Question 1

Which of the following is not cited as one of the questions that development of a competitive strategy should raise?

Accepted Answer

Garnering political support of influential leaders is not a relevant question to raise when developing a competitive strategy. The other options are all valid considerations when formulating a competitive strategy.

Question 2

An effective mission statement not only needs to be specific to that organization; it must enable a common thread to highlight and focus the energy of everyone in the organization in the direction that the top management team believes is best for the business.

Accepted Answer

An effective mission statement helps to align the efforts of everyone in the organization towards the same direction as determined by the top management team. It should be specific to the organization and serve as a unifying factor.

Question 3

One of the first steps in good strategy design should include crafting the mission statement for the organization.

Accepted Answer

Crafting a clear mission statement is an important first step in strategy design as it helps to define the purpose and goals of the organization.

Question 4

Which strategy raises the questions of whether to compete on the basis of lower cost or differentiation and whether to compete for the biggest market or a niche market?

Accepted Answer

The competitive strategy raises these questions as it involves determining how a company should compete in its industry against its rivals. The strategy involves making choices between lower cost or differentiation and choosing between a broad market or a specific niche. The other strategies (business, corporate, functional, and focus) do not specifically address these questions.

Question 5

The SFAS Matrix summarizes an organization's strategic factors by combining the external factors from the IFAS Table with the internal factors from the EFAS Table.

Accepted Answer

The SFAS Matrix is a tool used to combine both the internal and external factors that affect an organization's strategic position. It uses information from both the IFAS (Internal Factor Analysis Summary) and the EFAS (External Factor Analysis Summary) tables to create a comprehensive analysis of an organization's strengths, weaknesses, opportunities and threats.

Question 6

Which of Porter's competitive strategies recommends that a company emphasize a particular buyer group or geographic market and attempts to seek a cost advantage in its targeted segment?

Accepted Answer

Cost focus strategy involves targeting a specific market segment and aiming to be the lowest-cost producer in that segment, which matches the description given.

Question 7

Which of the following is true of an organization's mission statement?

Accepted Answer

A mission statement should be concise and memorable, enabling employees to easily remember and align with the organization's core purpose and direction.

Question 8

Walmart, as a discount retailer, is an example of a company following which of Porter's competitive strategies?

Accepted Answer

Walmart is known for its low prices and cost leadership strategy, which involves offering products at a lower cost than competitors to gain a competitive advantage.

Question 9

According to Porter, the term that applies to the breadth of a company's or business unit's target market is called

Accepted Answer

Competitive scope refers to the breadth of a company's or business unit's target market. The other choices are related to other aspects of Porter's generic strategies framework, such as differentiation, focus, diversification and cost leadership.

Question 10

Apple is an example of a company following which of Porter's generic competitive strategies?

Accepted Answer

Apple is well known for its strategy of differentiation. They focus on creating unique and innovative products that stand out from their competitors. They have a strong brand image and customer loyalty that allows them to charge premium prices for their products.

Question 11

According to Porter, the generic competitive strategy that reflects the ability to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service is called

Accepted Answer

According to Porter, differentiation is the generic competitive strategy that reflects the ability to provide unique and superior value to the buyer in terms of product quality, special features, or after-sale service. Therefore, option B is the correct choice.

Question 12

What are the common elements of a well-crafted mission statement?

Accepted Answer

The answer of What are the common elements of a...

Question 13

In manufacturing toilet paper for grocery store chains (and avoiding competing directly against Charmin), Potlach has followed which of Porter's generic competitive strategies?

Accepted Answer

The answer of In manufacturing toilet paper for grocery store...

Question 14

What are the three generic competitive strategies that Porter promotes as the means for outperforming other corporations in a particular industry?

Accepted Answer

The three generic competitive strategies that Porter promotes as the means for outperforming other corporations in a particular industry are cost leadership, differentiation, and focus. Cost leadership involves achieving the lowest cost of production and distribution in the industry, while differentiation involves creating a unique value proposition for the customer. Focus involves targeting a specific market segment, product line, or geographic region. These three strategies can be used in isolation or combination to create a sustainable competitive advantage.

Question 15

Orphagenix, a small biotech firm, avoids head-to-head competition with large pharmaceutical companies by developing orphan drugs to target diseases that affect fewer than 200,000 people. This is an example of which of Porter's generic strategies?

Accepted Answer

Orphagenix is using differentiation focus strategy as it is targeting a specific niche market of orphan drugs to treat diseases that affect fewer than 200,000 people. This strategy allows them to avoid head-to-head competition with large pharmaceutical companies who are focused on more common diseases.

Question 16

What is a propitious niche? Provide an example of a firm that has been able to occupy a propitious niche successfully.

Accepted Answer

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Question 17

According to Porter, the generic competitive strategy that reflects the ability of the corporation or its business unit to design, produce, and market a comparable product more efficiently than its competitors is called

Accepted Answer

The competitive strategy of designing, producing, and marketing a comparable product more efficiently than competitors is known as cost leadership. This strategy focuses on reducing costs to offer products at a lower price than competitors while still maintaining a reasonable profit margin. The other choices (competitive scope, differentiation, diversification, and focus) do not specifically refer to this strategy.

Question 18

Business strategy is composed of

Accepted Answer

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Question 19

Business strategy focuses on

Accepted Answer

Business strategy focuses on improving the competitive position of a corporation's products or services within the industry or market segment served. While maintaining market share and providing adequate shareholders' return on investment may be important components, the main focus of business strategy is to improve competitiveness. Preventing competition and recovering competitive lead may be specific tactics used in achieving this goal, but they are not the overarching focus of business strategy.

Question 20

Which of Porter's competitive strategies concentrates on seeking differentiation in a particular buyer group, product line segment, or geographic market?

Accepted Answer

The competitive strategy that concentrates on seeking differentiation in a particular buyer group, product line segment, or geographic market is called differentiation focus. This strategy involves targeting a specific niche in the market and offering unique, specialized products or services that meet the needs and preferences of that particular segment. By doing so, the company can differentiate itself from competitors and build strong brand loyalty within its target market.

Quiz 6: Strategy Formulation: Business Strategy