by cutting costs earlier in the value chain Pressuring distributors-dealers and other forward channel allies to reduce their costs and markups so as to make the final price to buyers more competitive with the prices of rivals Insisting on across-the-board cost cuts in all value chain activities-those performed by suppliers, those performed in-house, and those performed by distributors-dealers Working closely with forward channel allies to identify win-win opportunities to reduce costs 34. In a single-business company, the strategy-making hierarchy consists of (Points : 1) business strategy, divisional strategies, and departmental strategies. business strategy, functional strategies, and operating strategies. business strategy and operating strategy. managerial strategy, business strategy, and divisional strategies. corporate strategy, divisional strategies, and departmental strategies. 35. An industry's driving forces (Points : 1) are generally determined by the sizes of strategic groups and the power of rival firms' competitive strategies. generally act in ways which will strengthen or weaken market demand, competition, and industry profitability in future years. frequently cause a reduction in the bargaining power of buyers. are normally triggered by ups and downs in the economy, higher or lower interest rates, or important new strategic alliances. can be triggered by such factors as growing competitive pressures from substitute products, and the efforts of rival firms to employ new or different offensive strategies. 36. Assessments of the long-term attractiveness of each industry represented in a diversified company's lineup of businesses should be based on (Points : 1) a complete value-chain analysis of each industry. whether the industries have the same kinds of driving forces. how many companies in each industry are making money and how many are losing money. quantitative industry attractiveness scores derived from rating each industry on several relevant attractiveness measures (weighted according to their relative importance in determining overall attractiveness). the competitive advantage potential offered by each industry's key success factors. 37. A diversified company that leverages the strategic fits of its related businesses into competitive advantage (Points : 1) has a distinctive competence in its related businesses. has a clear path to achieving 1 + 1 = 3 gains in shareholder value. has a clear path to global market leadership in the industries where it has related businesses. passes the value chain test and the profit expectations test for building shareholder value. achieves economies of scope and passes the reduced-costs test for crafting a diversification strategy capable of creating added shareholder value. 38. A company's strategy and its quest for competitive advantage are tightly connected because (Points : 1) without a competitive advantage a company cannot become the industry leader. without a competitive advantage a company cannot have a profitable business model. 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. a competitive advantage is what enables a company to achieve its strategic objectives. how a company goes about trying to please customers and outcompete rivals is what enables senior managers choose an appropriate strategic vision for the company. 39. The competitive advantage of a best-cost provider is (Points : 1) having the best value chain in the industry. its brand name reputation. its capability to incorporate upscale attributes at lower costs than rivals whose products have similar upscale attributes. a distinctive competence in delivering top-notch quality and customer service. a distinctive competence in supply chain management. 40. A company's business model (Points : 1) zeros in on how and why the business will generate revenues sufficient to cover costs and produce attractive profits and return on investment. is management's storyline for how the strategy will result in achieving the targeted strategic objectives. details the ethical and socially responsible nature of the company's strategy. explains how it intends to achieve high profit margins. sets forth the actions and approaches that it will employ to achieve market leadership.

 

Paper#8939 | Written in 18-Jul-2015

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