Question 1

Goals are the broad, long-range attributes that a business seeks to accomplish; objectives are more specific targets of performance.

Accepted Answer

Goals are broad, long-term aspirations that a business strives to achieve, while objectives are more specific and measurable targets that the business sets to achieve its goals.

Question 2

The strategic planning process works best when employees are actively involved with managers in setting company goals and objectives.

Accepted Answer

Active involvement of employees in the strategic planning process leads to increased commitment, ownership, and accountability towards achieving the company's goals and objectives. It also brings in diverse perspectives, promotes creativity and innovation, and improves communication and collaboration within the organization. Therefore, the strategic planning process works best when employees are an integral part of it.

Question 3

Conducting successful competitive intelligence on rivals' strategies and actions may include researching their Web sites, buying their products to assess their quality, and watching for employment ads to determine the type of employees they are hiring.

Accepted Answer

This statement is true. Some ways to conduct successful competitive intelligence include researching rivals' websites, purchasing their products, and monitoring their employment ads to gather information on their strategies and actions.

Question 4

Setting seemingly impossible objectives, those outside of the likely reach of employees, helps managers to create and maintain a high motivation level.

Accepted Answer

Setting impossible objectives can lead to demotivation and a sense of failure among employees. Objectives should be challenging but also achievable in order to maintain a high motivation level.

Question 5

Performing competitive intelligence on rivals' strategies and actions does not mean that entrepreneurs must engage in unethical or illegal espionage activities.

Accepted Answer

Competitive intelligence can be done ethically through methods such as publicly available information, industry conferences, and market research. Engaging in illegal or unethical activities is not necessary and should be avoided.

Question 6

Goals and objectives provide targets to aim for and a basis for evaluating a company's performance.

Accepted Answer

Goals and objectives help a company focus on what it wants to achieve, and provide a way to measure progress and success.

Question 7

"Improving the company's cash flow" is a good example of an effective objective.

Accepted Answer

An effective objective should be specific, measurable, achievable, relevant, and time-bound (SMART). "Improving the company's cash flow" is too vague and lacks these elements.

Question 8

"Increasing our market share from 8 percent to 10 percent by the end of the current fiscal year" is a good example of an effective objective.

Accepted Answer

This is a specific, measurable, achievable, relevant, and time-bound (SMART) objective that outlines a clear goal for the company to strive towards. It provides a clear target to work towards and allows for tracking progress towards that goal.

Question 9

The best way to build a cost-leadership competitive advantage is to focus entirely on manufacturing costs.

Accepted Answer

While focusing on manufacturing costs is important for achieving cost leadership, it is not the only factor. Other areas such as supply chain management, distribution channels, and operational efficiency also play a significant role in building a cost-leadership competitive advantage.

Question 10

Small firms pursuing a cost-leadership strategy have an advantage in reaching customers whose primary purchase criterion is high quality.

Accepted Answer

Small firms pursuing a cost-leadership strategy typically prioritize low prices over high quality. Therefore, they may not have an advantage in reaching customers whose primary purchase criterion is high quality.

Question 11

Before an entrepreneur can build a successful strategy, she must establish a clear mission, goals, and objectives in order to have appropriate targets at which to aim her strategy.

Accepted Answer

This statement is true. A clear mission, goals, and objectives are essential in order to create a successful strategy that is focused and effective. Without these clear targets, it is difficult to know what actions to take in order to achieve success.

Question 12

A danger of cost-leadership is that a company may misunderstand what processes actually drive its true costs.

Accepted Answer

Cost-leadership strategy focuses on reducing costs as much as possible to offer products at lower prices than competitors. However, in pursuing this strategy, a company may overlook the actual processes that drive its costs, resulting in reduced quality or customer satisfaction. This can ultimately harm the company's long-term success. Therefore, it is important for a company to have a thorough understanding of its true costs and the processes that drive them before implementing a cost-leadership strategy.

Question 13

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

Accepted Answer

This statement is true. To differentiate oneself from competitors, a company needs to excel in a way that is valued by customers.

Question 14

One of the goals of competitive analysis is to improve a firm's reaction time to competitor's actions.

Accepted Answer

By keeping tabs on competitors' actions, a firm can better anticipate their moves and respond more quickly and effectively, which can give them a strategic advantage.

Question 15

A competitive profile matrix analyzes how well a company and its rivals match the key success factors in the industry.

Accepted Answer

A competitive profile matrix assesses how well a company and its competitors are performing in relation to the critical success factors in the industry.

Question 16

It is unwise for entrepreneurs to monitor competitors' strategies and actions because such activities require them to engage in illegal or unethical behavior.

Accepted Answer

It is not unwise for entrepreneurs to monitor competitors' strategies and actions, but it is important to do so in a legal and ethical manner. Competitor analysis is a common business practice that helps entrepreneurs keep up with market trends and identify potential opportunities or threats. However, obtaining confidential information or using deception to gain a competitive advantage is illegal and unethical. Entrepreneurs should always respect the law and their competitors' intellectual property rights, and focus on creating value for their own customers rather than just copying others' strategies.

Question 17

A company's strategy spells out the ends the business wants to achieve, and its mission, goals, and objectives define the means for reaching them.

Accepted Answer

A company's strategy defines the means or actions to achieve its mission, goals, and objectives, which are the ends or desired outcomes.

Question 18

A strategy is a road map of action for fulfilling a firm's mission, goals, and objectives.

Accepted Answer

This statement is true. A strategy outlines the actions a firm will take to achieve their mission, goals, and objectives.

Question 19

Objectives should be as general as possible to permit flexibility in the business.

Accepted Answer

Objectives should be specific and measurable to provide clear direction and guidance for the business. General objectives may lead to ambiguity and lack of focus, which can hinder progress and achievement of goals.

Question 20

A company pursuing a cost-leadership strategy strives to be the lowest-cost producer relative to its competitors in the industry.

Accepted Answer

This statement is true. A company pursuing a cost-leadership strategy aims to have the lowest cost of production in order to offer products or services at a lower price than competitors, ultimately gaining market share.

Quiz 3: Designing a Competitive Business Model and Building a Solid Strategic Plan