Deck 5: Strategy Formulation: Situation Analysis and Business Strategy

Question 1

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

A) competitive scope.
B) differentiation.
C) concentration.
D) diversification.
E) lower cost.

Answer 1

B

Question 2

Which of Porter's competitive strategies concentrates on a particular buyer group, product line segment, or geographic market so that a company can serve its market more effectively?

A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus

Answer 2

C

Question 3

A SFAS Matrix differs from the EFAS and IFAS Tables by adding a new column called

A) weight.
B) duration.
C) rating.
D) comments.
E) weighted score.

Answer 3

B

Question 4

Which offensive tactic utilizes a head-to-head approach with the firm's competitor by matching every category of competition from price to promotion to distribution channel?

A) flanking maneuver
B) bypass attack
C) encirclement
D) frontal assault
E) guerilla warfare

Question 5

A corporation's specific competitive role, which is so well-suited to the firm's internal and external environment that other corporations are NOT likely to challenge or dislodge it, is called a

A) propitious niche.
B) strategic fit.
C) common thread.
D) business screen.
E) implicit strategy.

Question 6

Which offensive tactic proposes an indirect approach against the established competitor such as changing the rules of the game?

A) flanking maneuver
B) bypass attack
C) encirclement
D) frontal assault
E) guerilla warfare

Question 7

An acronym for the assessment of the external and internal environments of the business corporation in the process of strategy formulation/strategic planning is

A) P.E.T.
B) M.B.O.
C) S.W.O.T.
D) S.B.U.
E) R.O.I.

Question 8

As an industry matures while overcoming fragmentation and becomes dominated by a small number of large companies, it tends to become an)

A) united industry.
B) fragmented industry.
C) consolidated industry.
D) isolated industry.
E) integrated industry.

Question 9

Midamar Corporation, the maker of halal foods, successfully follows a strategy of

A) cost leadership.
B) cost focus.
C) differentiation.
D) differentiation focus.
E) cost differentiation.

Question 10

A tactic is defined by the text as

A) a specific operating plan specifying how a strategy is to be implemented in terms of how, when, and where it is to be put into action.
B) the first company to manufacture and sell a new product or service.
C) any action by a company or business unit that provides a direct or indirect indication of its intentions, motives, goals, or internal situation.
D) policies which link formulation and implementation of the strategy.
E) the ability to adapt a product or delivery system more closely to buyers' needs.

Question 11

Focus strategies will likely predominate when many small and medium-sized local companies compete for relatively small shares of the total market in an)

A) united industry.
B) fragmented industry.
C) consolidated industry.
D) isolated industry.
E) integrated industry.

Question 12

Which of Porter's competitive strategies recommends that a company emphasize a particular buyer group or geographic market and attempts to serve only this niche market in order to be more efficient?

A) differentiation
B) cost leadership
C) differentiation focus
D) competitive advantage
E) cost focus

Question 13

Which defensive tactic acts to block a challenger's logical avenues of attack such as exclusive agreements with distributors or an increase scale economies to reduce unit costs?

A) guerilla warfare
B) lower the inducement for attack
C) encirclement
D) raise structural barriers
E) increase expected retaliation

Question 14

Business strategy focuses on

A) ensuring that the company maintains the existing market share that it has historically enjoyed.
B) improving the competitive position of a corporation's products or services within a specified market segment.
C) providing adequate shareholders' return on investment.
D) preventing the competition from gaining a competitive edge by undermining their marketing plan.
E) recovering the competitive lead by using all available resources that the company can provide.

Question 15

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

A) competitive scope.
B) differentiation.
C) concentration.
D) diversification.
E) lower cost.

Question 16

The technique that illustrates how management can match the external opportunities and threats with its strengths and weaknesses to yield four sets of strategic alternatives is called a an)

A) IFAS Table.
B) EFAS Table.
C) SFAS Table.
D) TOWS Matrix.
E) Issues Priority Matrix.

Question 17

Which offensive tactic advocates attacking a part of the market where the competitor is weak?

A) flanking maneuver
B) bypass attack
C) encirclement
D) frontal assault
E) guerilla warfare

Question 18

According to Porter, a business unit in a competitive marketplace with no competitive advantage is

A) achieving synergy.
B) practicing innovative leadership.
C) stuck on the middle.
D) not goal directed.
E) last in line.

Question 19

When lower cost and differentiation strategies have a narrow focus on a market niche they are simply called

A) cost leadership and differentiation.
B) concentration and differentiation.
C) cost focus and differentiation focus.
D) competitive scope and focused differentiation.
E) diversification and concentration.

Question 20

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

A) competitive scope.
B) differentiation.
C) concentration.
D) diversification.
E) lower cost.

Question 21

The kind of strategic alliance in which a company forms a strong and close long-term relationship for mutual advantage with a key supplier or distributor is the

A) joint venture.
B) licensing agreement.
C) value-chain partnership.
D) mutual service consortia.
E) holding company.

Question 22

Which of the following is NOT a reason for forming a strategic alliance?

A) obtain access to specific markets
B) reduce financial risk
C) reduce political risk
D) achieve competitive advantage
E) develop secret proprietary technology.

Question 23

The kind of strategic alliance in which there is a partnership of similar companies in similar industries who pool their resources to gain a benefit that is too expensive to develop alone is the

A) joint venture.
B) licensing agreement.
C) value-chain partnership.
D) mutual service consortia.
E) holding company.