Question 1

It is advisable to combine a cost leadership strategy with a differentiation strategy to get better results.

Accepted Answer

The answer of It is advisable to combine a cost...

Question 2

The major opportunities for developing competitive advantage have traditionally included cost, quality, knowledge, timing, barriers to entry, and financial resources.

Accepted Answer

This statement is true. These factors have historically been key areas for companies to focus on in order to gain a competitive advantage.

Question 3

A strategic alliance that involves the development of preferred supplier relationships to guarantee a smooth and timely flow of quality materials among partners is known as an outsourcing alliance.

Accepted Answer

This statement describes a supplier alliance, not outsourcing alliance. Outsourcing involves the contracting of a third-party company to perform certain tasks or services on behalf of a business.

Question 4

A globalization strategy seeks balance among efficiencies in global operations and responsiveness to local markets.

Accepted Answer

The answer of A globalization strategy seeks balance among efficiencies...

Question 5

The strategic objective of the differentiation strategy is to attract customers who stay loyal to the firm's products and lose interest in those of its competitors.

Accepted Answer

The differentiation strategy aims to make a product or service unique in a way that customers perceive as valuable, which can lead to brand loyalty and reduced interest in competitors' offerings.

Question 6

Restructuring by turnaround often occurs along with a change in top management.

Accepted Answer

Turnaround efforts often involve changing the leadership and management team to bring in new ideas and fresh perspectives for implementing necessary changes.

Question 7

A multidomestic strategy reflects a geocentric view that respects diversity and values talents around the world.

Accepted Answer

A multidomestic strategy focuses on adapting products and strategies to fit the specific needs of each country, reflecting a polycentric view that recognizes and respects the differences among various markets. A geocentric view, in contrast, seeks to integrate a global perspective by combining and leveraging the strengths and resources from around the world without giving preference to any one country's approach.

Question 8

The transnational strategy focuses on working with rivals on projects of mutual benefit.

Accepted Answer

The transnational strategy focuses on balancing global and local responsiveness through coordination and integration of the different subsidiaries, and may involve collaborations or partnerships with suppliers, customers, or other firms, but not necessarily with direct rivals.

Question 9

Related diversification involves growth by acquiring new businesses or entering business areas that are related to what the organization already does.

Accepted Answer

Related diversification is a growth strategy that involves expanding into businesses that are closely related to the core business of the organization. This can provide opportunities for synergy and economies of scope, as well as reduce risk by leveraging existing capabilities and resources.

Question 10

A multidomestic strategy tries to customize products and their advertising as much as possible to fit the local needs of different countries or regions.

Accepted Answer

A multidomestic strategy aims to adapt products and advertising to specific local markets, rather than using a standardized approach across different countries/regions.

Question 11

A transnational strategy reflects a polycentric view that that shows respect for both market diversity and the capabilities of locals to best interpret their strategic implications.

Accepted Answer

A transnational strategy reflects a geocentric view, not a polycentric one, as it seeks to balance global efficiency with local responsiveness and leverages both global and local capabilities.

Question 12

A globalization strategy adopts standardized products and advertising for use worldwide.

Accepted Answer

A globalization strategy seeks to create standardized products and advertising that can be used worldwide to achieve consistency and cost efficiency.

Question 13

Bankruptcy under Canadian law protects a firm from creditors while management reorganizes to restore solvency.

Accepted Answer

This statement is true. Bankruptcy in Canada is governed by the Bankruptcy and Insolvency Act, which provides for a process of restructuring and reorganization in cases of financial distress. During this process, the firm is protected from creditor actions while management works to regain solvency.

Question 14

Restructuring by divestiture is mostly followed by organizations that are focused and not complex.

Accepted Answer

Restructuring by divestiture is mostly followed by complex organizations that have multiple business units and are trying to streamline their operations by separating themselves from non-core assets. Focused organizations with simpler structures may follow other forms of restructuring such as downsizing or outsourcing.

Question 15

Unrelated diversification involves growth by acquiring new businesses or entering business areas that are different from what the organization already does.

Accepted Answer

Unrelated diversification refers to expanding into new and different businesses, outside of the organization's current business areas.

Question 16

A strategic alliance that involves firms joining together for sales and distribution of products or services is known as a distribution alliance.

Accepted Answer

This is the correct definition of a distribution alliance.

Question 17

In a supplier alliance, firms join together to sell and distribute products or services.

Accepted Answer

In a supplier alliance, firms join together to purchase goods or services at a lower cost or to reduce the costs associated with supply chain activities. They do not join together to sell and distribute products or services.

Question 18

A restructuring strategy is used where changes in the scale and/or mix of operations are implemented in order to gain both short-term efficiencies and time to prepare new strategies for improving future performance.

Accepted Answer

This is an accurate definition of a restructuring strategy.

Question 19

Co-opetition is the strategy of working with competitors on mutually beneficial projects.

Accepted Answer

Co-opetition is indeed the strategy of working with competitors to achieve benefits for all involved parties.

Question 20

In Michael Porter's generic strategies model, market scope measures the breadth or narrowness of the target market, and source of competitive advantage that reflects whether the advantage is sought through lower price or product uniqueness.

Accepted Answer

This statement is true. Market scope and source of competitive advantage are two of the three key components in Michael Porter's generic strategies model, with the third being the choice of competitive scope or focus. Market scope refers to the breadth or narrowness of the target market, while source of competitive advantage reflects whether the advantage is sought through lower price (cost leadership) or product uniqueness (differentiation).

Quiz 10: Strategy and Strategic Management