Question 1

Incentives based on meeting strict quantitative targets are a common organizational requirement for which of Porter's generic competitive strategies?

Accepted Answer

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

Question 2

Collusion

Accepted Answer

A)   may be explicit or tacit.
B)   may be tacit and therefore legal.
C)   is rarely practiced by competing firms.
D)   cannot occur without direct communication among firms.
E)   is a popular competitive strategy. A

Question 3

What is the impact of hypercompetition on competitive advantage?

Accepted Answer

Hypercompetition reflects the increasing difficulty of sustaining a competitive advantage over time.As a result of this erosion of competitive advantage,companies must constantly work to improve their advantage.Firms must constantly seek new ways to lower costs and add value to their products and services.

Question 4

Which strategy is a firm following if it provides a unique and superior value in a narrow market?

Accepted Answer

A)   differentiation focus
B)   cost leadership
C)   differentiation
D)   cost focus
E)   stuck in the middle

Question 5

One desired outcome of analyzing strategic factors is identifying niches where an organization can use its ________ to take advantage of a particular market opportunity.

Accepted Answer

A)   differentiating capabilities.
B)   distinctive competencies.
C)   situational proficiency.
D)   core competencies.
E)   distinctive characteristics.

Question 6

According to Barney,under which condition would tacit collusion most likely be successful?

Accepted Answer

A)   There is a large number of identifiable competitors.
B)   Costs vary among firms.
C)   One firm tends to act as the price leader.
D)   Sales are characterized by a low frequency of large orders.
E)   There are low barriers to entry in the industry.

Question 7

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

Accepted Answer

The answer of What is a propitious niche? Provide an...

Question 8

The last stage of a hypercompetitive industry is reached when the remaining large global competitors

Accepted Answer

A)   raise entry barriers.
B)   move into untapped markets.
C)   attack the strongholds of other firms.
D)   compete on cost and quality.
E)   work their way to a situation of perfect competition in which no one has any advantage and profits are minimal.

Question 9

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

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

Question 10

A cost leader's lower costs allow it to continue to earn profits during times of heavy competition.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

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

Question 12

One success factor to a strategic alliance is the ability to identify likely partnering risks and deal with them when the alliance is formed.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

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

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

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

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

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

Question 18

When firms follow each other's lead to reduce the level of competition such as GE and Westinghouse did in steam turbines,it is referred to as

Accepted Answer

A)   explicit collusion.
B)   a strategic alliance.
C)   a mutual service consortium.
D)   conscious parallelism.
E)   partnering.

Question 19

One risk of a cost leadership strategy is that the technology for production or of products may change.

Accepted Answer

A) True 
 B)False

Question 20

Tacit collusion

Accepted Answer

A)   involves direct communication among competing firms.
B)   is most likely to be successful if there are many competitors.
C)   is seen with conscious parallelism as practiced by GE and Westinghouse in the pricing of turbine engines.
D)   is not illegal.
E)   is most effective when the industry does not have a firm that acts as a price leader.

Exam 6: Strategy Formulation: Business Strategy

Incentives based on meeting strict quantitative targets are a common organizational requirement for which of Porter's generic competitive strategies?

Collusion

What is the impact of hypercompetition on competitive advantage?

Which strategy is a firm following if it provides a unique and superior value in a narrow market?

One desired outcome of analyzing strategic factors is identifying niches where an organization can use its ________ to take advantage of a particular market opportunity.

According to Barney,under which condition would tacit collusion most likely be successful?

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

The last stage of a hypercompetitive industry is reached when the remaining large global competitors

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?

A cost leader's lower costs allow it to continue to earn profits during times of heavy competition.

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

One success factor to a strategic alliance is the ability to identify likely partnering risks and deal with them when the alliance is formed.

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

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

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

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

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

When firms follow each other's lead to reduce the level of competition such as GE and Westinghouse did in steam turbines,it is referred to as

One risk of a cost leadership strategy is that the technology for production or of products may change.

Tacit collusion