Question 1

Which of the following is NOT one of the risks of a cost leadership strategy?

Accepted Answer

A)  The technology that the organization has been using changes. 
B)  Achieving excessive success causes jealousy amongst competitors. 
C)  Competitors can achieve viable imitations. 
D)  Other bases for cost leadership erode. 
E)  Proximity in differentiation is lost.

Question 2

One danger of D'Aveni's concept of hypercompetition is that it may lead to an overemphasis on short-term tactics over long-term strategy.

Accepted Answer

A) True 
 B)False

Question 3

Product engineering, creative flair, and strong cooperation from channels are commonly required skills and resources for which of Porter's generic strategies?

Accepted Answer

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

Question 4

As an industry becomes hypercompetitive, firms initially respond by

Accepted Answer

A)  raising entry barriers. 
B)  moving into untapped markets. 
C)  attacking the strongholds of other firms. 
D)  competing on cost and quality. 
E)  working their way to a situation of perfect competition.

Question 5

In tacit collusion, there is no direct communication among competing firms.

Accepted Answer

A) True 
 B)False

Question 6

A method developed in the mid-1990s as an efficient means to quickly consolidate a fragmented industry can be referred to as a

Accepted Answer

A)  merger. 
B)  strategic rollup. 
C)  cost strategy. 
D)  differentiation strategy. 
E)  focus strategy.

Question 7

Disadvantages of joint ventures include all of the following EXCEPT

Accepted Answer

A)  loss of control. 
B)  lower profits. 
C)  probability of conflicts with partners. 
D)  likely transfer of technological advantage to the partner. 
E)  mutual dependence.

Question 8

SWOT analysis by itself is not a panacea for strategy.

Accepted Answer

A) True 
 B)False

Question 9

Which strategy has been used successfully by Yum! Brands to establish KFC and Pizza Hut restaurants across the globe?

Accepted Answer

A)  joint venture 
B)  licensing arrangement 
C)  strategic alliance 
D)  marketing strategy 
E)  value-chain partnership

Question 10

Too much partnering experience with the same strategic partners generates diminishing returns over time and leads to reduced performance.

Accepted Answer

A) True 
 B)False

Question 11

An example of a company following a cost focus strategy is Potlach Corporation, who makes house brands of toilet paper for Safeway and other grocery store chains.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

Business strategy focuses on improving the competitive position of a company's or business unit's products or services within the specific industry or market segment that the company or business unit serves.

Accepted Answer

A) True 
 B)False

Question 14

Niches can grow and change over time.

Accepted Answer

A) True 
 B)False

Question 15

A licensing arrangement is an agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product.

Accepted Answer

A) True 
 B)False

Question 16

SWOT is an acronym that stands for Strategy, Weaknesses, Opportunities, and Threats.

Accepted Answer

A) True 
 B)False

Question 17

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(n)

Accepted Answer

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

Question 18

One skill required of the cost leadership strategy is a strong marketing ability.

Accepted Answer

A) True 
 B)False

Question 19

All of the following reflect criticisms of the SWOT analysis EXCEPT

Accepted Answer

A)  it uses no weights to reflect priorities. 
B)  it only requires a single level of analysis. 
C)  it provides a rational link to strategy implementation. 
D)  it uses ambiguity in words and phrases. 
E)  it generates lengthy lists.

Question 20

Business strategy is composed of

Accepted Answer

A)  corporate and competitive strategy. 
B)  functional and divisional strategy. 
C)  competitive and cooperative strategy. 
D)  corporate and cooperative strategy. 
E)  divisional and competitive strategy.

Exam 6: Strategy Formulation: Situation Analysis and Business Strategy

Which of the following is NOT one of the risks of a cost leadership strategy?

One danger of D'Aveni's concept of hypercompetition is that it may lead to an overemphasis on short-term tactics over long-term strategy.

Product engineering, creative flair, and strong cooperation from channels are commonly required skills and resources for which of Porter's generic strategies?

As an industry becomes hypercompetitive, firms initially respond by

In tacit collusion, there is no direct communication among competing firms.

A method developed in the mid-1990s as an efficient means to quickly consolidate a fragmented industry can be referred to as a

Disadvantages of joint ventures include all of the following EXCEPT

SWOT analysis by itself is not a panacea for strategy.

Which strategy has been used successfully by Yum! Brands to establish KFC and Pizza Hut restaurants across the globe?

Too much partnering experience with the same strategic partners generates diminishing returns over time and leads to reduced performance.

An example of a company following a cost focus strategy is Potlach Corporation, who makes house brands of toilet paper for Safeway and other grocery store chains.

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

Business strategy focuses on improving the competitive position of a company's or business unit's products or services within the specific industry or market segment that the company or business unit serves.

Niches can grow and change over time.

A licensing arrangement is an agreement in which the licensing firm grants rights to another firm in another country or market to produce and/or sell a product.

SWOT is an acronym that stands for Strategy, Weaknesses, Opportunities, and Threats.

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(n)

One skill required of the cost leadership strategy is a strong marketing ability.

All of the following reflect criticisms of the SWOT analysis EXCEPT

Business strategy is composed of