Question 1

Which of the following is a danger in choosing a differentiation strategy?

Accepted Answer

A)   Focusing only on physical characteristics of a product or service and ignoring important psychological factors, such as status, prestige, image, and customer service
B)   Choosing a market that is not large enough to be profitable
C)   Misunderstanding the firm's true cost drivers
D)   All of the above A

Question 2

Large companies have a natural advantage over small firms when it comes to preparing a strategic plan.

Accepted Answer

A) True 
 B)False  False

Question 3

________ spell(s) out the "ends" an organization is to achieve; ________ define(s) the "means" for achieving the ends.

Accepted Answer

A)   Mission, goals, and objectives; strategy
B)   Key success factors; strategy
C)   Strategy; mission, goals, and objectives
D)   Strategy; vision A

Question 4

Which of the following is NOT a characteristic of the strategic management procedure for a small company?

Accepted Answer

A)   It should use a relatively short planning horizon-two years or less, typically.
B)   It should begin with an extensive objective-setting session.
C)   It should encourage the participation of employees and even outsiders to improve the reliability and creativity of the resulting plan.
D)   It should allow for flexibility and not be overly structured.

Question 5

Kevin Abt noticed that people were cooking meals in their homes less often but wanted to avoid the hassle of going out to eat. They wanted to "eat in" without cooking. Abt launched a company, Takeout Taxi, that delivers restaurant-prepared food to his customers' homes and businesses. Takeout Taxi is the result of a(n):

Accepted Answer

A)   strength.
B)   weakness.
C)   opportunity.
D)   threat.

Question 6

Goals are the broad, long-range attributes that a business seeks to accomplish; objectives are more specific targets of performance.

Accepted Answer

A) True 
 B)False

Question 7

The balanced scorecard ideally looks at a business from four important perspectives relating to:

Accepted Answer

A)   low-cost, differentiation, focus, and initiative.
B)   customers, buyers, suppliers, and substitute products.
C)   customers, internal factors, capital, and human resources.
D)   customers, internal factors, innovation, and finances.

Question 8

A danger of cost-leadership is that a company may misunderstand what processes actually drive its true costs.

Accepted Answer

A) True 
 B)False

Question 9

Strengths and weaknesses are ________ to the organization.

Accepted Answer

A)   internal factors
B)   external factors
C)   internal and/or external factors
D)   factors not belonging

Question 10

Assume you own a small print shop. Who are your competitors and why is it important for you to monitor your competitors' activities? Describe at least five techniques you might use to monitor competitors' strategies and actions ethically and inexpensively.

Accepted Answer

The answer of Assume you own a small print shop....

Question 11

Mini-Case 3-1: Finding a Competitive Advantage
Copreneurs Ed and Yolanda recently opened a vintage used car lot called Cherry Lane. They sell antique and collectible cars on consignment for the owners at a fee of 30 percent of the selling price. The price is further reduced by 10 percent if a particular car is not sold within the first 30 days. One of the first customers convinced Yolanda that this was the only fair thing to do, and in an effort to provide something for "the cost conscious buyer," she provided what she thought was excellent customer service and implemented the idea.
Ed and Yolanda feel Cherry Lane has an ideal location. It is located adjacent to the city's baseball stadium, alongside the freeway in the center of all the other car dealerships. Although Cherry Lane has significant foot traffic, most people never make offers to buy.
In an effort to increase sales, Ed and Yolanda are working on a new marketing strategy that they believe should be quite different from the "shotgun" approach they had been using over the last few months.
-As Ed and Yolanda begin the strategic planning process, what steps should they take?

Accepted Answer

The answer of Mini-Case 3-1: Finding a Competitive Advantage
Copreneurs Ed...

Question 12

The three components of intellectual capital are human, structural, and customer.

Accepted Answer

A) True 
 B)False

Question 13

Define each of the following terms and give an example of each: strengths, weaknesses, opportunities, and threats.

Accepted Answer

The answer of Define each of the following terms and...

Question 14

A company's mission statement should be lengthy and use fancy jargon to impress outsiders.

Accepted Answer

A) True 
 B)False

Question 15

A balanced scorecard looks at a business from four important perspectives: competitor, internal, innovation and learning, and financial.

Accepted Answer

A) True 
 B)False

Question 16

A company's strategy spells out the ends the business wants to achieve, and its mission, goals, and objectives define the means for reaching them.

Accepted Answer

A) True 
 B)False

Question 17

When creating a balanced scorecard for his or her company, an entrepreneur should establish goals for each critical indicator of company performance and create meaningful measures for each one.

Accepted Answer

A) True 
 B)False

Question 18

The focal point of the entire strategic plan and the competitive strategy chosen should be the customer.

Accepted Answer

A) True 
 B)False

Question 19

As business and competitive conditions change, so should a small company's mission statement.

Accepted Answer

A) True 
 B)False

Question 20

It is unwise for entrepreneurs to monitor competitors' strategies and actions because such activities require them to engage in illegal or unethical behavior.

Accepted Answer

A) True 
 B)False

Exam 3: Designing a Competitive Business Model and Building a Solid Strategic Plan

Which of the following is a danger in choosing a differentiation strategy?

Large companies have a natural advantage over small firms when it comes to preparing a strategic plan.

spell(s) out the "ends" an organization is to achieve; define(s) the "means" for achieving the ends.

Which of the following is NOT a characteristic of the strategic management procedure for a small company?

Goals are the broad, long-range attributes that a business seeks to accomplish; objectives are more specific targets of performance.

The balanced scorecard ideally looks at a business from four important perspectives relating to:

A danger of cost-leadership is that a company may misunderstand what processes actually drive its true costs.

Strengths and weaknesses are ________ to the organization.

Assume you own a small print shop. Who are your competitors and why is it important for you to monitor your competitors' activities? Describe at least five techniques you might use to monitor competitors' strategies and actions ethically and inexpensively.

The three components of intellectual capital are human, structural, and customer.

Define each of the following terms and give an example of each: strengths, weaknesses, opportunities, and threats.

A company's mission statement should be lengthy and use fancy jargon to impress outsiders.

A balanced scorecard looks at a business from four important perspectives: competitor, internal, innovation and learning, and financial.

A company's strategy spells out the ends the business wants to achieve, and its mission, goals, and objectives define the means for reaching them.

When creating a balanced scorecard for his or her company, an entrepreneur should establish goals for each critical indicator of company performance and create meaningful measures for each one.

The focal point of the entire strategic plan and the competitive strategy chosen should be the customer.

As business and competitive conditions change, so should a small company's mission statement.

It is unwise for entrepreneurs to monitor competitors' strategies and actions because such activities require them to engage in illegal or unethical behavior.