Question 1

Adapting to new conditions like new innovations by competitors, fast-changing technological developments, and constantly evaluating what is working result in
A)an assured profitability strategy.
B)a broad market entry strategy.
C)an emergent strategy.
D)unlimited revenue generation.
E)a proactive strategy.

Accepted Answer

Adapting to new conditions and constantly evaluating what is working results in an emergent strategy, which involves making incremental changes based on new information and feedback. This approach allows for flexibility and agility in responding to new developments in the market, rather than relying on a predetermined plan or strategy. While a proactive strategy may also involve adapting to new conditions, it is typically more focused on initiating action rather than responding to changes in the environment. The other answer choices, such as assured profitability or unlimited revenue generation, are not necessarily achievable through strategic adaptation alone and may depend on other factors such as market demand and pricing.

Question 2

Amy's Drive-Thru, a fast food facility, offers healthy, sustainably grown veggie and vegan fast food at higher prices than its competitors in the market and has a drive-through and indoor seated casual dining operation. What strategy is Amy's Drive-Thru using to gain competitive advantage?
A)a low-cost provider strategy
B)a broad differentiation strategy
C)a focused low-cost strategy
D)a differentiation strategy
E)a best-cost provider strategy

Accepted Answer

Amy's Drive-Thru is using a differentiation strategy by offering sustainably grown veggie and vegan fast food at higher prices than its competitors. This sets them apart and appeals to a niche market of health-conscious and environmentally aware customers.

Question 3

Managers must be prepared to modify their strategy except when
A)changing circumstances affect performance and the desire to improve the current strategy.
B)rivals make or adjust moves in the market due to the shifting needs of buyers.
C)encountering stagnating market conditions and increasingly restrictive new customer acquisition opportunities.
D)evidence is mounting that the current strategy is becoming less effective.
E)rivals announce their monthly profit margins in public.

Accepted Answer

Managers should be prepared to modify their strategy in response to changing circumstances, market shifts, and evidence of decreasing effectiveness of the current strategy. However, rivals announcing their monthly profit margins in public does not necessarily require a strategy change unless this information directly impacts the company's competitive position or market dynamics.

Question 4

A "repeatedly evolving strategy" best applies to a
A)government housing agency that formulates urban redevelopment plans during a four-year window of time and implements them phase by phase over that period of time.
B)mobile phone company, established in a saturated market, that plans its research and development activities to allow for quarterly releases of new products that match or overtake features of rivals' mobile phones.
C)startup cosmetics manufacturer that replicates the products of rivals but at a comparable quality and lower price.
D)nationalized bank that lends at a lower interest rate but offers a zero-processing fee in a market crowded with privatized banks running at high cost.
E)firearms regulatory agency, set up by the government, that publishes industry standards for safety, reliability, and quality of arms and ammunition.

Accepted Answer

A "repeatedly evolving strategy" refers to adapting and evolving the strategy frequently to match or overtake competitors. The mobile phone company's strategy of quarterly research and development releases to match or overtake rivals' features best fits this definition. The other options either have a fixed plan with minimal changes (A, E) or replicate others without much evolution (C) or offer discounts without evolving the strategy (D).

Question 5

A company's realized strategy evolves from one version to the next due to
A)changing management direction because of understanding several appealing strategy alternatives.
B)the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms.
C)ongoing turnover in the managerial and executive ranks (new managers often decide to shift to a different strategy).
D)pressures from shareholders to boost profit margins and pay higher dividends.
E)the importance of keeping the company's business model fresh and up-to-date.

Accepted Answer

A company's realized strategy evolves from one version to the next due to the proactive efforts of company managers to improve the current strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms. As the business environment is dynamic and continuously changing, companies must adapt to survive and thrive. They must improve their existing strategies to meet new challenges and opportunities. Additionally, they must respond to changes in customer preferences, expectations, and behaviors. Finally, they must react to the strategic moves of their competitors, who are also seeking to gain a competitive advantage.

Question 6

Crafting a deliberate strategy involves developing strategy elements that
A)imitate as much of the market leader's strategy as possible so as not to end up at a competitive disadvantage.
B)comprise a five-year strategic plan that is then fine-tuned during the remainder of the plan period; big changes in strategy are thus made only once every five years.
C)consist of a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods.
D)deliberately eliminate the ongoing strategic elements and implement new planned initiatives.
E)consist of adaptive change plans to new market situations along with abandoned redundant ongoing elements.

Accepted Answer

Crafting a deliberate strategy involves developing a blend of proactive new planned initiatives plus ongoing strategy elements continued from prior periods. This helps balance the need to adapt to new market situations while also leveraging successful elements from the past. The other options are not recommended strategies for deliberate strategy development.

Question 7

If you were advising Rebel Toad Brewing, a local brewpub, about how to set itself apart from rivals and achieve a sustainable competitive advantage, you would most likely not recommend that Rebel Toad Brewing
A)strive to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage.
B)outcompete rivals on the basis of differentiating features such as higher quality, wider product selection, added performance, better service, more attractive styling, technological superiority, or unusually good value for the money.
C)mimic the successful strategies of rivals.
D)focus on a narrow market niche to achieve a competitive edge by doing a better job than rivals of satisfying the needs and tastes of buyers comprising the niche.
E)develop a cost advantage based on offering more value for its patrons' money.

Accepted Answer

Mimicking the strategies of rivals will not provide a sustainable competitive advantage because competitors can easily replicate those strategies. In order to achieve sustainable competitive advantage, Rebel Toad Brewing should focus on differentiating itself from rivals and offering unique value propositions that cannot be easily replicated.

Question 8

A company's strategy is a "work in progress" and evolves over time because of the
A)importance of developing a fresh strategic plan every year that keeps employees from becoming bored with executing the same strategy year after year.
B)ongoing need to imitate the new strategic moves of the industry leaders.
C)need to make regular adjustments in the company's strategic vision.
D)ongoing need of company managers to react and respond to changing market and competitive conditions.
E)frequent need to modify key elements of the company's business model.

Accepted Answer

A company's strategy evolves over time primarily due to the need for managers to adapt to changing market and competitive conditions, ensuring the company remains competitive and relevant.

Question 9

It is normal for a company's strategy to end up being
A)a blend of offensive actions on the part of managers to improve the company's profitability and defensive moves to counteract changing market conditions.
B)a combination of conservative moves to protect the company's market share and somewhat more risky initiatives to set the company's product offering apart from rivals.
C)a close imitation of the strategy employed by the recognized industry leader.
D)a blend of proactive actions to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions.
E)more a product of clever entrepreneurship than of efforts to clearly set a company's product/service offering apart from the offerings of rivals.

Accepted Answer

A company's strategy needs to be a blend of proactive actions taken to improve the company's competitiveness and financial performance, and adaptive reactions to unanticipated developments and fresh market conditions. Offensive actions to improve profitability need to be balanced with defensive moves to counteract changing market conditions.

Question 10

Strategy formulation is
A)mostly hidden to outside view and is deliberately kept under wraps by top-level managers (so as to catch rival companies by surprise when the strategy is launched).
B)typically planned well in advance and usually deviates little from the planned set of actions and business approaches because of the risks of making on-the-spot changes.
C)static over time unless a newly appointed CEO decides to take the company in a new direction with a new strategy.
D)typically a blend of proactive and reactive strategy elements.
E)developed solely on the fly because managers must make constant efforts to come up with fresh moves to keep a company's product offering clearly set apart from the product offerings of rival firms.

Accepted Answer

Strategy formulation involves both proactive and reactive elements. Proactive strategies involve making long-term plans and taking calculated risks to achieve a competitive advantage, while reactive strategies involve responding to unexpected external events or changes in the market. Effective strategy formulation requires a blend of both proactive and reactive elements to anticipate and respond to changing market conditions.

Question 11

In the course of crafting a strategy, managers typically do not
A)abandon certain strategy elements that have grown stale or become obsolete.
B)modify the current strategy when market and competitive conditions take an unexpected turn or some aspects of the company's strategy hit a stone wall.
C)revamp the current strategy in response to the fresh strategic maneuvers of rival firms.
D)take proactive actions to improve this or that piece of the strategy.
E)share the strategy publicly to obtain additional customer and shareholder support.

Accepted Answer

Sharing the strategy publicly to obtain additional customer and shareholder support is not typically done during the process of crafting a strategy, as it may reveal valuable information to competitors and negatively impact the company's competitive advantage.

Question 12

If you were asked to develop a low-cost provider strategy for a startup passenger air carrier business, what would you most likely not recommend?
A)offer low prices on short-distance flights and eliminate meals during flights
B)offer low prices on long-distance flights and maintain long service times for aircraft between flights
C)offer low prices on short-distance flights and improve airplane capacity by reducing the distance between existing seats to permit adding more rows of seating
D)offer low prices on short-distance flights and pay flight attendants a minimum wage
E)offer low prices on long-distance flights and charge fees for both carry-on and checked luggage

Accepted Answer

Maintaining long service times for aircraft between flights would increase costs for the startup carrier, making it difficult to maintain a low-cost provider strategy. It would be more efficient to reduce service times and increase aircraft utilization.

Question 13

An evolving strategy for a ride-share business like Uber or Lyft is not likely to be triggered by
A)their need to keep strategy in step with changing circumstances, market conditions, and changing customer needs and expectations.
B)the proactive efforts of their managers to fine-tune and improve one or more pieces of the strategy.
C)their need to abandon some strategy features that have been faltering or are no longer working well.
D)their need to respond to the newly initiated actions and competitive moves of manufacturers of autonomous vehicles.
E)their need to respond to short-term swings in the stock market that impact timing of an initial public offering (IPO).

Accepted Answer

Short-term swings in the stock market that impact timing of an IPO are not likely to trigger an evolving strategy for a ride-share business like Uber or Lyft, as this is a temporary and unimportant factor in the bigger picture of the business's long-term success. The other options, such as responding to changing circumstances, market conditions, customer needs, and competitive moves of manufacturers of autonomous vehicles, all represent important reasons why Uber and Lyft would need to evolve their strategies over time.

Question 14

Identify the company with a low-cost provider strategy.
A)A fashion clothing line uses sought-after designers and natural fabrics.
B)A mortgage company specializes in lending money for second homes.
C)An online retailer delivers organic groceries overnight.
D)A baby products retailer sells unassembled baby furniture produced in China.
E)A dairy products manufacturer uses exotic substitutes to produce lactose-free dairy products.

Accepted Answer

The baby products retailer is using a low-cost provider strategy by selling unassembled baby furniture produced in China, which allows them to offer lower prices to customers.

Question 15

BloomsJay Resorts Inc. has multiple tropical resorts in various locations. In a crowded market that caters to all kinds of consumers, this resort caters mainly to gays with a guaranteed hassle-free holiday experience at a premium price. What strategy is BloomsJay using to gain competitive advantage?
A)a low-cost provider strategy
B)a broad differentiation strategy
C)a focused low-cost strategy
D)a focused differentiation strategy
E)a best-cost provider strategy

Accepted Answer

BloomsJay Resorts Inc. is using a focused differentiation strategy by targeting a specific, narrow market (gays) and providing a premium holiday experience that caters to their specific needs, which creates a competitive advantage over resorts that cater to a broader market.

Question 16

Giving customers more value for the money by satisfying their expectations on key quality features, performance, and/or service attributes while beating their price expectations is a ________ strategy.
A)best-cost provider
B)focused low-cost
C)focused differentiation
D)broad differentiation
E)low-cost provider

Accepted Answer

The best-cost provider strategy aims to deliver superior value to customers by meeting their quality, performance, and service expectations while offering lower prices than competitors. This aligns with the scenario described in the question. Focused low-cost and low-cost provider strategies prioritize low prices over meeting customer expectations for quality, while focused differentiation and broad differentiation strategies emphasize meeting customer expectations for quality at higher prices.

Question 17

It is incorrect to say that a company's strategy evolves due to
A)a need to promote stability and retain the status quo.
B)the need to abandon some strategy elements that are no longer working well.
C)a need to respond to changing customer requirements and expectations.
D)a need to react to fresh strategic maneuvers on the part of rival firms.
E)the proactive efforts of company managers to improve obsolete aspects of the strategy.

Accepted Answer

A company's strategy often evolves not to promote stability and retain the status quo, but rather to adapt to new challenges and opportunities, such as changing customer requirements, competitive actions, and the need to update obsolete strategy elements. Choices B, C, D, and E all represent reasons why a company might change its strategy, making A the incorrect statement regarding the evolution of a company's strategy.

Question 18

A salsa manufacturing company that enjoys the lest bargaining power with its suppliers would most likely be
A)involved in mass production of its products to cater to an expanding customer base.
B)actively catering to a broad, price-sensitive customer base.
C)manufacturing high-quality salsa and related products from readily available raw materials for a broad customer base.
D)selling salsa and related products deemed to be highly popular and easily available across most supermarkets.
E)offering high-cost specialized salsas that could be consumed only by customers with specific food allergies.

Accepted Answer

Companies offering high-cost specialized products, such as salsas for customers with specific food allergies, often face less bargaining power with suppliers due to the niche nature of their ingredients and the limited availability of suppliers who can meet their specific needs.

Question 19

Winning a sustainable competitive edge over competitors does not hinge on which of the following?
A)having a distinctive competitive product offering
B)building competitively valuable expertise and capabilities not readily matched, and offering distinctive products
C)building experience, know-how, and specialized capabilities that have been perfected over a long period of time
D)having  hard-to-beat capabilities and impressive product innovation
E)building products and distributing them at low prices to a broad customer base irrespective of manufacturing cost

Accepted Answer

While offering low prices to a broad customer base can be a strategy, it alone is not enough to ensure a sustainable competitive advantage. Other factors such as distinctive product offerings, unique expertise and capabilities, and specialized know-how are also necessary for long-term success.

Question 20

Managers of every company should be willing and ready to modify their strategies because
A)market conditions and circumstances are changing over time or the current strategy is clearly failing.
B)the task of crafting strategy is a one-time event.
C)the strategic vision necessitates periodic updating.
D)frequent changes in strategy make it very difficult for rivals to imitate.
E)all strategies are reactive.

Accepted Answer

Market conditions and circumstances are changing constantly, and if the current strategy is not working, it is crucial for managers to modify their strategies to adapt to the changes in the market environment. A flexible approach to strategy is necessary for success in a dynamic business environment.

Quiz 1: What Is Strategy and Why Is It Important?

Adapting to new conditions like new innovations by competitors, fast-changing technological developments, and constantly evaluating what is working result in

Amy's Drive-Thru, a fast food facility, offers healthy, sustainably grown veggie and vegan fast food at higher prices than its competitors in the market and has a drive-through and indoor seated casual dining operation. What strategy is Amy's Drive-Thru using to gain competitive advantage?

Managers must be prepared to modify their strategy except when

A "repeatedly evolving strategy" best applies to a

A company's realized strategy evolves from one version to the next due to

Crafting a deliberate strategy involves developing strategy elements that

If you were advising Rebel Toad Brewing, a local brewpub, about how to set itself apart from rivals and achieve a sustainable competitive advantage, you would most likely not recommend that Rebel Toad Brewing

A company's strategy is a "work in progress" and evolves over time because of the

It is normal for a company's strategy to end up being

Strategy formulation is

In the course of crafting a strategy, managers typically do not

If you were asked to develop a low-cost provider strategy for a startup passenger air carrier business, what would you most likely not recommend?

An evolving strategy for a ride-share business like Uber or Lyft is not likely to be triggered by

Identify the company with a low-cost provider strategy.

Giving customers more value for the money by satisfying their expectations on key quality features, performance, and/or service attributes while beating their price expectations is a ________ strategy.

It is incorrect to say that a company's strategy evolves due to

A salsa manufacturing company that enjoys the lest bargaining power with its suppliers would most likely be

Winning a sustainable competitive edge over competitors does not hinge on which of the following?

Managers of every company should be willing and ready to modify their strategies because