Competitive Strategy
Test Bank
Course Introduction
Competitive Strategy explores the principles, tools, and frameworks vital for analyzing and formulating strategies that enable firms to achieve and sustain a competitive advantage in dynamic markets. The course covers topics such as industry analysis, resource-based views, positioning, competitive dynamics, and strategic innovation. Through case studies and real-world applications, students learn to assess competitor actions, anticipate market shifts, and make strategic decisions that enhance long-term organizational performance. The course also addresses global competition and the impact of digital transformation on traditional strategy paradigms.
Recommended Textbook
Crafting and Executing Strategy Concepts and Cases 21st Edition by Thompson
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12 Chapters
1434 Verified Questions
1434 Flashcards
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Page 2
Chapter 1: What Is Strategy and Why Is It Important
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) Should a company's strategy be tightly connected to its quest for competitive advantage? Why or why not? What difference does it make whether a company has a sustainable competitive advantage or not?
Answer: Yes, a company's strategy should be tightly connected to its quest for competitive advantage because a strategy is deemed successful when it achieves a durable competitive edge over rivals to gain profits for long period of time along with building a string customer base and steady market position. Delivering superior value or delivering value more efficiently-whatever form it takes-nearly always requires performing value chain activities differently than rivals do and building competencies and resource capabilities that are not readily matched.
Q2) Why is it appropriate to argue that good strategy-making combined with good strategy execution are valid signs of good management?
Answer: Crafting and executing strategy are thus core management functions. Among all the things managers do, nothing affects a company's ultimate success or failure more fundamentally than how well its management team charts the company's direction, develops competitively effective strategic moves and business approaches, and pursues what needs to be done internally to produce good day-in, day-out strategy execution and operating excellence.
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Chapter 2: Leading the Process of Crafting and Executing Strategy
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) The managerial task of effectively conveying the essence of the strategic vision is made easier by
A) having operating strategies that are easy for company personnel to understand and execute.
B) combining the strategic vision and the company's values statement into a single document.
C) adopting a catchy slogan and then using it repeatedly to illuminate the direction and purpose of "where we are headed and why."
D) waiting until the company realizes its mission and ensures the existing corporate culture is compatible with the new vision and direction.
E) distributing written statements that explain "where we are going and why."
Answer: C
Q2) A well-conceived strategic vision helps prepare a company for the future. True or false? Explain and justify your answer.
A)True
B)False
Answer: True
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Chapter 3: Evaluating a Companys External Environment
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) Based on an analysis of the five competitive forces, in which of the following industries is profitability likely to be lowest?
A) pharmaceuticals
B) wireless lighting systems
C) wearable fitness and health monitors
D) pizza restaurants
E) delivery services using drones
Answer: D
Q2) Managers must chart a company's strategic course by
A) focusing on the local environment in which they are operating.
B) ensuring excess production capacity and/or inventory.
C) competing fiercely for a share in the market.
D) building a bigger dealer network.
E) developing a thorough understanding of the company's external and internal environment.
Answer: E
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Chapter 4: Evaluating a Companys Resources and Competitive Position
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127 Verified Questions
127 Flashcards
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Sample Questions
Q1) Organizational capabilities are virtually always
A) knowledge-based, residing in people and in the company's intellectual capital, or in organizational processes and systems, which embody tacit knowledge.
B) more complex than resources and are exercised only through key personnel.
C) require constant evaluation to ensure cooperative support from management.
D) easier and less challenging to categorize than resources because there are fewer to be concerned about.
E) reflective of the industry's driving forces.
Q2) A core competence
A) detracts from a company's arsenal of competitive capabilities and competitive assets and is not a resource strength considered to be genuine.
B) is typically results-based, residing in a company's tangible physical assets on the balance sheet.
C) is often grounded in a single department's set of knowledge and expertise.
D) is an activity that a firm performs proficiently that is also central to its strategy and competitive success.
E) is a proficiently performed external activity.
Q3) Explain why a weighted competitive strength assessment is important.
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Chapter 5: The Five Generic Competitive Strategies: Which
One to Employ
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) The target market of a best-cost provider is
A) value-conscious buyers.
B) brand-conscious buyers.
C) price-sensitive buyers.
D) middle-income buyers.
E) young adults (in the 18-35 age group).
Q2) How valuable a low-cost leader's cost advantage is depends on
A) whether it is easy or inexpensive for rivals to copy the low-cost leader's methods or otherwise match its low costs.
B) how easy it is for the low-cost leader to gain the biggest market share.
C) the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs.
D) the leader's ability to combine the cost advantage with a reputation for good quality.
E) the low-cost leader's ability to be the industry leader in manufacturing innovation so as to keep lowering its manufacturing costs.
Q3) Describe the strategy of striving to be the industry's overall low-cost provider. What does a company have to do to achieve low-cost provider status?
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Page 7
Chapter 6: Supplementing the Chosen Competitive
Strategy: Other Important Business Strategy Choices
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) Identify and briefly discuss four disadvantages of a vertical integration system.
Q2) What are the strategic advantages of a forward vertical integration strategy?
Q3) Which of the following is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies?
A) whether to focus on building competitive advantages
B) whether to employ the element of surprise as opposed to doing what rivals expect and are prepared for
C) whether to employ a market share leadership strategy
D) whether to display a strong bias for swift, decisive, and overwhelming actions to overpower
E) whether to create and deploy company resources to cause rivals to defend themselves
Q4) What is a blue-ocean strategy, what is its appeal, and what is its drawback?
Q5) What does a company racing for global market leadership need strategic alliances for?
Q6) What are the strategic disadvantages of a forward vertical integration strategy?
Page 8
Q7) What are the purpose of defensive strategies? Give at least two examples of defensive moves.
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Chapter 7: Strategies for Competing in Foreign Markets
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) Which of the following countries had the highest labor wage rates in 2013?
A) Canada
B) China
C) Norway
D) South Korea
E) United States
Q2) Explain why an acquisition is better than a greenfield venture.
Q3) When concentrating production in a few locations, which of the following can allow a manufacturer to lower unit costs, boost quality, or master a new technology more quickly?
A) significant scale economies
B) learning-curve effects
C) superior resources
D) profit sanctuaries
E) supporting industries
Q4) What are the pros and cons of using strategic alliances to try to enhance a company's ability to compete in foreign markets?
Q5) Explain how exchange rate fluctuations pose a risk to manufacturing companies that rely upon an export strategy to compete in foreign markets.
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Chapter 8: Diversification: Strategies for Managing a Group of Businesses
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) To take advantage of cross-business value chain relationships and strategic fit and turn them into a competitive advantage requires that companies determine whether there are opportunities to strengthen the business, which includes such tasks as all of the following, EXCEPT
A) the transferring of valuable resources and capabilities from one business to another.
B) combining related value chain activities of different businesses to achieve lower costs.
C) forcing cultural independence, operating diversity, and sophisticated analytical responsibility on the businesses to ensure compatibility with the corporate overhead identity.
D) sharing the use of powerful and well-respected brand names across multiple businesses.
E) encouraging knowledge-sharing and collaborative activity among the businesses.
Q2) What factors should management consider when ranking business units and setting a priority for resource allocation?
Q3) Explain the difference between a cash cow business and a cash hog business.
Q4) Discuss the pros and cons of a strategy of unrelated diversification.
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Chapter 9: Ethical Business Strategies, Social Responsibility, and
Environmental Sustainabil ITY
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) Senior executives can ensure compliance with the ethical code of conduct by considering whether
A) the proposed action is fully compliant and in harmony with the code of ethical conduct and whether stakeholders would consider anything ethically objectionable.
B) the code of conduct is rejected by the market and accepted by employees.
C) the code of conduct was accepted by rivals.
D) the creation of the code of conduct should be handled by executives or employees.
E) to eliminate the need to execute a code of conduct at all.
Q2) Internal administrative costs which are incurred by companies for ethical wrongdoing include all of the following EXCEPT
A) costs attached to adverse effects on employee productivity.
B) costs of remedial education and ethics training to company personnel.
C) costs incurred in taking corrective actions.
D) administrative costs associated with future compliance.
E) legal and investigative costs.
Q3) What is the case for why business strategies should be ethical?
Q4) What is the difference between ethics and business ethics?
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Chapter 10: Building an Organization Capable of Good
Strategy Execution
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113 Verified Questions
113 Flashcards
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Sample Questions
Q1) When it is difficult or impossible to out-strategize rivals (beat them with a superior strategy), the other main avenue to competitive advantage is to A) do a better job of empowering employees and flattening the organization structure.
B) outcompete rivals with a stronger corporate culture.
C) out-execute them (beat them by performing certain value chain activities in superior fashion).
D) beat them with a healthy corporate culture based on such core values as high ethical standards, a strong sense of corporate social responsibility, and genuine concern for customer well-being.
E) institute a more motivating and cost-efficient compensation and reward system.
Q2) Identify and briefly discuss the three facets of building an organization capable of proficient strategy execution.
Q3) Identify and discuss the basic tenets, the chief advantages, and the chief disadvantages of centralized organizational structures.
Q4) What are the advantages of outsourcing non-critical and sometimes even critical value chain activities?
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Page 12
Chapter 11: Managing Internal Operations: Actions That Promote
Good Strategy Execution
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) Cavco Construction divests funds from its commercial property ventures to invest in gated community properties close to New York, signaling a change of strategy. Which of the following statements about Cavco is most likely true?
A) Cavco is impeding the efforts to proficiently execute the strategy.
B) Cavco is merely fine-tuning its existing strategy to test efficiency.
C) Cavco is marshalling resources to support new strategic initiative.
D) Cavco is hampering work climate conducive for good strategy execution.
E) Cavco is focusing on activities that are a low priority in the strategy execution effort.
Q2) The use of incentives and rewards is the single most powerful tool at management's disposal to win strong employee commitment to carrying out the strategic plan. True or false? Explain.
A)True
B)False
Q3) Identify and describe ways that policies and procedures facilitate strategy execution.
Q4) Why does a company's budget need to be closely linked to the needs of good strategy execution? Why might a change in strategy call for budget reallocations?
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Chapter 12: Corporate Culture and Leadership: Keys to Good Strategy Execution
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) When are multiple subcultures MOST problematic?
A) when they are compatible with the overarching corporate culture and are supportive of strategy-execution
B) when they don't clash and coordinating efforts to craft and execute strategy within each subculture is relatively easy
C) when they foster teamwork and support a collaborative approach to strategy execution
D) when they embrace conflicting business philosophies that are inconsistent with superior strategy execution
E) when they guide management in coming up with consistent approaches to executing company strategies
Q2) Identify and discuss the purpose and benefits of closely aligning corporate culture with the requirements for proficient strategy execution.
Q3) A company's corporate culture is grounded in and shaped by its core values and ethical standards and drives a shared commitment to achieve the firm's strategic and financial objectives. True or false? Justify your answer.
Q4) What are the distinctive features of high-performance corporate cultures?
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