Competitive Strategy
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Course Introduction
Competitive Strategy explores the frameworks and analytical tools essential for understanding and shaping the competitive dynamics of markets. Students will examine how firms achieve and sustain competitive advantage through strategic positioning, resource allocation, and innovation. The course delves into industry analysis, game theory, and the core principles behind rivalry among firms, focusing on both offensive and defensive strategic moves. Through case studies and real-world examples, participants will develop skills to assess competitive environments, anticipate competitor behavior, and formulate effective strategies that lead to long-term organizational success.
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Strategy 4th Edition by Bob de Wit
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Page 2
Chapter 1: What is Strategy
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Sample Questions
Q1) Strategic thinking is an activity that:
A) Involves shareholders shaping the way strategic leaders create strategy
B) Involves assessing the internal strengths of an organization
C) Involves pursuing a competitive advantage within an industry
D) Involves managers considering how they should organize their thinking to achieve a successful strategic reasoning process
Answer: D
Q2) Strategic thinking involves organizations embracing the past,present and future.
A)True
B)False
Answer: True
Q3) Strategic management includes a process by which organizations analyze and learn from their internal and external environments.
A)True
B)False
Answer: True
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Chapter 2: Strategic Objectives
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Sample Questions
Q1) Key performance indicators (KPIs)are:
A) The same as CSFs
B) Unrelated to CSFs
C) Lower level incremental targets
D) Determined by competitor activity
Answer: C
Q2) It has been suggested that the business definition question should include not only "What is our business?" but also "What was our business?"
A)True
B)False
Answer: False
Q3) The four perspectives of the balanced scorecard include a financial perspective,a customer perspective,an internal business processes perspective,and:
A) A marketing and brand perspective
B) A communications perspective
C) A learning and growth perspective
D) None of the above
Answer: C
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Chapter 3: Governance,Ethics & Corporate Social Responsibility
in Strategy
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Sample Questions
Q1) With regards to the link between CSR and economic performance:
A) There is no conclusive evidence of a direct, positive link between CSR and economic performance
B) Some studies report a positive relationship
C) Some studies find a negative relationship or no relationship
D) All of the above
Answer: D
Q2) Firms pursuing a reactive CSR strategy actively participate in policy discussions,build alliances with stakeholder groups,and voluntarily go beyond what the regulations require.
A)True
B)False
Answer: False
Q3) Nearly all CSR advocates argue for a revival of socialism in the world.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Culture and Strategy
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Q1) What are the four most important manifestations of culture?
Q2) Having an organizational culture means that sub-cultures do not arise.
A)True
B)False
Q3) Although organizational cultures vary considerably,one cannot make an objective judgment that some organizational cultures are more or less functional than others.
A)True
B)False
Q4) Culture is closely associated with power and can be such a strong force that overlooked,strategy implementation may not happen.
A)True
B)False
Q5) An organization culture is constituted by a shared belief system that is emotionally charged as it encompasses the values and norms of its members and offers them an interpretive filter through which they make sense of what is around them.
A)True
B)False
Q6) What are the three power aspects of organizational culture?
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Chapter 5: The Internal Environment
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Sample Questions
Q1) A sustained competitive advantage can last since not all advantages eventually erode.
A)True
B)False
Q2) Causal ambiguity refers to the difficulty of identifying the outcomes of causal determinants.
A)True
B)False
Q3) Capabilities of an organization emerge spontaneously through the interaction of tangible and intangible resources.
A)True
B)False
Q4) Imitation is not likely to be a successful strategy.
A)True
B)False
Q5) According to the resource-based view of the firm:
A) Strategies are neither deliberate nor emergent
B) Competitors may all develop the same competitive strength
C) The environment offers significant challenges to be overcome
D) Organizations are bundles of resources
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Chapter 6: The External Environment
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Q1) Explain why it is important for organizations to analyze and understand the external environment.
Q2) High entry barriers often result in green-field entries as opposed to acquisitions.
A)True
B)False
Q3) According to Porter,when do customers exhibit a powerful force on competition in an industry?
Q4) A collection of companies in an industry that tend to focus on the same subsets of key success factors is called a(n):
A) Business guild
B) Trade association
C) Strategic group
D) Organizational herd
Q5) The political/legal segment of an environment represents:
A) The political preferences of different ethnic groups in the society
B) The technological values of different political entities in society
C) How organizations and governments mutually try to influence each other
D) The system of regulations governments at all levels place on businesses
Q6) Describe the factors that raise the competitive nature of an industry's rivalry.
8
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Chapter 7: Business-Level Strategy
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Q1) For a differentiation strategy to be considered successful:
A) The organization that is pursuing the differentiation must be highly innovative
B) Customers must be willing to pay more for the uniqueness of a product or service than the firm paid to create that uniqueness
C) Loss of sales cannot reduce the benefits from economies of scale
D) The organization must invest heavily in differentiating its products
Q2) The biggest risk to a focus strategy is that the small market that is being targeted will simply disappear should the environment change.
A)True
B)False
Q3) Business-level strategy formulation pertains to:
A) Domain direction and navigation
B) Domain definition
C) Domain recognition
D) Domain precondition
Q4) Define strategy and business-level strategy. What is the difference between these two concepts?
Q5) What are some of the risks associated with a low-cost strategy?
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Chapter 8: Corporate-Level Strategy
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Sample Questions
Q1) Most acquisitions are financially beneficial to the shareholders of the acquiring firm.
A)True
B)False
Q2) Related diversification differs from unrelated diversification in which of the following ways?
A) Related diversification is connected to the organization's dominant business; unrelated diversification is not
B) Unrelated diversification is connected to the organization's dominant business; related diversification is not
C) Single business firms use related diversification and never use unrelated diversification
D) Single business firms use unrelated diversification and never use related diversification
Q3) The growth motivation for diversification is driven,in part,by the desire of managers to preside over a larger firm.
A)True
B)False
Q4) Explain the major corporate-level strategy formulation responsibilities.
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Chapter 9: International Strategy
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Q1) International strategies are complex and can therefore produce greater uncertainty for the firm.
A)True
B)False
Q2) International associations such as the European Union,the Organization of American States,and the North American Free Trade Association encourage regionalization of competition rather than globalization.
A)True
B)False
Q3) Which of the following best describes foreign direct investment (FDI)?
A) A firm's direct investment in production and/or service activities abroad.
B) The purchase of foreign securities by people from outside of the country.
C) Investment into any firm by someone who is not resident in the country.
D) Avoidance of brokers or other financial intermediaries when making foreign investments.
Q4) Having valuable,unique,and hard to imitate capabilities may be advantageous in doing business globally.However,what is the problem with trying to maintain that advantage?
Q5) Identify and describe the major risks of international diversification.
Q6) What are the motives for firms who pursue international diversification?
Page 11
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Chapter 10: Competitive Rivalry & Competitive Dynamics
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Sample Questions
Q1) In Japan and the EU,crisis cartels:
A) Involve firms in an industry facing a severe crisis
B) Are legally allowed
C) A and B above
D) Are cartels that are creating a crisis
Q2) A strategy's success is determined not only by the firm's initial competitive actions but also by how well it anticipates competitors' responses to them and by how well the firm anticipates and responds to its competitors initial actions.
A)True
B)False
Q3) The chief disadvantage of being a first mover is the:
A) High degree of risk
B) High level of competition in the new marketplace
C) Inability to earn above-average returns unless the production process is very efficient
D) Difficulty of obtaining new customers
Q4) Why are cooperative strategies often used when firms pursue international strategies and what are the advantages and disadvantages of international cooperative strategies?
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Chapter 11: Strategic Leadership
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Sample Questions
Q1) The traditional view of leaders in organizations is that they:
A) Are dictators to be followed without question
B) Set direction, make the important decisions, and rally the followers
C) Rise to the top of an organization just like cream on milk
D) Are ineffective
Q2) Guiding an organization through the combination of dynamic challenges from the general environment,aggressive competitors,demanding customers,and other stakeholders is a process that is scientific and requires very little,if any,"art."
A)True
B)False
Q3) In the context of strategic management,a leader is someone who by influencing others has an ability to take the organization forward to a common purpose.
A)True
B)False
Q4) Identify some of the core responsibilities of strategic leadership.
Q5) Identify some of the typical strategic leadership misjudgements Charan and Colvin (1999)highlight.
Q6) What factors do visionary leadership generally demonstrate?
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Chapter 12: Strategic Failure and Turnaround
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Q1) Turnaround strategies are designed to:
A) Reposition the organization.
B) Bring quick results and contribute towards long term growth.
C) Enable management rotation.
D) Develop a feeling of unease among managers.
Q2) Identify the warning signals a small organization may show when it is suffering from weak strategic leadership.
Q3) Organizational failure can sometimes occur just through the greed of dominant leaders.
A)True
B)False
Q4) What should organizations do with stakeholders that have a large influence on environmental uncertainty?
A) Fight against them with competitive weapons
B) Ignore them
C) Just monitor their activities
D) Partner with them
Q5) What competitive forces could result in a weak competitor being in decline?
Q6) What are the main features of a sustained recovery?
Q7) What are the key issues when selecting a divestment candidate?
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Chapter 13: Strategic Change
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Q1) When the time span for the implementation of change is long,the speed of change needs to be high.
A)True
B)False
Q2) The amplitude of change refers to the breadth of change in an organization.
A)True
B)False
Q3) Change is likely to affect:
A) People
B) Roles and responsibilities
C) Existing behavioural patterns
D) All of the above
Q4) Evolutionary change involves:
A) Everyone pulling together
B) A major shift in mental models
C) A set of challenging new strategic objectives
D) Modifying current practices though extension and adaptation
Q5) Identify typical sources of organizational rigidity that can inhibit change.
Q6) What are the four important differences between managers and leaders that identify leaders' jobs to 'create and manage change'?
Page 15
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Chapter 14: Strategic Implementation
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Q1) The "complete alignment of the company's strategy ,structure,and value chain" describes the concept of fit.
A)True
B)False
Q2) Which of the following activities is most closely related to marketing strategies?
A) Identifying product opportunities
B) Technology development
C) Basic research
D) Applications development
Q3) Potential promoters of implementation display negative or passive behaviour,but their attitude is positive.
A)True
B)False
Q4) Identify the characteristics of metrics that can be used effectively at the functional level of an organization.
Q5) What are the organizational aspects that can be directly changed during implementation of strategies?
Q6) What is needed to increase the chances of successful strategy implementation?
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Chapter 15: Organizational Structure and Controls
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Q1) Companies with divisional structures should create divisions around different product lines but should avoid organizing around geographic areas or customer types.
A)True
B)False
Q2) Describe the roles that the structural facets of specialization,centralization and formalization play in the design of organizations.
Q3) The conflicts created by specialization,centralization and formalization are a major issue in both large and small organizations.
A)True
B)False
Q4) What is a matrix structure and when should it be used?
Q5) Functional structures are an effective way to organize when:
A) The company begins reporting its financial results publicly
B) A company has completed the process of downscoping
C) Business activity or volume has outgrown a simple structure
D) There is a need to train employees for general management positions
Q6) What is restructuring and how might a firm restructure?
Q7) Identify the key advantages and disadvantages of the functional structure.
Page 17
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Chapter 16: Strategic Entrepreneurship
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Sample Questions
Q1) A successful economy,it is claimed,requires entrepreneurial activity because:
A) Opportunities will continually present themselves
B) Organizations must innovate and search for opportunities to rewrite the rules of competition
C) Cooperation between companies is essential in the new economy
D) Hyper-competition requires new business models
Q2) Which of the following traits would tend to prevent entrepreneurs from establishing new firms?
A) Strong desire for achievement
B) Willingness to take risks and tolerate ambiguity
C) The tendency to be a serial entrepreneur
D) None of the above
Q3) Entrepreneurship is not the exclusive domain of small,young firms.
A)True
B)False
Q4) Intrapreneur is an internal entrepreneur.
A)True
B)False
Q5) Identify the five paths an entrepreneurial start-up may take.
Q6) Identify what is felt to motivate entrepreneurs.
Page 18
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