Question 1

A focus strategy recognizes that all markets are homogeneous.

Accepted Answer

A focus strategy recognizes that markets are not homogeneous and instead identifies a specific target market or niche within a larger market to serve. It involves developing a unique value proposition and catering specifically to the needs and preferences of that target market.

Question 2

The focus strategy depends on creating value for the customer either by being the low cost producer or by differentiating the product or service in a unique fashion,but doing it in a narrow target segment.

Accepted Answer

The statement accurately describes the focus strategy.

Question 3

A small business following a focus strategy attempts to serve its narrow target markets more effectively and efficiently than competitors trying to appeal to the broad market.

Accepted Answer

A focus strategy involves focusing on serving a narrow target market with specialized products or services, which allows the business to become more efficient and effective in meeting the unique needs of that market. This approach can be more successful than trying to appeal to the broad market, as it allows the business to differentiate itself and build a stronger relationship with its customers.

Question 4

To be successful,a differentiation strategy must create the perception of value in the customer's eyes.

Accepted Answer

A differentiation strategy aims to set a product or service apart from its competitors by highlighting unique features or qualities that create value for the customer. The perception of value is key as it determines whether customers are willing to pay for the higher price associated with the differentiated product or service. Therefore, creating the perception of value in the customer's eyes is crucial for the success of a differentiation strategy.

Question 5

A goal is the master plan that covers all of the major parts of the organization and ties them together into a unified whole.

Accepted Answer

A goal is a specific target or objective to be achieved, not the comprehensive plan that covers all aspects of an organization and integrates them.

Question 6

The secret to good control is the identification and tracking of key performance indicators.

Accepted Answer

By identifying and tracking key performance indicators, it becomes easier to monitor the progress of a project or initiative and make adjustments as needed to ensure success. Without this information, it is difficult to measure performance and make informed decisions about how to improve processes or outcomes.

Question 7

The key to the balanced scorecard is identifying the key single measure for the specific company being evaluated.

Accepted Answer

The key to the balanced scorecard is identifying and measuring multiple key performance indicators across different perspectives (financial, customer, internal processes, and learning and growth) to provide a comprehensive view of the company's performance. It is not limited to a single measure.

Question 8

A differentiation strategy carries a risk with it,in that a firm may not adequately segment the market and properly target those special needs.

Accepted Answer

A differentiation strategy is about targeting a specific group of customers with unique needs and wants. If a firm fails to properly segment the market and understand the target customer, there is a risk that the differentiation strategy will not be successful. This can lead to wasted resources and lost opportunities.

Question 9

Small businesses have some competitive advantages over larger companies-being able to respond quickly,having greater flexibility,being able to build and defend niches,etc.

Accepted Answer

Small businesses are typically able to respond quickly to market changes, adapt to customer needs with greater flexibility, and carve out profitable niches with less competition from larger companies. These are some of the competitive advantages that small businesses have over larger companies.

Question 10

The balanced score looks at the small business from the perspectives of the customer,the company itself,innovation,and finances.

Accepted Answer

The balanced scorecard approach looks at a business from four perspectives: customer, internal processes, innovation and learning, and financial.

Question 11

The best conversion of strategic plans to operational plans is done by top management without the help of the employees.

Accepted Answer

The best conversion of strategic plans to operational plans is done through a collaborative effort between top management and employees, as it ensures that everyone is on the same page and invested in the success of the plan. Top management alone may not have the necessary operational insights and knowledge to make the plans effective.

Question 12

A balanced scorecard is a set of common measures for all companies.

Accepted Answer

A balanced scorecard is custom designed for each company based on its unique strategies, vision and goals. The measures that are included in one company's balanced scorecard may differ significantly from those of another company.

Question 13

Offering lower prices is the best method for a small business to establish its competitive edge.

Accepted Answer

While lower prices may attract customers in the short term, they may not be sustainable in the long term as it can lead to reduced profit margins and difficulties in covering expenses. Small businesses can establish a competitive edge by offering unique products or services, superior quality, exceptional customer service, and targeted marketing strategies.

Question 14

Focus strategies,unlike Porter's other generic strategies,are without risk because they tend to combine elements of all three strategies.

Accepted Answer

Focus strategies, like cost leadership and differentiation, involve making choices and trade-offs that carry some level of risk. These strategies require a company to focus on a narrow target market, which can be risky if that market changes or diminishes.

Question 15

The key to a successful differentiation strategy is to build it on a distinctive competence - something the small company is uniquely good at doing in comparison to its competitors.

Accepted Answer

This statement is true. A differentiation strategy should be based on a distinctive competence that sets the company apart from its competitors. This could be a unique product, service, or process that creates value for customers and gives the company a competitive advantage.

Question 16

To be of any real value to the small business owner,strategic plans must be broken down beyond operational plan level into projects with assigned responsibilities.

Accepted Answer

Strategic plans provide a high-level roadmap for a business, but they need to be translated into specific projects with clear responsibilities in order to be actionable and effective for small business owners.

Question 17

The focal point of the entire strategic plan and the competitive strategy chosen is the customer.

Accepted Answer

The customer is typically the central focus of a company's strategic plan and competitive strategy as they are the ultimate target of the company's products or services.

Question 18

The first step in creating a knowledge management program is to take an inventory of the special knowledge a company possesses that gives it a competitive advantage.

Accepted Answer

This is the first step in creating a knowledge management program.

Question 19

One key to building a successful differentiation strategy is to be better than competitors at some characteristic that customers value.

Accepted Answer

To create a successful differentiation strategy, a company must differentiate itself by being better than its competitors at something that resonates with its target customers. This differentiation can be based on product quality, customer service, unique features, pricing, or any other attribute that sets them apart from competitors in the eyes of the customer.

Question 20

Objectives are the broad,long-range attributes that a business seeks to accomplish.

Accepted Answer

Objectives are specific, measurable goals that a business aims to achieve within a short to medium time frame, not broad, long-range attributes.

Quiz 2: Strategic Management and the Entrepreneur