Deck 1: Introducing Strategic Management

Question 1

Strategy implementation is generally less important than strategy formulation for business success.

Answer 1

False

Question 2

Business strategy operates as a zero-sum game in which one firm's wins represent another firm's losses.

Answer 2

False

Question 3

Research suggests that U.S. managers are better at strategy implementation than strategy formulation.

Answer 3

False

Question 4

Strategy formulation is a part of strategic management that focuses on the specific actions that a firm uses to achieve strategic goals and objectives.

Question 5

Corporate strategies are used by businesses that compete in a single industry or business segment.

Question 6

Firms that compete in some aspects of business may actually cooperate in other business areas.

Question 7

Effective strategies always arise out of unplanned decisions and actions.

Question 8

Strategy implementation is defined as the process of deciding what a firm should do.

Question 9

The company Under Armour was originally successful at charging higher prices for t-shirts because its products gave the consumer tangible benefits.

Question 10

Corporate-level strategies are most appropriate for diversified businesses that compete in many different and unrelated businesses and industries.

Question 11

Successful strategies are often formulated without input from those who will later implement the strategies.

Question 12

Customization of products and services is a major way to exploit various targeted arenas.

Question 13

Business-level strategies are focused on developing and pursuing goals and objectives within specific markets or industry segments.

Question 14

Successful strategies are usually formulated by focusing on a single functional business area.

Question 15

The big-picture perspective of a business strategy differs significantly from the tactics used to implement the strategy.

Question 16

Vision statements tend to be very general, while arenas are identified very specifically.

Question 17

Most business industries are relatively stable, because significant industry changes take many years to implement.

Question 18

A conglomerate is a business that is so diversified it does not fit into one specific industry category.

Question 19

The process of implementing strategy should provide information that can be used to modify a firm's strategy.

Question 20

The term arena is defined as what a firm wants to become in the future.

Question 21

A major goal of strategy implementation is to translate good ideas into action and translate actions into good ideas.

Question 22

Identifying and exploiting differentiators demonstrates that a firm is successful at making tough choices and deciding on tradeoffs.

Question 23

Differentiators are defined as areas where a firm chooses to compete in the marketplace.

Question 24

The internal perspective assumes that firms can create a competitive advantage by having resources that are rare or costly to imitate.

Question 25

Organizational structure is the least important of all three major strategic levers.

Question 26

Acquisition of other businesses is a main vehicle that firms can use to enter new market or industry segments.

Question 27

The external perspective indicates that differences in competitive advantage are more often a function of industry attractiveness than a function of the firm's position in the industry.

Question 28

A goal of implementation is to ensure that strategy formulation is comprehensive and well informed.

Question 29

Strategy implementation results when a firm performs specific tasks that are required to achieve the goals and objectives described in the strategic plan.

Question 30

Economic logic is the means by which a firm will earn a profit by implementing a strategy.

Question 31

In most businesses, the information necessary to formulate strategy can be found with a small group of leaders.

Question 32

JetBlue's decision to secure a home base at JFK Airport when the New York Port Authority was anxious to attract more air traffic is an example of a decision regarding the "arenas" element of strategy.

Question 33

The competitive advantage held by one firm over its competitors tends to change more slowly in stable markets.

Question 34

Staging refers to the timing and pace of strategic moves that are influenced by how a firm uses available resources such as cash, human capital, and knowledge.

Question 35

Systems consist of the organizational processes and procedures that a firm uses in its daily operations, such as controls and incentives, resource-allocation procedures, budgets, and distribution.

Question 36

Competitive advantage occurs when a firm has more resources than its competitors.

Question 37

A firm that achieves competitive advantage can usually maintain it over time.

Question 38

Major differentiators include services that help a business outperform their competitors, including brand image, customization, technical superiority, price, quality, and reliability.

Question 39

Staging decisions are typically driven by a single factor, such as resources, urgency, credibility, or the need for early wins.

Question 40

The external perspective on competitive advantage is based on the assumption that differences in competitive advantage are a function of the uniqueness of the firm.

Question 41

The dynamic perspective indicates that the current market position of a firm is not an accurate predictor of its future performance.

Question 42

Which of the following concepts describes the process used to decide what a firm should do?

A) strategy integration
B) strategy implementation
C) strategy formulation
D) strategic alignment

Question 43

In markets that are dominated by only a few firms, the degree of industry stability has no effect on competitive advantage.

Question 44

Which of the following describes the most appropriate use of business-level strategies?

A) pursuing opportunities within a specific business
B) outsourcing production to overseas divisions
C) managing diversified businesses
D) competing in hypercompetitive markets

Question 45

Which type of firm would most likely use corporate-level strategies?

A) firms that compete in only a single business or market segment
B) firms that possess superior capabilities
C) firms that compete in many diversified or unrelated businesses and industries
D) firms that choose to compete in an attractive industry

Question 46

The degree of environmental stability of industries and markets is a major factor in determining a firm's competitive advantage.

Question 47

A firm that is characterized by multimarket competition encounters the same competitors in many different markets.

Question 48

Business-level and corporate-level strategies are least likely to share which of the following elements?

A) focus on profit maximization
B) focus on cash flow maximization
C) breadth of focus
D) focus on quality and efficiency

Question 49

The dynamic strategy perspective is particularly useful for analyzing markets that change rapidly and unpredictably.

Question 50

Which of the following maintains the ultimate responsibility for strategy within an organization?

A) senior management
B) lower-level managers
C) mid-level executives
D) employee teams

Question 51

The dynamic perspective tends to explain the medical products industry more accurately than it explains the computer industry.

Question 52

The competitive advantage of a firm over its competitors tends to change more slowly in unpredictable markets.

Question 53

A business market that experiences rapid and unpredictable change is known as a "high-velocity" market.

Question 54

Which of the following strategy components was most helpful for Under Armour's early success in the sports apparel industry?

A) The company started in two market segments, t-shirts and footwear, at the same time.
B) The company's first t-shirt product was highly differentiated from existing products.
C) Instead of starting with the U.S. domestic market, the company began its sales effort in Europe.
D) The company increased sales by offering t-shirts at lower prices than the competition.

Question 55

The dynamic perspective looks at how a firm arrived at its current market position to predict future competitive advantage.

Question 56

A conglomerate is best described as ________.

A) a business that fits into a specific market or industry category
B) a business that is not diversified
C) a business that sells only one product
D) a highly diversified business that does not fit into one specific category

Question 57

Research shows that few firms persist with their competitive advantage over prolonged periods of time.

Question 58

The dynamic perspective is useful as a tool for examining industries in which firms tend to encounter the same competitors in multiple markets.

Question 59

Which concept describes how a firm determines the objectives and tasks that are required to put a plan into action?

A) strategy alignment
B) strategy implementation
C) strategy formulation
D) strategy integration

Question 60

Which statement about the strategic management process is most accurate?

A) Strategic management explains why firms translate their vision into actions.
B) Strategic management should be focused on both strategy formulation and implementation.
C) Strategic management is determined by forces in the firm's external environment.
D) Strategic management is a formula used to develop strategies.

Question 61

Which of the following would be least likely to drive a company's staging decision regarding expansion into a particular market?

A) a brief, time-bound window of opportunity for the expansion
B) the need for early wins in the proposed expansion market
C) a sense of urgency posed by technological advances in the market
D) significant financial resources made available for the expansion

Question 62

A company plans to maximize its profits by charging premium prices for superior customer service. This plan represents an example of which of the following aspects of strategy?

A) arenas
B) vehicles
C) economic logic
D) staging

Question 63

_____ is/are not a vehicle described in the business strategy diamond.

A) Joint ventures
B) Reputation
C) Acquisitions
D) Franchising

Question 64

A company makes a decision to expand only by developing new stores internally. The company can best be described as using which of the following?

A) the vehicle of organic growth
B) the vehicle of acquisition
C) the differentiator of alliances
D) the economic logic of customization

Question 65

Which of the following factors relates to staging as described in the business strategy diamond?

A) market segments
B) speed of expansion
C) product styling
D) business alliances

Question 66

The initial plan behind a strategy is best described as the ________ strategy.

A) unrealized
B) realized
C) emergent
D) intended

Question 67

In the perceptions of consumers, low prices tend to be associated with ________.

A) fast ship times
B) low quality
C) state-of-the-art technology
D) wide availability

Question 68

_____ is/are not one of the levers used to achieve strategic alignment.

A) Reward systems
B) Profitability
C) Processes
D) Organizational structure

Question 69

A company decides to expand its business operations overseas. It plans to enter Asia first, followed by Europe and then Africa. This type of planning is an example of which of the following aspects of business strategy?

A) economic logic
B) arenas
C) vehicles
D) staging

Question 70

A research associate is requested by his boss to write a report identifying potential new arenas in which the business might launch overseas operations. Which of the following categories is the associate least likely to include as a potential arena in his report?

A) customers
B) channels
C) product categories
D) technologies

Question 71

The concept of strategic alignment can best be described as ________.

A) the way that firms choose to use their resources
B) the need for the firm's activities to compliment each other and support the overall strategy
C) the way that firms choose to develop their capabilities
D) the need to increase competitive advantage by selecting an attractive industry

Question 72

Which of the following is not a key component of strategy included as part of the strategy diamond?

A) staging
B) differentiators
C) evaluation
D) vehicles

Question 73

_____ are not an arena described in the business strategy diamond.

A) Delivery channels
B) Product and service categories
C) Mergers and acquisitions
D) Market segments

Question 74

A company executive makes a presentation to the company's shareholders regarding the major components of the company's business strategy. Which of the following is the executive least likely to mention when explaining the component of economic logic?

A) Superior service
B) Internal development
C) Economies of scale
D) Proprietary product features

Question 75

A senior manager is reviewing the components of the strategy diamond with her staff. When naming the five major components, she lists all of the following except ________.

A) competitors
B) vehicles
C) differentiators
D) staging

Question 76

All of the following are aspects of organizational structure except ________.

A) units
B) hierarchy
C) budgeting
D) authority

Question 77

Which of the following is not an example of a vehicle as described in the strategy diamond?

A) internal development
B) customer service
C) joint ventures
D) licensing

Question 78

Acme Wholesale Supply is considering expanding its sales operations overseas. Which of the following factors is most likely to have a major impact on Acme's decision regarding staging of the expansion?

A) Prices
B) Channels
C) Resources
D) Locations

Question 79

A business utilizing the "people and rewards" implementation lever would most likely carry out which of the following?

A) providing on-the-job training programs
B) instituting just-in-time inventory control
C) reorganizing the company's management hierarchy
D) decentralizing the company's business operations

Question 80

A company hires a business consultant to help identify key differentiators that may increase the company's competitive advantage. In discussing possible differentiators, the consultant is least likely to mention which of the following?

A) product categories
B) image
C) price
D) speed to market