Question 1

During a recession, a high-end beverage producer facing strong competition in a saturated market has decided to phase out all its flagship products and introduce a new line of second-label beverages at lower price points in reaction to its falling market share. Would this type of a reactive strategy revive its position? Why or why not?

Accepted Answer

The answer of During a recession, a high-end beverage producer...

Question 2

What is the connection between a company's strategy and its quest for sustainable competitive advantage?

Accepted Answer

The answer of What is the connection between a company's...

Question 3

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

Accepted Answer

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.

Question 4

An emergent strategy is best exemplified by a(n)

Accepted Answer

A) local hardware store that offers a 10 percent discount for seniors on the first Wednesday of every month. 
B) online book reseller that diversifies into custom book publishing. 
C) oil-change franchisor that continues geographical expansion despite a recession. 
D) healthy food manufacturer that integrates forward into drive-thru fast health food restaurants. 
E) microbrewer that invests in building community water wells during a drought.

Question 5

A mobile on-demand transportation company with an established brand name uses a unique mobile app and GPS mapping technology to reduce the time for drivers to pick up passengers and take them to their destinations. It then gives the mobile apps away free to all riders. Which of the five generic strategies is this company using?

Accepted Answer

The answer of A mobile on-demand transportation company with an...

Question 6

The customer value proposition lays out the company's approach to

Accepted Answer

A) meeting profitability guidelines without the risk of losing customers. 
B) operating efficiently given the current level of customers. 
C) embracing rival company approaches to gaining customers. 
D) satisfying customer wants and needs at a price that customers will consider a good value. 
E) assuring that the company makes enough profits based on its per-unit cost.

Question 7

To distinguish a winning strategy from a mediocre or losing strategy, a strategic manager should ask which question?

Accepted Answer

A) How good is the company's business model? 
B) Is the company a technology leader? 
C) Does the company have low prices in comparison to rivals? 
D) Is the company putting too little emphasis on behaving in an ethical and socially responsible manner? 
E) How well does the strategy fit the company's situation?

Question 8

Explain why a company's strategy cannot be completely planned out in advance and why crafting a company's strategy cannot be a one-time, once-and-for-all managerial exercise. Identify at least three factors that account for why company strategies evolve.

Accepted Answer

The answer of Explain why a company's strategy cannot be...

Question 9

Good strategy plus good strategy execution equals good management.Justify and explain your answer.

Accepted Answer

A) True 
 B)False

Question 10

Why is it important to craft a business model?

Accepted Answer

A) Because it sets forth management's game plan for maximizing profits for shareholders 
B) Because it details exactly how management's strategy will result in the achievement of the company's strategic intent 
C) Because it is a part of an operating model that focuses on delivering excellence and creating value for external shareholders and internal labor force 
D) Because it sets forth the key components of the enterprise's business approach, indicates how revenues will be generated, and makes a case for why the strategy can deliver value to customers in a profitable manner 
E) Because it sets forth management's long-term action plan to match the business standards set by formidable rivals

Question 11

A deliberate strategy is best exemplified by a(n)

Accepted Answer

A) popular downtown theater that has been staging plays and showing films decides to begin booking rock and roll acts. 
B) airline company that cuts frills in order to cope with increasing fuel prices. 
C) IT firm that trims jobs during a recession. 
D) smartphone manufacturer that divests its tablet production branch after not gaining market share. 
E) online jewelry reseller that discontinues its line of turquoise rings due to lack of demand.

Question 12

The difference between a company's strategy and a company's business model is that

Accepted Answer

A) a company's strategy is management's game plan for achieving strategic objectives while its business model is management's game plan for achieving financial objectives. 
B) the strategy concerns how to compete successfully and the business model concerns how to operate efficiently. 
C) a company's strategy is management's game plan for realizing the strategic vision, whereas a company's business model is the game plan for accomplishing its corporate responsibility goals. 
D) strategy relates broadly to a company's competitive moves and business approaches while its business model relates to whether the revenues flowing from the strategy are sufficient to cover costs and realize a profit. 
E) a company's strategy is solely concerned with how to please customers while its business model is solely concerned with how to please shareholders.

Question 13

Consider the following five companies and their situations. •Company A is an established online fantasy sports gaming company that has been accused of game-rigging, bribes and kickbacks.
•Company B, a ride share company, has delayed its planned initial public offering due to reports of having an inhospitable workplace characterized by sexual harassment and discrimination.
•Company C, a pharmaceutical manufacturer, charges higher prices for life-saving drugs in some countries than it charges in others.
•Company D, a manufacturer and marketer of high-end consumer electronics, has a strict Code of Conduct that requires its suppliers to comply with several standards regarding safe working conditions, fair treatment of workers, and environmentally safe manufacturing.
•Company E, a pizza delivery business, is a being boycotted by customers and losing sponsored tie-ins with professional sports due to racist comments by its founder and CEO.
Which of the above companies is distinguished by an ethical strategy as opposed to an unethical or flawed strategy?

Accepted Answer

A) Company A 
B) Company B 
C) Company C 
D) Company D 
E) Company E

Question 14

Troopline Inc., an online laptop retailer, sells laptops of similar range and features as other online laptop retailers. Which of the value propositions would not benefit the company?

Accepted Answer

A) providing free delivery of purchased laptops 
B) allowing customers to pay through gift coupons 
C) updating the site with better high-resolution pictures of laptops 
D) providing mobile friendly version of the site and compatible apps for mobile users 
E) establishing a comparison feature tab that allows customers to compare offerings from other online retailers

Question 15

A company achieves sustainable competitive advantage when

Accepted Answer

A) it has a profitable business model. 
B) a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors. 
C) it is able to maximize shareholder wealth. 
D) it is consistently able to achieve both its strategic and financial objectives. 
E) its strategy and its business model are well matched and in sync.

Question 16

In evaluating proposed or existing strategies managers should

Accepted Answer

A) initiate new initiatives even though they don't seem to match the company's internal and external situation. 
B) scrutinize the company's existing strategies on a regular basis to ensure they offer a good strategic fit, create a competitive advantage, and result in above-average performance. 
C) evaluate the firm's business model at least every three years. 
D) ensure core capabilities are incorporated for establishing a competitive advantage. 
E) align existing strategies with new strategies to emphasize incremental gains.

Question 17

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

Accepted Answer

A) an assured profitability strategy. 
B) a broad market entry strategy. 
C) an emergent strategy. 
D) unlimited revenue generation. 
E) a proactive strategy.

Question 18

A seldom used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage is

Accepted Answer

A) striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage. 
B) outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, or technological superiority. 
C) developing competitively valuable resources and capabilities that rivals cannot easily match, copy, or trump with capabilities of their own. 
D) focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche. 
E) copying the attributes of a popular product or service.

Question 19

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

Accepted Answer

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.

Question 20

A creative, distinctive strategy that delivers a sustainable competitive advantage is important because

Accepted Answer

A) without a competitive advantage a company cannot become the industry leader. 
B) without a competitive advantage a company is likely to fall into bankruptcy. 
C) crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance. 
D) a competitive advantage is what enables a company to achieve its strategic objectives. 
E) how a company goes about trying to please customers and outcompete rivals is what enables senior managers to choose an appropriate strategic vision for the company.

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