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Business strategy, as distinct from corporate strategy, is chiefly concerned with
A. Deciding what new businesses to enter, which existing businesses to get of and which existing business to remain in
B. Forging actions and approaches to compete successfully in a particular line of business
C. Making sure the strategic intent of a particular business is in step with the company's overall strategic intent and strategy
D. Coordinating the competitive approaches of a company's different business units
E. What business model to employ in each of the company's different businesses

B

Functional strategies
A. Concern the actions, approaches and practices to be employed in managing particular functions or business processes or key activities within a business
B. Specify what actions a company should take to resolve specific strategic issues and problems
C. Are normally crafted by operating-level managers
D. Are concerned with how to unify the firm's several different operating strategies into a cohesive whole
E. Are normally crafted by the company's CEO and other senior executives

A

The primary role of a functional strategy is to
A. Unify the company's various operating-level strategies
B. Specify how to build and strengthen the skills, expertise and competencies needed to execute operating-level strategies successfully
C. Support and add power to the corporate-level strategy
D. Support the overall business strategy and competitive approach
E. Create compatible degrees of strategic intent among a company's different business functions

D

Operating strategies concern
A. What the firm's operating departments are doing and plan to do to unify the company's functional and business strategies
B. The specific plans for building competitive advantage in each major department and operating unit
C. The relatively narrow strategic initiatives and approaches for managing key operating units within a business (plants, distribution centers, geographic units) and for performing strategically significant operating tasks (maintenance, shipping, inventory control, purchasing, advertising) in ways that support functional strategies and the overall business strategy

C

Management's direction-setting, strategy-making effort is not complete until
A. The pieces of a company's strategy up and down the strategy pyramid are cohesive and mutually reinforcing, fitting together like a jigsaw puzzle
B. The mission and strategic intent of each functional area and each operating unit are agreed to by the whole management team
C. The company's board of directors has officially approved the strategic vision, objectives and strategy proposed by top management

A

A company's strategy is not at full power until
A. The company's board of directors eliminates any conflicts and inconsistencies in the missions, objectives and strategies of all the company's various organizational units
B. The CEO and other senior executives review the entire strategy piece by piece and make any needed adjustments in those strategy pieces which are not in sync
C. Its many pieces are united and fit together like a jigsaw puzzle

C

A company's strategic plan consists of
A. Its objectives and its strategy for achieving them
B. A vision of where it is headed, a set of performance targets and a strategy to achieve them
C. Its strategy and management's specific, detailed plans for implementing it

B

Which of the following is not among the principal managerial tasks associated with managing the strategy execution process?
A. Ensuring that policies and procedures facilitate rather than impede effective execution
B. Creating a company culture and work climate conducive to successful strategy implementation and execution
C. Surveying employees on how they think costs can be reduced and how employee morale and job satisfaction can be improved

C

Management is obligated to monitor new external developments, evaluate the company's progress and make corrective adjustments in order to
A. Determine whether the company has a balanced scorecard for judging its performance
B. Decide whether to continue or change the company's strategic vision, objectives, strategy and/or strategy execution methods
C. Keep the company's board of directors well-informed about the company's future outlook

B

The primary roles/obligations of a company's board of directors in the strategy-making, strategy-executing process include
A. Playing the lead role in forming the company's strategy and then directly supervising the efforts and actions of senior executives in implementing and executing the strategy
B. Providing guidance and counsel to the CEO in carrying out his/her duties as chief strategist and chief strategy implementer
C. Overseeing the company's direction, strategy and business approaches and evaluating the caliber of senior executives' strategy-making and strategy-executing skills

C

The obligations of an investor-owned company's board of directors in the strategy-making, strategy-executing process include
A. Coming up with compelling strategy proposals of their own to debate against those put forward by top management
B. Taking the lead in formulating the company's strategic plan but then delegating the task of implementing and executing the strategic plan to the company's CEO and other senior executives
C. Taking the lead in developing the company's business model and strategic vision
D. Overseeing the company's financial accounting and financial reporting practices and evaluating the caliber of senior executives' strategy-making/strategy-executing skills

D

Which one of the following is not among the chief duties/responsibilities of a company's board of directors insofar as the strategy-making, strategy-executing process is concerned?
A. Hiring and firing senior-level executives and working with the company's chief strategic planning officer to improve the company's strategy when performance comes up short of expectations
B. Being inquiring critics and exercising strong oversight over the company's direction, strategy and business approaches
C. Evaluating the caliber of senior executives' strategy-making/strategy-executing skills

A

A company's "macroenvironment" refers to
A. The industry and competitive arena in which the company operates
B. General economic conditions plus the factors driving change in the markets where a company operates
C. All the relevant forces and factors outside a company's boundariesgeneral economic conditions, population demographics, societal values and lifestyles, technological factors, governmental legislation and regulation and closer to home, the industry and competitive arena in which it operates

C

Which one of the following is not part of a company's macroenvironment?
A. Conditions in the economy at large
B. Population demographics and societal values and lifestyles
C. Technological factors and governmental regulations and legislation
D. The industry and competitive environment arena in which the company operates
E. The company's resource strengths, resource weaknesses and competitive capabilities

E

Which of the following is not a major question to ask in thinking strategically about industry and competitive conditions in a given industry?
Refer To: 03-03
A. How many companies in the industry have good track records for revenue growth and profitability?
B. What strategic moves are rivals likely to make next?
C. What are the key factors for future competitive success?

A

Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as
A. The forces driving change in the industry
B. The dominant economic features of the industry in which the company operates
C. The kinds of competitive forces industry members are facing and the strength of each competitive force
D. The key factors influencing future competitive success in the industry
E. All of the above

E

Which of the following is not a factor to consider in identifying an industry's dominant economic features?
A. Market size and growth rate
B. The extent of backward and forward integration and buyer needs and requirements
C. Whether the products or services of rival firms are becoming more or less differentiated
D. How strong driving forces and competitive forces are

D

Which of the following is not a relevant consideration in identifying an industry's dominant economic features?
A. Market size and growth rate, the geographic scope of competitive rivalry and demand-supply conditions
B. The extent to which economies of scale and learning/experience curve effects are present
C. How many strategic groups the industry has and which ones are most profitable and least profitable

C

The state of competition in an industry is a function of
A. The competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival firms in the industry
B. Competitive pressures coming from the attempts of companies in other industries attempting to win buyers over to their substitute products
C. Competitive pressures associated with the threat of new entrants into the marketplace
D. Competitive pressures associated with the bargaining power of suppliers and customers
E. All of these

E

The nature and strength of the competitive forces that prevail in an industry are generally a joint product of
A. The pressures induced by the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry
B. The threat that firms outside the industry will decide to enter the market
C. The attempts of companies in other industries to win buyers over to their own substitute products
D. Competitive pressures stemming from the bargaining power of both suppliers and buyers
E. All of these

E

Which of the following is not one of the five typical sources of competitive pressures?
A. The power and influence of industry driving forces
B. The bargaining power of suppliers and seller-supplier collaboration
C. The threat of new entrants into the market

A

The most powerful of the five competitive forces is usually
A. The competitive pressures that stem from the ready availability of attractively-priced substitute products
B. The competitive pressures associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry
C. The benefits that emerge from close collaboration with suppliers and the competitive pressures that such collaboration creates

B

Typically, the weakest of the five competitive forces in an industry is/are:
A. The threat posed by potential new entrants
B. The bargaining power and leverage that suppliers are able to exercise
C. The competitive pressures that stem from the ready availability of attractively-priced substitute products
D. The bargaining power and leverage that buyers are able to exercise
E. None of the above is typically weakest

E

Competitive jockeying and market maneuvering among industry rivals
A. Determines whether the industry's strategic group map will be static or dynamic
B. Centers around collaborative efforts to overcome the bargaining power of powerful suppliers and powerful buyers
C. Is usually an industry's strongest driving force
D. Is usually one of the two or three weakest competitive forces because of the close familiarity that rivals have for one another's likely next moves and the ability to make advance preparations for countering such moves
E. Is ever-changing as fresh offensive and defensive moves are initiated and as rivals emphasize first one mix of competitive weapons and tactics and then another

E

Using the five-forces model of competition to determine what competition is like in a given industry involves
A. Building the picture of competition in three steps: (1) identifying the specific competitive pressures associated with each of the five competitive forces; (2) evaluating how strong the pressures comprising each competitive force are; and (3) determining whether the collective impact of all five competitive forces is conducive to earning attractive profits

A

What makes the marketplace a competitive battlefield is
A. The race of industry members to build strong defenses against the industry's driving forces
B. The constant jockeying of industry members to strengthen their standing with buyers and win a competitive edge over rivals
C. The ongoing race among rival sellers to have the highest quality product

B

Factors that cause the rivalry among competing sellers to be weak include
A. Low buyer switching costs and rival sellers that are relatively equal is size and capability
B. Rapid growth in buyer demand and high buyer switching costs
C. Few industry rivals that any one company's actions can easily be anticipated and countered by its rivals

B

Which one of the following does not cause the rivalry among competing sellers to be weak?
A. High buyer switching costs
B. Rapid growth in buyer demand
C. Industry conditions that tempt rivals to use price cuts or other competitive weapons to boost unit sales
D. Low barriers to entry

D

Factors that tend to result in weak rivalry among competing sellers include
A. Low buyer switching costs and low barriers to entry
B. Rapid growth in buyer demand, high buyer costs to switch brands and so many industry rivals that any one company's actions have little impact on rivals' businesses
C. Weakly differentiated products among rival sellers

B

The rivalry among competing sellers tends to be less intense when
A. Industry conditions tempt competitors to use price cuts or other competitive weapons to boost unit sales
B. Buyer demand is weak and many sellers have excess capacity and/or inventory
C. Industry rivals are not particularly aggressive or active in making fresh moves to improve their market standing and business performance

C

Rivalry among competing sellers is generally more intense when
A. There are relatively few industry key success factors and rivals have highly differentiated products
B. The industry's driving forces are strong and rivals have strongly differentiated products
C. Barriers to entry are moderately high and the pool of likely entry candidates is small
D. Rivals are active in making fresh moves to lower prices, introduce new products, increase promotional efforts and advertising and otherwise gain sales and market share

D

Rivalry among competing sellers grows in intensity when
A. Rivals' products/services are sold at widely varying prices and there are only 2-4 rivals
B. Rivals have highly differentiated products and buyer demand is growing rapidly
C. There are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members
D. The products/services of rivals are strongly differentiated and buyers have high switching costs
E. Buyer demand is growing slowly and the industry is composed of 6 to 10 competitors that are fairly equal in size and competitive capability

E

The rivalry among competing firms tends to be more intense
A. When demand for the product is growing slowly, one or maybe several industry members have powerful and successful competitive strategies, buyers have low switching costs and the actions of any one company to attract more customers and boost market share have strong direct impact on the businesses of rivals
B. When the products/services of rival sellers are strongly differentiated and buyer demand is strong
C. When rivals are relatively content with their market position

A

The competitive force of rival firms' jockeying for better market positions, higher sales and market shares and competitive advantage
A. Is stronger when firms strive to be low-cost producers than when they use differentiation and focus strategies
B. Is typically a weaker competitive force than is the threat of entry of new rivals
C. Is largely unaffected by whether industry conditions tempt rivals to use price cuts or other competitive weapons to boost unit sales
D. Tends to intensify when strong companies outside the industry acquire weak firms in the industry and launch aggressive, well-funded moves to transform the acquired companies into strong market contenders

D

Which of the following is not among the factors that affect whether competitive rivalry among participating firms is strong, moderate or weak?
A. Whether the products of rival sellers are strongly or weakly differentiated
B. Whether demand for the industry's product is growing rapidly or slowly
C. The degree to which rivals are satisfied with their current market position
D. Whether industry driving forces are strong or weak

D

) In analyzing the strength of competition among rival firms, an important consideration is
A. The potential for buyers to exercise strong bargaining power
B. The diversity of competitors in terms of visions, strategic intents, objectives, strategies, resources and countries of origin
C. The number of firms pursuing differentiation strategies versus the number pursuing low-cost leadership strategies and focus strategies

B

The intensity of rivalry among competing sellers does not depend on whether
A. The industry has more than two strong driving forces and whether the industry has more than 2 strategic groups
B. Competitors are diverse in terms of visions, strategic intents, objectives, strategies, resources and countries of origin
C. Strong companies outside the industry have acquired weak firms in the industry and are launching aggressive, well-funded moves to transform the acquired companies into strong market contenders

A

Rivalry among competing sellers tends to be more intense when
A. Competitors are very unequal in size and capability, such that small competitors must really scramble to even survive
B. Buyer switching costs are high and market demand is growing rapidly
C. Several competitors are under pressure to improve their market share or profitability and launch fresh strategic initiatives to attract more buyers and bolster their business position

C

In which one of the following instances is rivalry among competing sellers not more intense?
A. When certain competitors are dissatisfied with their market position and make moves to bolster their standing
B. When strong companies outside the industry acquire weak firms in the industry and launch aggressive moves to transform their newly-acquired competitors into stronger market contenders
C. When competitors are fairly equal in size and capability
D. When the products of rivals are weakly differentiated, buyer switching costs are low and market demand is growing slowly
E. When there are so many industry rivals that the impact of any one company's actions is spread thinly across all industry members

E

Potential entrants are more likely to be deterred from actually entering an industry when
A. Incumbent firms have previously been aggressive in defending their market positions against entry
B. Incumbent firms are complacent
C. Buyers are not particularly price sensitive and the industry already contains a dozen or more rivals

A

Competitive pressures associated with the threat of entry are greater when
A. Incumbent firms are unable or unwilling to strongly contest the entry of newcomers
B. Newcomers can expect to earn attractive profits and a number of outsiders have the expertise and resources to hurdle whatever entry barriers exist
C. Entry barriers are relatively low and buyer demand for the product is growing fairly rapidly
D. Existing industry members are looking to expand their market reach by entering product segments or geographic areas where they currently do not have a presence
E. All of these conditions heighten the competitive pressures associated with fresh entry into the industry

E

Which one of the following does not intensify the competitive pressures associated with the threat of entry?
A. When incumbent firms are unable or unwilling to launch competitive initiatives to strongly contest the entry of newcomers
B. When industry members are struggling to earn good profits
C. When entry barriers are relatively low and buyer demand for the product is growing fairly rapidly

b

Which one of the following increases the competitive pressures associated with the threat of entry?
A. When incumbent firms are likely to launch competitive initiatives to strongly contest the entry of newcomers
B. When buyers have a high degree of loyalty to the brands and product offerings of existing industry members
C. When buyer demand for the product is growing fairly slowly
D. When few outsiders have the expertise and resources to hurdle whatever entry barriers exist
E. When newcomers can expect to earn attractive profits

E

The competitive threat that outsiders will enter a market is weaker when
A. Financially strong industry members send strong signals that they will launch strategic initiatives to combat the entry of newcomers
B. The industry is characterized by the lack of sizable scale economies and learning/experience curve effects
C. The industry's market growth is rapid

A

Competitive pressures stemming from the threat of entry are weaker when
A. There are fewer than 20 potential entry candidates and more than 10 firms already in the industry
B. There are more than 3 entry barriers
C. The industry outlook is risky or uncertain

C

Which of the following is generally not considered as a barrier to entry?
A. Rapid market growth
B. Sizable capital requirements and an array of regulatory requirements
C. Strong buyer loyalty to existing brands

A

The best test of whether potential entry is a strong or weak competitive force is
A. The strength of buyer loyalty to existing brands
B. Whether the industry's driving forces make it harder or easier for new entrants to be successful
C. Whether the strategies of industry members are well-matched to the industry's key success factors
D. Whether there are any vacant spaces on the industry's strategic group map
E. To ask if the industry's growth and profit prospects are strongly attractive to potential entry candidates

E

The competitive pressures from substitute products tend to be stronger when
A. Buyers are relatively comfortable with using substitutes and the costs to buyers of switching over to the substitutes are low
B. There are more than 10 sellers of substitute products
C. The quality and performance of the substitutes is well above what buyers need to meet their requirements

A

In which of the following instances are industry members not subject to stronger competitive pressures from substitute products?
A. The costs to buyers of switching over to the substitutes are low
B. Buyers are dubious about using substitutes
C. The quality and performance of the substitutes is well matched to what buyers need to meet their requirements

B

Industry rivals tend to experience weak competitive pressures from substitute products when
A. The available substitute products are weakly differentiated from one another
B. The buyers of the industry's products are few in number and they have substantial amounts of leverage with sellers
C. Rival sellers experience strong bargaining power from both suppliers and influential customers
D. Buyers incur high costs in switching to substitutes and substitutes are higher priced relative to the performance they deliver

D

Just how strong the competitive pressures are from substitute products depends on
A. Whether the available substitutes are strongly or weakly differentiated and whether buyers make purchases frequently or infrequently
B. Whether attractively priced substitutes are readily available and the ease with which buyers can switch to substitutes
C. Whether the available substitutes are products or services

B

Which of the following is not a good example of a substitute product that triggers stronger competitive pressures?
A. A salad as a substitute for French fries
B. Wireless phones as a substitute for wired telephones
C. Coca-Cola as a substitute for Pepsi

C

Whether supplier-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of
A. Whether the profits of suppliers are relatively high or low
B. The number of suppliers that each seller/industry member purchases from on average
C. How aggressively rival industry members are trying to differentiate their products
D. Whether suppliers can exercise sufficient bargaining power to influence the terms and conditions of supply in their favor and the extent of seller-supplier collaboration in the industry

D

The bargaining leverage of suppliers is greater when
A. There are no good substitutes for the items being furnished by the suppliers and the number of suppliers is relatively small
B. Industry members incur low costs in switching their purchases from one supplier to another
C. Industry members purchase in large quantities and thus are important customers of the suppliers

A

In which one of the following instances are the competitive pressures that industry members experience in their dealings with suppliers not weakened?
A. When industry members pose a credible threat of backward integration into the business of suppliers
B. When the cost of switching from one supplier to another is low
C. When the buying firms purchase in large quantities and thus are important customers of the suppliers
D. When the item being supplied is a commodity
E. When the items purchased from suppliers are in short supply

E

Supplier bargaining power is weaker when
A. Good substitute inputs exist or new ones emerge
B. The cost of switching from one supplier to another is high
C. Suppliers furnish a critical part or component

A

Which one of the following is not a factor that affects the strength of supplier bargaining power?
A. Whether needed inputs are in ample supply and are readily available from several different suppliers
B. Whether industry members are a strong threat to integrate backward into the business of suppliers and self-manufacture their own requirements
C. Whether industry members are struggling to make good profits because of slow-growing market demand

C

Which one of the following is not a factor in causing supplier bargaining power to be relatively strong?
A. The inputs needed from suppliers are in short supply
B. Suppliers are a strong threat to integrate forward into the business of industry members
C. The input being supplied is a commodity

C

The strength of competitive pressures that suppliers can exert on industry members is mainly a function of
A. Whether needed inputs are in short supply or whether ample supplies are readily available from several different suppliers
B. Whether suppliers self-manufacture what they supply or source their items from other manufacturers
C. The industry's position in the growth cycle

A

Which one of the following is not a reason why industry members are often motivated to enter into collaborative partnerships with key suppliers?
A. To reduce the costs of switching suppliers
B. To speed the availability of next-generation components
C. To enhance the quality of parts and components being supplied and reduce defect rates

A

In which of the following circumstances are competitive pressures associated with the bargaining power of buyers not relatively strong?
A. When buyer demand is growing rapidly
B. When buyers are relatively well informed about sellers' products, prices and costs
C. When buyers pose a major threat to integrate backward into the product market of sellers

A

Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on
A. Whether most buyers possess roughly equal or varying degrees of bargaining power and leverage
B. How many buyers are engaged in collaborative partnerships with sellers
C. Whether entry barriers are high or low and the size of the pool of likely entry candidates
D. Whether the overall quality of the items being furnished by industry members is rising or falling
E. Whether demand-supply conditions represent a buyer's market or a seller's market

E

Whether buyer-seller relationships in an industry represent a strong or weak source of competitive pressure is a function of
A. The speed with which general economic conditions and interest rates are changing
B. The extent to which buyers can exercise enough bargaining power to influence the terms and conditions of sale in their favor and whether the extent of collaboration between certain sellers and certain buyers in the industry places rivals lacking such collaborative arrangements at a competitive disadvantage

B

Collaborative relationships between particular sellers and buyers in an industry can represent a source of strong competitive pressure when
A. Virtually all buyers have strong brand attachments and are highly brand loyal
B. Demand for the product is growing rapidly
C. One or more rival sellers form mutually advantageous partnerships with important or prestigious buyers such that rivals lacking such partnerships are placed at a competitive disadvantage

C

Competitive pressures stemming from buyer bargaining power tend to be weaker when
A. The number of buyers is small, such that each customer's business tends to be particularly important to a seller
B. Buyer demand is growing slowly or maybe even declining
C. The costs incurred by buyers in switching to competing brands or to substitute products are relatively high

C

Which of the following conditions acts to weaken buyer bargaining power?
A. When buyers are unlikely to integrate backward into the business of sellers
B. When buyers purchase the item frequently and are well-informed about sellers' products, prices and costs

A

Which of the following is not a factor that causes buyer bargaining power to be stronger?
A. Some buyers are a threat to integrate backward into the business of sellers and become an important competitor
B. The industry is composed of a few large sellers and the customer group consists of numerous buyers that purchase in fairly small quantities

B

Buyers are in position to exert strong bargaining power in dealing with sellers when
A. Their costs to switch to competing brands or to substitute products are relatively high
B. A particular seller's product delivers quality or performance that is very important to the buyer and is not matched by other brands
C. They buy the product infrequently or in small quantities and are not particularly well-informed about sellers' products, prices and costs
D. Buyer demand is growing rapidly
E. The number of buyers is small or when a customer is particularly important to a seller

E

Which of the following factors is not a relevant consideration in judging whether buyer bargaining power is relatively strong or relatively weak?
A. Whether certain customers offer sellers important market exposure or prestige
B. Whether customers are relatively well informed about sellers' products, prices and costs
C. Whether buyer needs and expectations are changing rapidly or slowly

C

Which of the following factors does not affect whether buyer bargaining power and seller-buyer collaboration are an important source of competitive pressure in an industry?
A. Whether winning the business of certain customers offers a seller important market exposure or prestige
B. The extent and importance of collaborative partnerships and alliances between particular sellers and buyers
C. Whether buyers pose a major threat to integrate backward into the product market of sellers
D. Whether sellers' products are weakly differentiated, making it easy and inexpensive for buyers to switch to competing brands
E. Whether buyers have a strong preference for products of superior quality or just average quality

E

Which of the following factors is not a relevant consideration in determining the strength of buyer bargaining power?
A. Whether winning the business of prestigious customers gives a seller important market exposure and heightens its brand name
B. Whether the seller is a manufacturer or a wholesaler/distributor
C. Whether buyers pose a major threat to integrate backward into the product market of sellers

B

A competitive environment where there is weak to moderate rivalry among sellers, high entry barriers, weak competition from substitute products and little bargaining leverage on the part of both suppliers and customers
A. Lacks powerful driving forces
B. Gives each industry competitor the best potential for building sustainable competitive advantage over rival firms
C. Makes it hard for industry members to compete successfully unless they can strongly differentiate their products
D. Is conducive to industry members earning attractive profits

D

A competitive environment where there is strong rivalry among sellers, low entry barriers, strong competition from substitute products and considerable bargaining leverage on the part of both suppliers and customers
A. Is competitively unattractive from the standpoint of earning good profits
B. Offers little ability to build a sustainable competitive advantage
C. Is highly conducive to achieving strong product differentiation and high customer loyalty to the company's brand

A

As a rule, the stronger the collective impact of competitive pressures associated with the five competitive forces,
A. The stronger are the industry's driving forces
B. The lower the combined profitability of industry members
C. The fewer companies that can achieve a competitive advantage via anything other than being the industry's low-cost leader

B

The "driving forces" in an industry
A. Are usually triggered by changing technology or stronger learning/experience curve effects
B. Usually are spawned by growing demand for the product, the outbreak of price-cutting and big reductions in entry barriers
C. Are major underlying causes of changing industry and competitive conditions and have the biggest influences in reshaping the industry landscape and altering competitive conditions

C

Industry conditions change
A. Because of such powerful driving forces as swings in buyer demand, changing interest rates, ups and downs in the economy and higher/lower entry barriers
B. Because of newly-emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups
C. Because new industry key success factors emerge
D. Because important forces create pressures or incentives for industry participants (competitors, customers, suppliers) to alter their actions

D

The task of driving forces analysis is to
A. Develop a comprehensive list of all the potential causes of changing industry conditions
B. Predict which new driving forces will emerge next
C. Determine which of the five competitive forces is the biggest driver of industry change
D. Identify the driving forces, assess whether their impact will make the industry more or less attractive and determine what strategy changes are needed to prepare for the impacts of the driving forces

D

) Which of the following is not generally a "driving force" capable of producing fundamental changes in industry and competitive conditions?
A. Changes in the long-term industry growth rate
B. Increasing globalization of the industry
C. Product innovation and technological change
D. Ups and downs in the economy and in interest rates

D

Which of the following are most unlikely to qualify as driving forces?
A. Changes in the long-term industry growth rate, the entry or exit of major firms and changes in cost and efficiency
B. Increasing globalization of the industry and product innovation
C. New Internet technology applications, new government regulations and significant changes in government policy toward the industry
D. Mounting competition from substitutes and increasing efforts to collaborate with suppliers via strategic alliances

D

Increasing globalization of the industry can be a driving force because
A. The products of foreign competitors are nearly always cheaper or of better quality than those of domestic companies
B. Foreign producers typically have lower costs, greater technological expertise and more product innovation capabilities than domestic firms
C. It tends to increase rivalry among industry members and often shifts the pattern of competition among an industry's major players, favoring some and disadvantaging others

C

) Driving forces analysis
A. Involves identifying the driving forces, assessing whether their impact will make the industry more or less attractive and determining what strategy changes a company may need to make to prepare for the impacts of the driving forces
B. Identifies which strategic group is the most powerful

B

Driving forces analysis helps managers identify whether
A. The combined impacts of the driving forces will act to increase/decrease market demand, increase/decrease competition and raise/lower industry profitability in the years ahead
B. It will become more or less important to aim the company's strategy at being the industry's low-cost producer

A

An industry's driving forces
A. Are generally determined by competitive pressures, the sizes of strategic groups and the power of rival firms' competitive strategies
B. Generally act in ways which will strengthen or weaken market demand, competition and industry profitability in future years
C. Frequently cause a leveling off of industry growth and a reduction in the bargaining power of buyers

B

Which of the following do not qualify as potential driving forces capable of inducing fundamental changes in industry and competitive conditions?
A. Changes in who buys the product and how they use it, changes in the long-term industry growth rate and changes in cost and efficiency
B. Entry or exit of major firms, product innovation and marketing innovation
C. Increases in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration and growing buyer-seller collaboration

C

In analyzing driving forces, the strategist's role is to
A. Identify the driving forces and evaluate their impact on (1) demand for the industry's product, (2) the intensity of competition and (3) industry profitability
B. Predict future marketing innovations and how fast the industry is likely to globalize
C. Evaluate what stage of the life cycle the industry is in and when it is likely to move to the next stage

A

Which one of the following is not an integral part of driving forces analysis?
A. Identifying the specific factors causing fundamental changes in industry conditions and/or the industry's competitive structure
B. Determining whether the driving forces are acting to cause one or more industry rivals to shift to a different strategic group
C. Determining whether the driving forces are acting to strengthen or weaken market demand

B

Which of the following is most likely to qualify as a driving force?
A. Increases in price-cutting by rival sellers and the launch of major new advertising campaigns by one or more rivals
B. Wildly successful introduction of innovative new products by one or more industry rivals that force other rivals to respond quickly or lose a major share of their customers to the innovating rival(s)
C. An increase in the prices of substitute products

B

Which one of the following is not a common type of driving force?
A. Reductions in uncertainty and business risk
B. Changing societal concerns, attitudes and lifestyles
C. Diffusion of technical know-how across more companies and more countries
D. Increasing efforts on the part of industry members to collaborate closely with their suppliers

D

A strategic group
A. Consists of those industry members that are growing at about the same rate and have similar product line breadth
B. Includes all rival firms having comparable profitability
C. Is a cluster of industry rivals that have similar competitive approaches and market positions

C

A strategic group consists of those firms in an industry that
A. Are subject to the same driving forces
B. Are placing about the same emphasis on each distribution channel
C. Use the same key success factors to differentiate their products
D. Employ similar competitive approaches and occupy similar positions in the market

D

The concept of strategic groups is relevant to industry and competitive analysis because
A. Firms in the same strategic groups are rarely close competitors—a firm's closest competitors are usually in distant strategic groups
B. Strategic group maps help identify each company's market position and its closest competitors
C. Competition grows in intensity as the number and diversity of the strategic groups in an industry increases

B

In mapping strategic groups
A. One strategic variable and one financial variable should be used as axes for the map
B. It is important for the variables used as axes to be highly correlated
C. The best variables to use as axes for the map are those that differentiate how rivals have positioned themselves in the marketplace

C

Which of the following is not an appropriate guideline for developing a strategic group map for a given industry?
A. The variables chosen as axes for the map should indicate big differences in how rivals have positioned themselves to compete in the marketplace
B. The variables chosen as axes for the map can be either quantitative or qualitative
C. The variables chosen as axes for the map should be highly correlated

C

Strategic group mapping is a technique for displaying
A. How many rivals are pursuing each type of strategy
B. Which companies have the biggest market share and who the industry leader really is
C. The different market or competitive positions that rival firms occupy in an industry and identifying each rival's closest competitors

C

Which one of the following pairs of variables is least likely to be useful in drawing a strategic group map?
A. Geographic coverage and degree of vertical integration
B. Brand name reputation and distribution channel emphasis
C. Product quality and product line breadth
D. Level of profitability and size of market share

D

One of the things that can be gleaned from a strategic group map of industry rivals is
A. Which rivals have been in business longer and thus have greater access to experience curve effects
B. Which rivals have newer manufacturing facilities
C. Which strategic groups have the highest profit margins and the highest customer switching costs
D. Whether profit prospects vary from strategic group to strategic group due to strengths and weaknesses in their respective market positions on the map (perhaps because industry driving forces and competitive pressures are acting to favor some strategic groups and to disadvantage other groups)

D

The payoff of good scouting reports on rivals is improved ability to
A. Anticipate what moves rivals are likely to make next, thereby providing a valuable assist in outmaneuvering them in the marketplace
B. Determine which rivals are in the best strategic group
C. Figure out how many key success factors a rival has

A

Having good competitive intelligence about rivals' strategies, latest actions and announcements, resource strengths and weaknesses and moves to improve their situation is important because
A. It identifies who the industry's current market share leaders are
B. It helps a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence about what market maneuvers to expect from its rivals

B

Good competitive intelligence about the strategies and competitive strengths and weaknesses of rival companies helps management determine
A. Which competitor has the best strategy and which competitors have flawed or weak strategies
B. Which rivals are poised to gain market share and which seem destined to lose market share
C. Which rivals are likely to rank among the industry leaders on the road ahead
D. Which rivals are likely to initiate what kinds of fresh strategic moves and why
E. All of these

E

In seeking to predict the next moves of close or key rivals, it is useful to consider such questions as:
A. Which rivals badly need to increase their unit sales and market share and what new offensive initiatives are they likely to employ?
B. Which rivals are poised to gain market share and which seem destined to lose market share?
C. Which rivals are good candidates to be acquired?
D. Which rivals are likely to enter new geographic markets or expand their product offerings (so as to enter new market segments where they currently do not have a presence)?
E. All of these

E

In identifying an industry's key success factors, strategists should
A. Try to single out all factors which play a major role in shaping whether buyer demand grows rapidly or slowly
B. Consider on what basis customers choose between competing brands, what resources and competitive capabilities firms need to be competitively successful and what shortcomings are almost certain to put a company at a significant competitive disadvantage

B

An industry's key success factors
A. Are a function of market share, entry barriers, economies of scale, degree of vertical integration and industry profitability
B. Vary according to whether an industry has high or low long-term attractiveness
C. Can be determined from an analysis of an industry's dominant economic characteristics, what competition is like, the impacts of the driving forces, the comparative market positions of industry members and the likely next moves of industry rivals

C

Which of the following is not a good example of a marketing-related key success factor?
A. Product R & D capabilities and expertise in product design
B. A well-known and well-respected brand name
C. Breadth of product line and product selection

A

Which of the following is a good example of a manufacturing-related key success factor?
A. Global distribution capabilities
B. High labor productivity (especially if the production process has high labor content)
C. Low distribution costs

B

Evaluating whether an industry's environment presents a company with a sufficiently attractive business opportunity involves
A. Sizing up overall industry and competitive conditions to determine whether the industry's overall profit prospects are above average, average or below average
B. Determining which firms in the industry have a competitive advantage and how they got their advantage
C. Determining the overall strength of the five competitive forces

A

Which of the following is particularly pertinent in evaluating whether an industry presents a sufficiently attractive business opportunity?
A. The industry's growth potential, whether competition appears destined to become stronger or weaker and whether the industry's overall profit prospects are above average, average or below average
B. An assessment of which firms in the industry have the best and worst competitive strategies, whether the number of strategic groups in the industry is increasing or decreasing and whether economies of scale and experience curve effects are a key success factor

A

Evaluating whether an industry presents a sufficiently attractive business opportunity usually does not involve a consideration of which of the following factors?
A. The industry's growth potential, whether competitive pressures will likely grow stronger or weaker and whether the industry's future profit prospects are above average, average or below average
B. An assessment of the degrees of business risk and uncertainty in the industry's future
C. Whether the industry's future profitability will be favorably or unfavorably affected by the prevailing driving forces
D. The severity of the problems confronting the industry as a whole
E. Whether the industry's product is strongly or weakly differentiated

E

Which of the following is not one of the five questions that comprise the task of evaluating a company's resources and competitive position?
A. What are the company's most profitable geographic market segments?
B. How well is the company's present strategy working?

a

Which of the following is not a component of evaluating a company's resources and competitive position?
A. Evaluating how well the present strategy is working
B. Scanning the environment to determine a company's best and most profitable customers

b

The spotlight in analyzing a company's resources, internal circumstances and competitiveness includes such questions/concerns as
A. Whether the company's present strategy is better than the strategies of its closest rivals based on such performance measures as earnings per share, ROE, dividend payout ratio and average annual increase in the common stock price
B. Whether the company's key success factors are more dominant than the key success factors of close rivals
C. Whether the company has the industry's most efficient and effective value chain
D. What are the company's resource strengths and weaknesses and its external opportunities and threats

d

Which of the following is not pertinent in identifying a company's present strategy?
A. The key functional strategies (R&D, supply chain management, production, sales and marketing, HR and finance) a company is employing
B. Management's planned, proactive moves to outcompete rivals (via better product design, added features, improved quality or service, wider product lines and so on)
C. The company's mission, strategic objectives and financial objectives

c

One important indicator of how well a company's present strategy is working is whether
A. It has more core competencies than close rivals
B. Its strategy is built around at least two of the industry's key success factors
C. The company is achieving its financial and strategic objectives and whether it is an above-average industry performer

c

The best quantitative evidence of whether a company's present strategy is working well is
A. Whether the company has more competitive assets than it does competitive liabilities
B. Whether the company is in the industry's best strategic group
C. The caliber of results the strategy is producing, specifically whether the company is achieving its financial and strategic objectives and whether it is an above-average industry performer

c

Which one of the following is not a reliable measure of how well a company's current strategy is working?
A. Whether the company's sales are growing faster, slower or about the same pace as the industry as a whole, thus resulting in a rising, falling or stable market share
B. Whether it has a larger number of competitive assets than competitive liabilities and whether it has a superior quality product

b

SWOT analysis is a powerful tool for
A. Gauging whether a company has a cost competitive value chain
B. Sizing up a company's resource capabilities and deficiencies, its market opportunities and the external threats to its future well-being

b

SWOT analysis
A. Is a way to measure whether a company's value chain is longer or shorter than the chains of key rivals
B. Is a tool for benchmarking whether a firm's strategy is closely matched to industry key success factors
C. Reveals whether a company is competitively stronger than its closest rivals
D. Provides a good overview of whether a company's situation is fundamentally healthy or unhealthy

d

he payoff of doing a thorough SWOT analysis is
A. Identifying whether the company's value chain is cost effective vis-à-vis the value chains of rivals
B. Helping strategy-makers benchmark the company's resource strengths against industry key success factors
C. Enabling a company to assess its overall competitive position relative to its key rivals
D. Revealing whether a company's market share, measures of profitability and sales compare favorably or unfavorably vis-à-vis key competitors
E. Assisting strategy-makers in crafting a strategy that is well-matched to the company's resources and capabilities, its market opportunities and the external threats to its future well-being

e

Which one of the following is not part of conducting a SWOT analysis?
A. Identifying a company's resource strengths and competitive capabilities
B. Benchmarking the company's resource strengths and competitive capabilities against industry key success factors
C. Identifying a company's market opportunities

b

The two most important parts of SWOT analysis are
A. Pinpointing the company's competitive assets and pinpointing its competitive liabilities
B. Identifying the company's resource strengths and identifying the company's best market opportunities
C. Identifying the external threats to a company's future profitability and pinpointing how many market opportunities it has
D. Drawing conclusions from the SWOT listings about the company's overall situation and translating these conclusions into strategic actions to better match the company's strategy to its resource strengths and market opportunities, correct the important weaknesses and defend against external threats

d

The three steps of SWOT analysis are
A. Identifying the company's resource strengths and weaknesses and its opportunities and threats, drawing conclusions about the company's overall situation and translating the conclusions into strategic action to improve the company's strategy
B. Pinpointing the company's competitive assets, pinpointing its competitive deficiencies and determining whether it enjoys a competitive advantage

a

A company resource strength can concern
A. A skill, specialized expertise or competitively important capability
B. Valuable human assets and intellectual capital
C. An achievement or attribute that puts the company in a position of market advantage
D. Competitively valuable alliances or cooperative ventures
E. All of these

e

Which of the following most accurately reflect a company's resource strengths?
A. Its human, physical and/or organization assets; its skills and competitive capabilities; achievements or attributes that enhance the company's ability to compete effectively; and whether it is engaged in competitively valuable alliances or cooperative ventures
B. The sizes of its unit sales, revenues and market share vis-à-vis those of key rivals

a

A company's resource strengths are important because
A. They pave the way for establishing a low-cost advantage over rivals
B. They represent its competitive assets and are big determinants of its competitiveness and ability to succeed in the marketplace
C. They provide extra muscle in helping lengthen the company's value chain

b

A company's resource strengths
A. Represent its core competencies
B. Are the most important parts of the company's value chain
C. Signal whether it has the wherewithal to be a strong competitor in the marketplace or whether its capabilities and competitive strengths are modest, thus relegating it to a trailing position in the industry

c

The best example of a company strength is
A. Having higher earnings per share and a higher return on shareholders' equity investment than key rivals
B. Being totally self-sufficient such that the company does not have to rely in any way on key suppliers, partnerships with outsiders or strategic alliances
C. Having proven technological expertise and ability to churn out new and improved products on a regular basis

c

Which of the following is not a good example of a company strength?
A. More intellectual capital and better e-commerce capabilities than rivals
B. Fruitful partnerships or alliances with suppliers that reduce costs and/or enhance product quality and performance
C. Having higher earnings per share and a higher stock price than key rivals

c

When a company has real proficiency in performing a competitively important value chain activity, it is said to have
A. A distinctive competence
B. A core competence
C. A key value chain proficiency

b

When a company is good at performing a particular internal activity, it is said to have
A. A competitive advantage over rivals
B. A competitive capability
C. A distinctive competence
D. A core competence
E. A company competence

e

The difference between a company competence and a core competence is that
A. A company competence refers to a company's best-executed functional strategy and a core competence refers to a company's best-executed business strategy
B. A company competence refers to a company's strongest resource whereas a core competence refers to a company's lowest-cost and most efficiently performed value chain activity
C. A company competence is a competitively relevant activity which a firm performs especially well relative to other internal activities, whereas a core competence is an activity that a company has learned to perform proficiently
D. A company competence represents real proficiency in performing an internal activity whereas a core competence is a competitively relevant activity which a firm performs better than other internal activities

d

The difference between a core competence and a distinctive competence is that
A. A distinctive competence refers to a company's strongest resource or competitive capability and a core competence refers to a company's lowest-cost and most efficiently executed value-chain activity
B. A core competence usually resides in a company's base of intellectual capital whereas a distinctive competence stems from the superiority of a company's physical and tangible assets
C. A core competence is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs, whereas a distinctive competence is a competitively relevant activity which a firm performs especially well in comparison to other firms with which it competes

c

A core competence
A. Adds to a company's arsenal of competitive capabilities and competitive assets and is a genuine resource strength
B. Is typically knowledge-based, residing in a company's intellectual capital and not in its tangible physical assets on the balance sheet
C. Is often grounded in cross-department combinations of knowledge and expertise
D. Is a competitively relevant activity which a firm performs especially well in comparison to the other activities it performs
E. All of the above

e

A core competence
A. Gives a company competitive capability and is a genuine company strength and resource
B. Typically has competitive value, the amount of which is reflected in the physical and tangible assets on a company's balance sheet
C. Usually is grounded in the technological expertise of a particular department or work group

a

When a company performs a particular competitively important activity truly well in comparison to its competitors, it is said to have
A. A company competence
B. A strategic resource
C. A distinctive competence

c

Which of the following does not represent a potential core competence?
A. Skills in manufacturing a high-quality product at a low cost
B. Know-how in creating and operating systems for cost-efficient supply chain management
C. The capability to fill customer orders accurately and swiftly
D. Having a wider product line than rivals

d

A distinctive competence
A. Is a competitively important activity that a company performs better than its competitors
B. Gives a company competitively valuable capability that is unmatched by rivals
C. Is a basis for sustainable competitive advantage
D. Can underpin and add real punch to a company's strategy
E. All of the above

e

Which one of the following is inaccurate as concerns a distinctive competence?
A. A distinctive competence is a competitively important activity that a company performs better than its competitors
B. A distinctive competence is typically less difficult for rivals to copy than a core competence
C. A distinctive competence can be a basis for sustainable competitive advantage

b

The competitive power of a company's core competence or distinctive competence depends on
A. Whether it helps differentiate a company's product offering from the product offerings of rival firms
B. How hard it is to copy and how easily it can be trumped by the different resource strengths and competitive capabilities of rivals
C. Whether customers are aware of the competence and view the competence positively enough to boost the company's brand name reputation

b

The competitive power of a company resource strength or competitive capability hinges on
A. How hard it is for competitors to copy
B. Whether it is durable and has staying power (in the sense of not losing its value quickly because of new developments)
C. Whether it is really competitively superior to the essentially equivalent type of resource/capability of rivals
D. How easily it can be trumped by the different resources/capabilities of rivals
E. All of these

e

For a particular company resource/capability to have real competitive power and perhaps qualify as a basis for competitive advantage, it should
A. Be hard for competitors to copy, be durable and long-lasting and not be easily trumped by the different resources/capabilities of rivals
B. Be something that a company does internally rather than in collaborative arrangements with outsiders
C. Be patentable

a

The competitive power of a company resource strength is not measured by which one of the following tests?
A. Is the resource strength durable—does it have staying power?
B. Is the resource strength something that a company does internally rather than in collaborative arrangements with outsiders?
C. Is the resource strength easily trumped by the different resources/capabilities of rivals?

b

If a company doesn't possess a distinctive competence,
A. All potential for competitive advantage is lost
B. It is unlikely to survive in the marketplace and should exit the industry
C. It can still marshal competitive power in the marketplace via a collection of adequate-to-good resource strengths

c

A company resource weakness or competitive deficiency
A. Represents a problem that needs to be turned into a strength because weaknesses prevent a firm from being a winner in the marketplace
B. Causes the company to fall into a lower strategic group than it otherwise could compete in
C. Prevents a company from having a distinctive competence
D. Usually stems from having a missing link or links in the industry value chain
E. Is something a company lacks or does poorly (in comparison to rivals) or a condition that puts it at a disadvantage in the marketplace

e

A company's resource weaknesses can relate to
A. Inferior or unproven skills, expertise or intellectual capital in competitively important parts of the business
B. Something that it lacks or does poorly (in comparison to rivals)
C. Deficiencies in competitively important physical, organizational or intangible assets
D. Missing or competitively inferior capabilities in key areas
E. All of these

e

In doing SWOT analysis, which one of the following is not an example of a potential resource weakness or competitive deficiency that a company may have?
A. Less productive R & D efforts than rivals
B. Having a single, unified functional strategy instead of several distinct functional strategies
C. Lack of a strong brand image and reputation (as compared to rivals)

b

Sizing up a company's overall resource strengths and weaknesses
A. Essentially involves constructing a "strategic balance sheet" where the company's resource strengths represent competitive assets and its resource weaknesses represent competitive liabilities
B. Is called benchmarking
C. Is called competitive strength assessment

a

The external market opportunities which are most relevant to a company are the ones that
A. Increase market share
B. Reinforce its overall business strategy
C. Match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability and present the most potential for competitive advantage

c

The market opportunities most relevant to a particular company are those that
A. Offer the best growth and profitability
B. Provide a strong defense against threats to the company's profitability
C. Hold the most potential for product innovation

c

In doing SWOT analysis and trying to identify a company's market opportunities, which of the following is not an example of a potential market opportunity that a company may have?
A. Serving additional customer groups or market segments
B. Growing buyer preferences for substitutes for the industry's product
C. Acquiring rival firms or companies with attractive technological expertise or capabilities

b

Which of the following best describes the market opportunities that tend to be most relevant to a particular company?
A. Those market opportunities that provide avenues for taking market share away from close rivals and enhance a company's image as a leader in product innovation and product quality
B. Those market opportunities that offer the company a chance to raise entry barriers
C. Those market opportunities that help promote greater diversification of revenues and profits
D. Those market opportunities that match up well with the firm's financial resources and competitive capabilities, offer the best growth and profitability and present the most potential for competitive advantage

d

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