Deck 8: Business Strategy

Question 1

Common resources,skills and organizational requirements to support a "differentiation" generic strategy include all but:

A)Strong marketing abilities
B)Product engineering
C)Strong coordination among R&D,product development and marketing
D)Low-cost distribution system

Answer 1

D

Question 2

Truly low-cost advantages ______ price competition.

A)increase
B)lessen
C)strengthen
D)have no effect on

Answer 2

B

Question 3

Cost differences often ____ over time.

A)increase
B)decline
C)strengthen
D)have no effect on

Answer 3

B

Question 4

The two most prominent sources of competitive advantage for a business are:

A)Integration and coordination
B)Cost and differentiation
C)People and products
D)Products and services

Question 5

Business success built on cost leadership requires the business to be able to provide its product or service at a cost _____ what its competitors can achieve.

A)at
B)above
C)below
D)equal to

Question 6

Businesses that create competitive advantages from one or both of cost and differentiation usually experience ______ profitability within their industry.

A)above-average
B)average
C)below average
D)marginal

Question 7

Which of the following is NOT a skill or a resource that fosters differentiation?

A)Process engineering skills
B)Strong cooperation for channels
C)Product engineering
D)Creative talent and flair

Question 8

Which of the following are often referred to as generic strategies?

A)Cost leadership and differentiation
B)Market leadership and differentiation
C)Cost leadership and product pricing
D)Differentiation and value chain analysis

Question 9

Low-cost advantages should ______ the attractiveness of substitute products.

A)increase
B)lessen
C)strengthen
D)have no effect on

Question 10

Organizational requirements to support and sustain cost leadership are:

A)Subjective measurements and incentives
B)Tradition of closeness to key customers
C)Frequent,detained control reports
D)Some personnel skilled in sales and operations

Question 11

Which of the following is NOT a skill or a resource that fosters cost leadership?

A)Strong downstream partners
B)Process engineering skills
C)Low-cost distribution system
D)Sustained capital investment and access to capital

Question 12

Organizational requirements to support and sustain differentiation activities include which of these?

A)Frequent,detailed control reports
B)Structured organization and responsibilities
C)Tradition of closeness to key customers
D)Incentives based on meeting strict,quantitative targets

Question 13

Which one of the following is NOT a key risk associated with a cost leadership oriented business strategy?

A)Many cost-saving activates are easily duplicated
B)Cost differences seldom decline over time
C)Exclusive cost leadership can become a trap
D)Obsessive cost cutting can shrink other competitive advantages involving key product attributes

Question 14

Skills and resources that foster differentiation are:

A)Strong marketing skills
B)Sustained capital investment and access to capital
C)Minimal investment in product engineering and basic research
D)Products designed for ease of delivery

Question 15

Common resource,skills and organizational requirements to support an "overall cost leadership" generic strategy include all but:

A)Sustained access to capital
B)Subjective measurement and incentives instead of quantitative measures
C)Process engineering skills
D)Tight cost control

Question 16

______ type of innovations support a cost leadership strategy.

A)disruptive
B)process
C)Product
D)breakthrough

Question 17

__________ requires that the business have substantial advantages that allow it to provide buyers with something uniquely valuable to them.

A)Cost strategy
B)Integration
C)Differentiation
D)Speed-based strategy

Question 18

Skills and resources that foster differentiation are:

A)Product engineering skills
B)Sustained capital investment and access to capital
C)Minimal investment in product engineering and basic research
D)Products designed for ease of delivery

Question 19

Rivalry is ____ when a business successfully differentiates itself.

A)increased
B)reduced
C)strengthened
D)confronted

Question 20

Which of these refers to business strategies that seek to establish long-term competitive advantages by emphasizing and perfecting value chain activities that can be achieved at costs substantially below what competitors are able to match on a sustained basis?

A)Differentiation strategies
B)Grand strategies
C)Low-cost strategies
D)Speed-based strategies

Question 21

Business strategies built around functional capabilities and activities that allow the company to meet customer needs more rapidly than its main competitors are referred to as __________ strategies.

A)Speed-based
B)Cost
C)Differentiation
D)Integration

Question 22

Ability to reuse or liquidate unneeded equipment; advantage in cost facilities; control system accuracy; and streamlined management control represent decline stage of industry evolution for which functional area?

A)Marketing
B)Production operations
C)Finance
D)Engineering and R&D

Question 23

An industry that has growing sales across all the companies in the industry based on growing demand for the relatively new products,technologies and/or services made available by the firms participating in this industry is called a(n)_______ industry.

A)Mature
B)Emerging
C)Focus
D)Low-cost

Question 24

Production operations' capabilities to improve product and reduce costs and ability to share or reduce capacity is associated with which of the strategies of industry growth?

A)Growth
B)Decline
C)Introduction
D)Maturity

Question 25

A key risk associated with a differentiation strategy is:

A)Many cost saving activities are easily duplicated
B)The cost difference between low cost competitors & the differentiated business is too high
C)Obsessive cost cutting can shrink other competitive advantages
D)Cost differences often decline over time

Question 26

When a firm competes in a geographically defined specific area,it is using a(n)_______ strategy.

A)market focus
B)Cost
C)Differentiation
D)Integration

Question 27

Speed-based competitive advantage can be created around all of these activities EXCEPT:

A)Customer responsiveness
B)Product development cycles
C)Information sharing and technology
D)Brand loyalty

Question 28

Business strategies in emerging industries must be concerned with which of the following characteristics?

A)Proprietary technology in the pioneering firms with moderate to high amounts of competitive uncertainty
B)Low initial costs with hefty cost increases through time
C)Many entry barriers
D)Easy to obtain raw materials

Question 29

Which of these represent marketing capabilities at the decline state of industry evolution?

A)Skills in aggressively promoting products to new markets and holding existing markets and pricing flexibility
B)Ability to establish brand recognition,find niche,reduce price,solidity strong distribution relations and develop new channels
C)Cost effective means of efficient access to selected channels and markets and strong customer loyalty or dependence
D)Resources/skills to create widespread awareness and find acceptance from customers; advantageous access to distribution

Question 30

The use of preapproved online suppliers into production is a feature of which strategy?

A)Speed-based
B)Cost
C)Differentiation
D)Integration

Question 31

Which of these represent marketing capabilities at the growth stage of industry evolution?

A)Skills in aggressively promoting products to new markets and holding existing markets and pricing flexibility
B)Ability to establish brand recognition,find niche,reduce price,solidity strong distribution relations and develop new channels
C)Cost effective means of efficient access to selected channels and markets and strong customer loyalty or dependence
D)Resources/skills to create widespread awareness and find acceptance from customers; advantageous access to distribution

Question 32

The absence of rules in emerging industries presents both a _____ and a(n)_____

A)risk,opportunity
B)strength,weakness
C)problem,risk
D)strength,risk

Question 33

Resources to support high net cash overflow and initial losses and ability to use leverage effectively represent finance area's capability at which stage of industry evolution?

A)Growth
B)Introduction
C)Decline
D)Maturity

Question 34

All of the following are skills or resources that foster rapid response (speed)EXCEPT:

A)Process engineering skills
B)Excellent inbound and outbound logistics
C)High level of automation
D)Creative talent and flair

Question 35

Ability to expand capacity effectively,limit number of designs and develop standards represents the introduction stage of industry evolution for which function?

A)Production operations
B)Marketing
C)Finance
D)R & D

Question 36

Speed-based strategies are a form of

A)differentiation
B)cost leadership
C)market focus
D)Integration

Question 37

Organizational requirements to support and sustain rapid response activities include which of these?

A)Strong delegation to operating personnel
B)Subjective measurements and incentives
C)Amenities to attract highly skilled labor and creative people
D)Frequent,detained control reports

Question 38

From the standpoint of strategy formulation,the essential characteristics of an emerging industry is that

A)There are no "rules of the game"
B)It is highly regulated industry
C)The industry lifecycle essentially jumps from introduction directly to decline
D)There are way too many entry barriers

Question 39

The extent to which a business concentrates on a narrowly defined market,it is called a(n)__________ strategy.

A)Integration
B)Market focus
C)Formula facility
D)Tightly managed decentralization

Question 40

Which of these is NOT a stage of industry evolution?

A)Decline
B)Growth
C)Merge
D)Introduction

Question 41

Ability to reduce costs,develop variants and differentiate products represent the maturity stage of industry evolution capabilities which functional area?

A)Engineering and R&D
B)Marketing
C)Production operations
D)Personnel

Question 42

__________ industries are those that make products or services for which demand is growing slower than demand in the economy as a whole.

A)Mature
B)Declining
C)Growth
D)Emerging

Question 43

Which key functional area and which strategy focus are critical at the decline stage of the industry evolution?

A)Engineering; market penetration
B)Sales; consumer loyalty and market share
C)Production; successor products
D)Finance; maximum investment recovery

Question 44

For success in mature industries,business strategies require which of these features?

A)Ability to rapidly improve product qualities and performance features
B)Ability to differentiate the firm's products from competitors entering the market
C)Emphasis on process innovation that permits low-cost product design,manufacturing methods and distribution synergy
D)Gradually harvest the business

Question 45

Strategies used by firms competing in markets where the growth rate of that market from year to year had reached or is close to zero are called ________ industry strategies.

A)Mature
B)Growth
C)Emerging
D)Declining

Question 46

As an industry evolves,its rate of growth eventually

A)declines
B)stabilizes
C)increases
D)plateaus

Question 47

Slow growth or a decline in demand for an industry could be caused by

A)technological substitution
B)strong branding
C)significant differentiation
D)Integration

Question 48

Business strategies require all of these EXCEPT which feature for success in growing industries?

A)Establish strong brand recognition
B)Scale up to meet increasing demand
C)Differentiate the firm's products
D)Horizontal integration

Question 49

Business strategies in maturing industries should avoid all of these pitfalls EXCEPT which one?

A)Avoid sacrificing market share too quickly
B)Make a clear choice among three generic strategies and avoid the middle-ground approach
C)Avoid waiting too long to respond to price reductions
D)Avoid horizontal integration to acquire rival firms

Question 50

Firms in a declining industry should choose strategies that emphasize all but which one of the following themes?

A)Focus on growing segments
B)Emphasize price cutting and promotion investment to drive out weaker competitors
C)Emphasize product innovation and quality improvement
D)Emphasize production and distribution efficiency

Question 51

For success in growth industries,business strategies require which of these features?

A)Ability to rapidly improve product qualities and performance features
B)Ability to differentiate the firm's products from competitors entering the market
C)Emphasis on process innovation that permits low-cost product design,manufacturing methods and distribution synergy
D)Gradually harvest the business

Question 52

Existence of an ability to add skilled personnel motivated and loyal workforce represent personnel capabilities at which stage of the industry evolution?

A)Maturity
B)Decline
C)Introduction
D)Growth

Question 53

Which key functional area and which strategy focus are critical at the maturity stage of industry evolution?

A)Production; successor products
B)Engineering; market penetration
C)Sales; consumer loyalty and market share
D)Finance; maximum investment recovery

Question 54

Business strategies require all of these features EXCEPT which one for success in mature industries?

A)Harvest the business
B)Emphasis on cost reduction
C)Product line pruning
D)Horizontal integration

Question 55

Which key functional area and which strategy focus are critical at the growth stage of industry evolution?

A)Production; successor products
B)Engineering; market penetration
C)Sales; consumer loyalty and market share
D)Finance; maximum investment recovery

Question 56

Which of these personnel capabilities match the maturity stage of the industry evolution?

A)Capacity to reduce and relocate personnel
B)Ability to cost effectively,reduce workforce,increase efficiency
C)Flexibility in staffing and training new management
D)Existence of an ability to add skilled personnel; motivated and loyal workforce

Question 57

Which key functional area is critical at the introduction stage of industry evolution and which strategy should be focused on?

A)Production; successor products
B)Engineering; market penetration
C)Sales; consumer loyalty and market share
D)Finance; maximum investment recovery

Question 58

For success in emerging industry setting,business strategies require which of these features?

A)Ability to rapidly improve product qualities and performance features
B)Ability to differentiate the firm's products from competitors entering the market
C)Emphasis on process innovation that permits low-cost product design,manufacturing methods and distribution synergy
D)Gradually harvest the business

Question 59

Skill in quality and new feature development; ability to start developing successor product represent engineering and R&D capabilities at which stage of the industry evolution?

A)Decline
B)Introduction
C)Growth
D)Maturity

Question 60

Business strategies require all of these EXCEPT which feature for success in emerging industry setting?

A)Shape the industry's structure
B)Rapidly improve product quality
C)Strong product design skills
D)Forecast future competitors

Question 61

Targeting a particular segment of the industry for competition on a worldwide basis refers to

A)Broad-line global competition
B)Protected niche strategy
C)National focus strategy
D)Global focus strategy

Question 62

Selling present products to customers in related marketing areas by adding channels of distribution is called

A)Market development
B)Vertical acquisition
C)Turnaround strategy
D)Conglomerate diversification

Question 63

Which of these strategies are suggested by the first quadrant of the Grand Strategy Cluster?

A)Horizontal acquisition
B)Concentrated growth
C)Concentric diversification
D)Joint ventures

Question 64

Acquiring or entering businesses unrelated to a firm's current technologies,markets or products is referred to as

A)Conglomerate diversification
B)Horizontal integration
C)Retrenchment
D)Vertical integration

Question 65

Quadrant I of the Grand Strategy Selection Matrix suggests which of these strategies when the basic idea underlying the matrix is the choice of an internal or external emphasis for growth or profitability?

A)Horizontal integration
B)Conglomerate diversification
C)Market development
D)Retrenchment

Question 66

Businesses in fragmented industries can compete using all of these strategies EXCEPT

A)"Formula" facilities
B)Tightly managed decentralization
C)"Harvesting" the business
D)Specialization

Question 67

Focus strategies in fragmented industries can be pursued through:

A)A wide range of services to a single market area
B)A narrow range of products
C)Handling broad types of orders from small to very large
D)Serving the customers at a national level

Question 68

Which of these is NOT a basic option that can/should be used to pursue global market coverage?

A)Licensing
B)Harvesting the business
C)Maintaining a domestic production base and exporting
D)Establishing foreign-based plants and distribution

Question 69

The sale of a firm or a major component refers to

A)Retrenchment
B)Divestiture
C)Liquidation
D)Conglomerate diversification

Question 70

Quadrant IV of the Grand Strategy Selection Matrix suggests which of these strategies?

A)Vertical acquisition
B)Turnaround
C)Product development
D)Horizontal acquisition

Question 71

The most common approach in Quadrant III of the Grand Strategy Selection Matrix,when the basic idea underlying the matrix is the choice of an internal or external emphasis for growth or profitability is

A)Concentrated growth
B)Horizontal growth
C)Divestiture
D)Conglomerate diversification

Question 72

Seeking out countries in which governmental restraints exclude or inhibit global competitors or allow concessions or both,that are advantages to localized firms refers to

A)Broad-line global competition
B)Protected niche strategy
C)National focus strategy
D)Global focus strategy

Question 73

Quadrant II of the Grand Strategy Selection Matrix suggests which of these strategies when the basic idea underlying the matrix is the choice of an internal or external emphasis for growth or profitability?

A)Horizontal integration
B)Conglomerate diversification
C)Market development
D)Retrenchment

Question 74

________ is targeting a particular segment of the industry for competition on a worldwide basis.

A)Licensing
B)National focus strategy
C)Global focus strategy
D)Protected niche strategy

Question 75

Industries in which competition crosses national borders are called a(n)__________ industry.

A)Emerging
B)Growth
C)Global
D)Fragmented

Question 76

When a business introduces standardized,efficient,low-cost facilities at multiple locations it can be described as following which of these strategies?

A)"Formula" facilities
B)Specialization
C)Tightly managed decentralization
D)Harvesting the business

Question 77

Which of these refers to cutting back on products,markets,operations because the firm's overall competitive and financial situation cannot support commitments needed to sustain or build its operations?

A)Conglomerate diversification
B)Concentrated growth
C)Retrenchment
D)Vertical integration

Question 78

A fragmented industry is one in which:

A)Foreign firms have almost equal market shares on domestic firms
B)One firm strongly influences the industry's outcomes
C)No firm has a significant market share
D)Competitors have been beaten down by regulations

Question 79

Acquisition of firms that supply inputs such as raw materials is referred to as

A)Conglomerate diversification
B)Horizontal acquisition
C)Retrenchment
D)Vertical acquisition

Question 80

________ offers the best possibility for recouping the firm's investment.

A)Liquidation
B)Divestiture
C)Turnaround
D)Retrenchment