0974 Practice Midterm F13 PDF

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F13 Midterm Student: ___________________________________________________________________________ 1. The heart and soul of a company's strategy-making effort: A. is figuring out how to become the industry's low-cost provider. B. is figuring out how to maximize the profits and shareholder value. C. concerns how to improve the efficiency of its business model. D. deals with how management plans to maximize profits while simultaneously operating in a socially responsible manner that keeps the company's prices as low as possible. E. involves coming up with moves and actions that produce a durable competitive edge over rivals.

2. A company's strategy evolves over time as a consequence of: A. the need to keep strategy in step with changing circumstances, 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.

3. 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. B. Developing a proven business model, deciding on the company's strategic intent, and crafting a strategy. C. Setting objectives, crafting a strategy, implementing and executing the chosen strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage. D. Coming up with a statement of the company's mission and purpose, setting objectives, choosing what business approaches to employ, selecting a business model, and monitoring developments. E. Deciding on the company's strategic intent, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ.

4. Which of the following ARE common shortcomings of company vision statements? A. Too specific, too inflexible, and can't be achieved in five years. B. Unrealistic, unconventional, and un-businesslike. C. Too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on superlatives. D. Too broad, too narrow, and too risky. E. Not customer-driven, out of step with emerging technological trends, and too ambitious.

5. Corporate strategy for a diversified or multibusiness enterprise: A. is orchestrated by senior corporate executives and focuses on how to create a competitive advantage in each specific line-of-business the total enterprise is in. B. concerns how best to allocate resources across the departments of each line of business the company is in. C. is orchestrated by 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 and the means of capturing cross-business synergies and turning them into competitive advantages. D. deals chiefly with what the strategic intent of each of its business units should be. E. involves how functional strategies should be aligned with business strategies in each of the various lines of business the company is in.

6. Which of the following is generally NOT considered a barrier to entry? A. The reaction of incumbent firms to rapid market growth B. High capital requirements and restrictive government policies C. Strong brand preferences and a high degree of customer loyalty D. Cost advantages due to the economies of scale in production enjoyed by incumbent firms E. Strong "network effects" in customer demand

7. Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on: A. the degree to which buyers have any bargaining preferences and the extent to which buyers are price-sensitive. B. how many buyers are engaged in collaborative partnerships with sellers. C. whether entry barriers are high or low and the size of the pool of likely entry candidates. D. whether the overall quality of the items being furnished by industry members is rising or falling. E. whether demand-supply conditions represent a buyer's market or a seller's market.

8. Just how strong the competitive pressures are from substitute products depends on: A. whether the substitutes are strongly or weakly differentiated and whether the relative frequency of buyer purchases is high or low. B. whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes. C. whether the available substitutes are products or services. D. whether the producers of substitutes have ample budgets for new product R&D. E. the speed with which buyer needs and expectations are changing.

9. For a particular company resource/capability to have real competitive power and perhaps qualify as a basis for competitive advantage, it should: A. be hard to copy, be rare and something rivals lack, be competitively valuable, and not be easily trumped by substitute resource strengths possessed by rivals. B. be something that a company does internally rather than in collaborative arrangements with outsiders. C. be patentable. D. be an industry key success factor and occupy a prime position in the company's value chain. E. have the potential for lowering the firm's unit costs.

10. A company requires a dynamically evolving portfolio of resources and capabilities to: A. assist the strategic planning team in overall direction. B. sustain complex manufacturing systems as a strategic recall. C. sustain its competitiveness and help drive improvements in its performance. D. sustain benefits of high market share as an interest in growth strategies. E. transform knowledge into a management style supporting competition in a globally diverse world.

11. For a company to have competitively potent resources and capabilities, they must: A. be in sync with changes in the company's own strategy. B. be in sync with its efforts to achieve a resource-based competitive advantage. C. fully support company efforts to attract customers. D. combat competitors' newly launched offensives to win bigger sales and market shares. E. All of these.

12. Which of the following is NOT one of the five generic types of competitive strategy? A. A low-cost provider strategy B. A broad differentiation strategy C. A best-cost provider strategy D. A focused low-cost provider strategy E. A market share dominator strategy

13. Success in achieving a low-cost edge over rivals comes from: A. strong efforts to be a leader in manufacturing process innovation. B. communicating the product's ability to serve the customer's every need. C. employing an aggressive offense to gain market share or a conservative defense to D. protecting its market position. E. out-managing rivals in finding ways to perform value chain activities faster, more accurately, and more cost efficiently.

14. Easy-to-copy differentiating features: A. cannot produce sustainable competitive advantage. B. seldom are perceived by buyers as having much value. C. tend to give buyers a high degree of power in bargaining for a lower price. D. should never be incorporated in a company's product offering if its differentiation strategy is to succeed. E. lead to vigorous price competition.

15. What does the scope of the firm refer to? A. The range of activities the firm performs externally and its social responsibility activities B. To gain competitive advantage based on where it locates its various value chain activities C. The firm's capability to employ vertical integration strategies D. The range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses E. To prevent foreign competition from affecting the market

16. The two best reasons for investing company resources in vertical integration (either forward or backward) are to: A. expand into foreign markets and/or control more of the industry value chain. B. broaden the firm's product line and/or avoid the need for outsourcing. C. gain a first-mover advantage over rivals in revamping the industry value chain. D. add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability. E. achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain a greater ability to reduce internal operating costs.

17. A company that fails in managing their strategic alliance probably has not: A. incorporated contractual safeguards. B. made opportunities for learning a routine management process. C. created a system to manage alliances in a systematic fashion. D. established strong interpersonal relationships and established trust. E. All of these.

18. Which of the following is the role played by local managers within experienced multinational companies? A. To contribute needed understanding of local market conditions, local buying habits, and local ways of doing business. B. To run the local operations for the company. C. To understand how "the system" works to detour the hazards of collaborative alliances with local companies. D. To serve as conduits for the flow of information between the corporate office and local operations. E. All of these.

19. A "think global, act global" approach to strategy-making is preferable to a "think local, act local" approach when: A. a big majority of the company's rivals are pursuing localized multidomestic strategies. B. country-to-country differences are small enough to be accommodated with the framework of a mostly uniform global strategy. C. plants need to be scattered across many countries to avoid high shipping costs. D. market growth rates vary considerably from country to country. E. host governments enact regulations requiring that products sold locally meet strict manufacturing specifications or performance standards.

20. Companies operating in an international marketplace have to respond to: A. whether to customize their offerings in each different country market to match the tastes and preferences of local buyers. B. whether to pursue a strategy of offering a mostly standardized product worldwide. C. how much to customize their offerings in each different country market to match the tastes and preferences of local buyers. D. the tensions between market pressures to localize a company's product offerings country by country and the competitive pressures to lower costs through greater product customization. E. All of these.

21. Identify and briefly describe five common barriers to entering an industry.

22. Identify at least three indicators of whether a company's present strategy is working well.

23. Under what sorts of circumstances are horizontal mergers and/or acquisitions of other companies a better solution than entering into partnerships or alliances with these companies? How do mergers and/or acquisitions contribute to enhancing a company's position?

24. Discuss in some detail the difference between a multidomestic strategy and a global strategy. Give the pros and cons of each.

F13 Midterm Key

1. The heart and soul of a company's strategy-making effort: A. is figuring out how to become the industry's low-cost provider. B. is figuring out how to maximize the profits and shareholder value. C. concerns how to improve the efficiency of its business model. D. deals with how management plans to maximize profits while simultaneously operating in a socially responsible manner that keeps the company's prices as low as possible. E. involves coming up with moves and actions that produce a durable competitive edge over rivals.

AACSB: Analytic Blooms: Understand Difficulty: 1 Easy Learning Objective: 01-02 Grasp the concept of a sustainable competitive advantage. Thompson - Chapter 01 #13 Topic: What Do We Mean by Strategy?

2. A company's strategy evolves over time as a consequence of: A. the need to keep strategy in step with changing circumstances, 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.

AACSB: Analytic Blooms: Understand Difficulty: 1 Easy Learning Objective: 01-04 Understand that a companys strategy tends to evolve over time because of changing circumstances and ongoing management efforts to improve the companys strategy. Thompson - Chapter 01 #23 Topic: What Do We Mean by Strategy?

3. 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. B. Developing a proven business model, deciding on the company's strategic intent, and crafting a strategy. C. Setting objectives, crafting a strategy, implementing and executing the chosen strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage. D. Coming up with a statement of the company's mission and purpose, setting objectives, choosing what business approaches to employ, selecting a business model, and monitoring developments. E. Deciding on the company's strategic intent, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ.

AACSB: Analytic Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Grasp why it is critical for company managers to have a clear strategic vision of where a company needs to head and why. Thompson - Chapter 02 #5 Topic: Task 1: Developing a Strategic Vision, a Mission Statement, and a Set of Core Values

4. Which of the following ARE common shortcomings of company vision statements? A. Too specific, too inflexible, and can't be achieved in five years. B. Unrealistic, unconventional, and un-businesslike. C. Too broad, vague or incomplete, bland/uninspiring, not distinctive, and too reliant on superlatives. D. Too broad, too narrow, and too risky. E. Not customer-driven, out of step with emerging technological trends, and too ambitious.

AACSB: Analytic Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Grasp why it is critical for company managers to have a clear strategic vision of where a company needs to head and why. Thompson - Chapter 02 #22 Topic: Task 1: Developing a Strategic Vision, a Mission Statement, and a Set of Core Values

5. Corporate strategy for a diversified or multibusiness enterprise: A. is orchestrated by senior corporate executives and focuses on how to create a competitive advantage in each specific line-of-business the total enterprise is in. B. concerns how best to allocate resources across the departments of each line of business the company is in. C. is orchestrated by 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 and the means of capturing cross-business synergies and turning them into competitive advantages. D. deals chiefly with what the strategic intent of each of its business units should be. E. involves how functional strategies should be aligned with business strategies in each of the various lines of business the company is in.

AACSB: Analytic Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-03 Understand why the strategic initiatives taken at various organizational levels must be tightly coordinated to achieve companywide performance targets. Thompson - Chapter 02 #67 Topic: Task 3: Crafting a Strategy

6. Which of the following is generally NOT considered a barrier to entry? A. The reaction of incumbent firms to rapid market growth B. High capital requirements and restrictive government policies C. Strong brand preferences and a high degree of customer loyalty D. Cost advantages due to the economies of scale in production enjoyed by incumbent firms E. Strong "network effects" in customer demand

AACSB: Analytic Blooms: Understand Difficulty: 1 Easy Learning Objective: 03-02 Gain command of the basic concepts and analytical tools widely used to diagnose the competitive conditions in a companys industry. Thompson - Chapter 03 #33 Topic: Question 2: How Strong Are the Industrys Competitive Forces?

7. Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on: A. the degree to which buyers have any bargaining preferences and the extent to which buyers are price-sensitive. B. how many buyers are engaged in collaborative partnerships with sellers. C. whether entry barriers are high or low and the size of the pool of likely entry candidates. D. whether the overall quality of the items being furnished by industry members is rising or falling. E. whether demand-supply conditions represent a buyer's market or a seller's market.

AACSB: Analytic Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-02 Gain command of the basic concepts and analytical tools widely used to diagnose the competitive conditions in a companys industry. Thompson - Chapter 03 #58 Topic: Question 2: How Strong Are the Industrys Competitive Forces?

8. Just how strong the competitive pressures are from substitute products depends on: A. whether the substitutes are strongly or weakly differentiated and whether the relative frequency of buyer purchases is high or low. B. whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes. C. whether the available substitutes are products or services. D. whether the producers of substitutes have ample budgets for new product R&D. E. the speed with which buyer needs and expectations are changing.

AACSB: Analytic Blooms: Understand Difficulty: 1 Easy Learning Objective: 03-02 Gain command of the basic concepts and analytical tools widely used to diagnose the competitive conditions in a companys industry. Thompson - Chapter 03 #45 Topic: Question 2: How Strong Are the Industrys Competitive Forces?

9. For a particular company resource/capability to have real competitive power and perhaps qualify as a basis for competitive advantage, it should: A. be hard to copy, be rare and something rivals lack, be competitively valuable, and not be easily trumped by substitute resource strengths possessed by rivals. B. be something that a company does internally rather than in collaborative arrangements with outsiders. C. be patentable. D. be an industry key success factor and occupy a prime position in the company's value chain. E. have the potential for lowering the firm's unit costs.

AACSB: Analytic Blooms: Understand Difficulty: 1 Easy Learning Objective: 04-02 Understand why a companys resources and capabilities are central to its strategic approach and how to evaluate their potential for giving the company a competitive edge over rivals. Thompson - Chapter 04 #43 Topic: Question 2: What Are the Companys Competitively Important Resources and Capabilities?

10. A company requires a dynamically evolving portfolio of resources and capabilities to: A. assist the strategic planning team in overall direction. B. sustain complex manufacturing systems as a strategic recall. C. sustain its competitiveness and help drive improvements in its performance. D. sustain benefits of high market share as an interest in growth strategies. E. transform knowledge into a management style supporting c...