Competitive Strategy Test
Preparation
Course Introduction
Competitive Strategy explores how organizations develop and implement strategies to gain and sustain a competitive advantage in rapidly changing markets. This course covers key frameworks and analytical tools for industry analysis, strategic positioning, and competitor assessment. Students will engage with real-world case studies to understand the dynamics of competition, the impact of innovation, and the choices firms make regarding cost leadership, differentiation, and market focus. Emphasis is placed on critical thinking, strategic decision-making, and understanding how firms respond to competitive threats to achieve long-term success.
Recommended Textbook
Crafting and Executing Strategy Concepts and Cases 22nd Edition by Thompson Jr
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12 Chapters
1434 Verified Questions
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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) FaberRoad, a respected courier brand, is fast losing its market share to competitors who do overnight deliveries of packages or offer lower prices. The company's research department has found that many customers care more about knowing exactly when a package will arrive than getting it the next day. Which strategy would best address the current state of FaberRoad and help it regain its market?
A)employing night delivery drivers at a high cost and maintenance charges
B)developing radio tags that could be attached to packages to allow for real-time tracking by customers' PCs and mobile phones
C)diversifying the different types of packages that can be transported and enabling booking through calls
D)acquiring small transportation companies with cheaper trucks and tempos, rebranding, and using them for deliveries
E)engaging in expensive advertising with new tag lines and famous celebrities to enhance its brand image in the market
Answer: B
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Chapter 2: Charting a Companys Direction
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Sample Questions
Q1) What is the difference between strategic vision and strategic intent? Provide at least one example of each term to support your answer.
Answer: A strategic vision delineates management's aspirations for the business, providing a panoramic view of "where we are going" and a convincing rationale for why this makes good business sense for a particular company. The vision of Google's cofounders Larry Page and Sergey Brin "to organize the world's information and make it universally accessible and useful" provides one good example; Keurig's "Become the world's leading personal beverage systems company" is another example. A company exhibits strategic intent when it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective. Earning a profit is the obvious intent of every commercial enterprise. Mentioned in this regard in Chapter 2 of the text are companies such as Gap Inc., Edward Jones, Honda, The Boston Consulting Group, Citigroup, DreamWorks Animation, and Intuit-all striving to earn a profit for shareholders
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Page 4
Chapter 3: Evaluating a Companys External Environment
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) Identify and briefly explain any four of the factors that influence the strength or intensity of competitive rivalry among an industry's member firms.
Answer: Rivalry among competing sellers increases and becomes a stronger force when:
Buyer demand is growing slowly.
Buyers' costs to switch brands are low.
The products of industry members are commodities or else weakly differentiated. The firms in the industry have excess production capacity and/or inventory.
The firms in the industry have high fixed costs or high storage costs.
Competitors are numerous or are of roughly equal size and competitive strength.
Rivals have diverse objectives, strategies, and/or countries of origin.
Rivals have emotional stakes in the business or face high exit barriers.
Q2) The extent to which firms are meeting objectives suggests they
A)are likely to prosper in the future.
B)are likely to continue their present strategy with only minor fine-tuning.
C)are virtually certain to make fresh strategic moves.
D)recognize the status quo as the best course of action to adopt
E)realize that refocusing will ensure competitive gains.
Answer: B
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Page 5
Chapter
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Sample Questions
Q1) If you were a consultant to SunPower, one of the largest solar power companies in the United States, you would not recommend this activity to remedy high internal costs relative to its rivals.
A)finding ways to detour around activities or items where costs are high
B)redesigning the product or some of its components to permit more economical manufacture or assembly
C)implementing aggressive strategic resource mapping to permit across-the-board cost reduction
D)outsourcing high-cost activities to vendors or contractors who can perform them more economically
E)relocating high-cost activities (like manufacturing)to geographic areas (like China or Latin America or Eastern Europe)where they can be performed more cost-effectively
Q2) Explain why a weighted competitive strength assessment is important and useful to strategic managers.
Q3) Using value chain analysis, which primary and secondary activities would you consider to be most and least valuable for a company like Facebook?
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Chapter 5: The Five Generic Competitive Strategies
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Sample Questions
Q1) Identify cost drivers in a company's value chain. Explain how these drivers impact a firm's generic strategy.
Q2) What are the keys to sustaining a focused low-cost strategy?
Q3) A low-cost leader's basis for competitive advantage is
A)lowest possible prices for comparable products.
B)a low-cost/moderate price approach to gain the biggest market share.
C)high buyer switching costs.
D)meaningful lower overall costs than rivals on comparable products.
E)higher unit sales than rivals.
Q4) The underlying criteria of a best-cost provider strategy usually is found in the ability of a company to
A)offer better goods at attractive prices.
B)create attributes that appeal specifically to niche members.
C)lower overall costs more than rivals in serving niche members.
D)offer buyers something attractively different from competitors' offerings.
E)offer the best product at the industry's lowest possible price.
Q5) 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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Chapter 6: Strengthening a Companys Competitive Position
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Sample Questions
Q1) A strategic objective that is highly UNLIKELY to drive a mergers and acquisition strategy is
A)to gain quick access to new technologies or other resources and capabilities.
B)to create a more cost-efficient operation out of the combined companies.
C)to expand a company's geographic coverage.
D)to facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy.
E)to extend a company's business into new product categories.
Q2) What are the strategic advantages of a backward vertical integration strategy?
Q3) ________ is the extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system.
A)Horizontal scale
B)Vertical scope
C)Outsourcing scope
D)Cooperative scaled scope
E)Focal scope
Q4) When is a strategic alliance most likely to be unsuccessful?
Q5) Identify at least three factors that can aid companies in forming a successful strategic alliance.
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Chapter 7: Strategies for Competing in International Markets
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Sample Questions
Q1) Explain the differences between a "think-global, act-global" strategy and a "think-global, act-local" strategy.
Q2) Identify and explain the significance of each of the following terms and concepts: a. global strategy
b. export strategy
c. licensing strategy
d. franchising strategy
Q3) Identify and briefly describe a local company's strategic options in competing against global challengers.
Q4) ExxonMobil enters into a pact with Gazprom, the world's largest natural gas extractor, to set up a processing unit in Baku, Azerbaijan. Which of the following is most likely the reason for ExxonMobil to opt for this strategic alliance?
A)to gain access to new customers
B)to scale back its core competencies
C)to restrict its factors of production
D)to gain access to low-cost inputs of production
E)to better compete with Gazprom
Q5) Explain why an acquisition is better than a greenfield venture.
Page 9
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Chapter 8: Corporate Strategy
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Sample Questions
Q1) The transaction costs of completing a business agreement or deal of some sort, over and above the price of the deal, can include all of the following except
A)the costs of searching for an attractive target.
B)the costs of evaluating its worth.
C)bargaining costs.
D)the costs of completing the transaction.
E)the premium cost.
Q2) Capturing cross-business strategic-fit benefits via a strategy of related diversification builds shareholder value in ways that shareholders cannot undertake by simply owning a portfolio of stocks of companies in different industries. Provide (1)an example showing how a strategy of related diversification benefited both companies and (2)an example showing how a strategy of related diversification did not benefit both companies. On balance, is related diversification a wise move for a corporation?
Q3) What is the relevance of quantitatively measuring the competitive strength of each business in a diversified company's business portfolio and determining which business units are strongest and weakest?
Q4) Briefly discuss when it makes good strategic sense for a company to consider diversification.
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Page 10
Chapter 9: Ethics, Corporate Social Responsibility,
Environmental Sustainability, and Strategy
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Sample Questions
Q1) The essence of socially responsible business behavior is
A)balancing strategic actions to benefit shareholders against the duty to be a good corporate citizen.
B)pursuing actions to keep prices low enough that the company's profits will not be viewed by the general public as obscenely high or exorbitant.
C)making sizable contributions to political action committees representing the interests of the industry.
D)undertaking actions to balance the interests of all company stakeholders rather than just exclusively working to protect the interests of shareholders.
E)providing jobs for the local community rather than outsourcing them to low wage labor countries.
Q2) What is meant by (1)ethical universalism and (2)integrated social contracts theory? Which of these two schools of thought do you believe is most inclusive? Explain the reasons for your answer.
Q3) In what ways do socially responsible actions and sustainable business practices result in lower costs for a company's human resource activities?
Q4) What is the case for why business strategies should be ethical?
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Chapter 10: Building an Organization Capable of Good
Strategy Execution
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Sample Questions
Q1) What makes the managerial task of executing strategy so challenging and demanding is the
A)trial-and-error experimentation that is required to come up with a workable organizational structure.
B)people-management skills required, the resistance to change that has to be overcome, and the perseverance necessary to get a variety of initiatives launched and kept moving along.
C)time and effort it takes to build core competencies.
D)time, training, and creative effort it takes to empower employees and teach them responsible decision-making.
E)supervisory requirements associated with getting company personnel to do things the right way.
Q2) The most important leadership trait in the strategy execution process is
A)a strong, confident sense of what to do and how to do it.
B)strong communication skills (both written and verbal)covering motivating intent.
C)strong management skills to ensure a systematic approach to administration.
D)strong organizational skills so as to make actions structured toward results.
E)strong empathy skills when employees run into challenging moments.
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Chapter 11: Managing Internal Operations
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Sample Questions
Q1) How has Wegmans created a strategy-supportive reward structure?
Q2) Motivational and incentive compensation practices that aim at winning the commitment of company personnel to good strategy execution typically A)use only positive rewards and never involve the use of tension, fear, job insecurity, stress, or anxiety.
B)entail decidedly positive rewards for meeting or beating performance targets, but also impose sufficiently negative consequences when actual performance falls short of the target.
C)aim at creating a no-pressure/no-adverse-consequences work environment.
D)entail paying the highest wages and salaries in the industry for all jobholder positions and also stressing nonmonetary rewards, like cash bonuses for high-performing employees.
E)put top priority on making employees happy and secure in their jobs.
Q3) Is there a difference between Six Sigma DMAIC programs and Six Sigma DMADV programs? If so, what are those differences?
Q4) Illustrate how companies have used strategic priorities to drive how capital allocations are made in the pursuit of good strategy execution.
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Chapter 12: Corporate Culture and Leadership
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Sample Questions
Q1) What is the role of managerial leadership in changing a problem corporate culture?
Q2) You are being actively recruited by a banking institution with a reputation for a weak corporate culture. What aspect of this bank's culture would most STRONGLY impact your decision to accept or reject an offer from this company?
A)There is virtually no employee support for the company's strategic vision and strategy.
B)There is no code of ethics and the company has little regard for high ethical standards.
C)Little assistance is provided in executing strategy because there are no traditions, values, or behavioral norms that management can use as levers to mobilize commitment to executing the chosen strategy.
D)The company is fairly receptive to change and to people who champion new ways of doing things.
E)The company has a dearth of intellectual capital and shows inattention to building core competencies.
Q3) Why is changing a problem culture one of the toughest management tasks? Explain and justify your answer.
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