The payoff of doing a thorough swot analysis is

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1. A creative, distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage:

A. is a reliable indicator that the company has a profitable business model. B. is every company's strategic vision. C. is a company's most reliable ticket to above-average profitability—indeed, the tight connection between competitive advantage and profitability means that the quest for sustainable competitive advantage always ranks center stage in crafting a strategy. D. signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives. E. is the best indicator that the company's strategy and business model are well-matched and properly synchronized.

2. Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

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, technological superiority, or unusually good value for the money C. Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins D. Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of satisfying the needs and tastes of buyers comprising the niche E. Developing expertise and resource strengths that give the company competitive capabilities that rivals can't easily imitate or trump with capabilities of their own.

3. The strategy-making, strategy-executing process:

A.is usually delegated to members of a company's board of directors so as not to infringe on the time of busy executives. B. includes establishing a company's mission, developing a business model aimed at making the company an industry leader, and crafting a strategy to implement and execute the business model. C. embraces the tasks of developing a strategic vision, setting objectives, crafting a strategy, implementing and executing the strategy, and then monitoring developments and initiating corrective adjustments in light of experience, changing conditions, and new opportunities. D. is principally concerned with sizing up an organization's internal and external situation, so as to be prepared for the challenge of developing a sound business model. E. is primarily the responsibility of top executives and the board of directors; very few managers below this level are involved.

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4. Business strategy, as distinct from corporate strategy, is chiefly concerned with:

A. Deciding what new businesses to enter, which existing businesses to get off, 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.

5. 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. E. is weaker when more firms have weakly differentiated products, buyer demand is growing slowly, and buyers have moderate switching costs.

6. 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. D. buyers have high psychic costs in severing existing brand relationships and establishing new ones. E. demand for the industry's product is not very price sensitive.

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7. The 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.

8. Which one of the following provides the most accurate picture of whether a company is

cost competitive with its rivals?

A. How the costs of the company's internally performed activities (its own value chain)

compare against the costs of the internally-performed activities of rival companies

B. Costs in the value chains of the company's suppliers

C. Costs in the value chains of a company's distributors and retail dealers and forward channel

allies

D. The costs of a company's internally performed activities, costs in the value chains of both the

company's suppliers and forward channel allies, and how all these costs compare against the

costs that make up the value chain systems employed by rival firms

E. Whether the company has a longer or shorter value chain than its close rivals

9. To succeed with a low-cost provider strategy, company managers have to

A. pursue backward or forward integration to detour suppliers or buyers with considerable

bargaining power and leverage.

B. move the performance of most all value chain activities to low-wage countries.

C. sell direct to users of their product or service and eliminate use of wholesale and retail

intermediaries.

D. do two things: (1) perform value chain activities more cost-effectively than rivals and (2) be

proactive in revamping the firm's overall value chain to eliminate or bypass "nonessential" cost-

producing activities.

E. outsource the biggest majority of value chain activities.

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10. A strategy to be the industry's overall low-cost provider tends to be more appealing than a

differentiation or best-cost or focus/market niche strategy when

A. there are many ways to achieve product differentiation that buyers find appealing.

B. buyers use the product in a variety of different ways and have high switching costs in

changing from one seller's product to another.

C. the offerings of rival firms are essentially identical, standardized, commodity-like products.

D. entry barriers are high and competition from substitutes is relatively weak.

E. the market is composed of many distinct segments with varying buyer needs and

expectations.

11. Which of the following statements regarding global competition is false?

A. In global competition, rivals vie for worldwide market leadership.

B. In globally competitive industries, the power and strength of a company's strategy and

resource capabilities in one country significantly enhance its competitiveness in other country

markets.

C. In global competition, a firm's overall competitive advantage (or disadvantage) grows out of

its entire worldwide operations.

D. In global competition, there's more cross-country variation in industry conditions and

competitive forces than there is in industries where multidomestic competition prevails.

E. In global competition, many of the same rival companies compete against each other in many

different countries, but especially so in countries where sales volumes are large and where

having a competitive presence is strategically important to building a strong global position in

the industry.

12. The advantages of using a franchising strategy to pursue opportunities in foreign markets

include

A. having franchisees bear most of the costs and risks of establishing foreign locations and

requiring the franchiser to expend only the resources to recruit, train, and support foreign

franchisees.

B. being particularly well suited to the global expansion efforts of companies with

multidomestic strategies.

C. allowing a company to achieve scale economies.

D. being well suited to companies who employ cross-border transfer strategies.

E. being well suited to the global expansion efforts of manufacturers.

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13. A company pursuing a related diversification strategy would likely address the issue of

what additional industries/businesses to diversify into by

A. locating businesses with well-known brand names and large market shares.

B. identifying industries with the least competitive intensity.

C. identifying an attractive industry whose value chain has good strategic fit with one or more

of the firm's present businesses.

D. identifying businesses with the potential to diversify the number and types of different

activities in the firm's value chain make-up.

E. locating new businesses with high degrees of financial fit with its present businesses.

14. A diversified company has a parenting advantage when

A. it is more able than other companies to boost the combined performance of its individual

businesses through high-level guidance, general oversight, and other corporate-level

contributions.

B. it is more able than other companies to create an extensive collaborative effort among

different specialties among different geographic locations.

C. it results in supporting short-term economic shareholder value.

D. managing a set of fundamentally similar businesses operations in fundamentally similar

industries and inert environments.

E. All of these.

15. The capability-building process

A. is first and foremost an activity in empowering employees, putting them on a single team (or

in a single department), and giving them the tools and training to perform the desired activity

with a high degree of proficiency.

B. is a one-step process built around properly training and empowering employees to perform

their assigned activities in a tightly-prescribed manner.

C. can be a shortcut by weeding out underperforming employees and replacing them with

people having stronger skills sets and know-how.

D. is best done by forming a new department charged with developing the desired competence

or capability.

E. requires first developing the ability to do something, however imperfectly or inefficiently;

second, translating this ability into a competence and/or capability by learning to do the

activity consistently well and at an acceptable cost; and then continuing to polish and refine its

know-how in an effort further improve its performance, ideally striving to match or beat rivals

in performing the activity.

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16. The rationale for making strategy-critical value chain activities the primary building

blocks in a company's organizational scheme is based on

A. the much shorter time it takes to build core competencies and competitive capabilities.

B. the benefit such an organizational scheme has in reducing costs.

C. the benefit such an organizational scheme has in improving the productivity of

geographically-scattered organizational units.

D. the thesis that if activities crucial to strategic success are to have the resources, decision-

making influence, and organizational impact they need, they have to be centerpieces in the

organizational scheme.

E. the benefit such an organizational scheme has in making the empowerment of employees

more effective.

17. A company's ability to marshal adequate resources in support of new strategic initiatives

and steer them to the appropriate organizational units is important to the strategy execution

process because

A. changes in strategy often require resource reallocation and organizational units need the

proper funding to carry out their part of the strategic plan effectively and efficiently.

B. accurate budgets are the key to exercising tight financial controls over what organization

units can and cannot do in carrying out management's directives to execute the chosen strategy

proficiently.

C. tight budget control is management's most powerful tool for first-rate strategy execution.

D. lean, carefully managed budgets protect the company's financial condition and eliminate

wasteful use of cash.

E. lean, strictly enforced budgets are management's best and most used means of getting

organizational units to exercise the fiscal discipline needed to execute the chosen strategy in a

cost-efficient manner.

18. The idea behind benchmarking and best practices is to

A. identify which companies are the best performers of a strategically-relevant activity and then

exactly copy their methods.

B. search the world for a company that performs a strategically relevant task or value chain

activity at the lowest possible cost and then use business process reengineering techniques to

try to meet or beat the costs of the world's low-cost performer of that activity.

C. perform each activity in the industry value chain according to standard industry practice and

then regularly benchmark the company's performance to see if it is actually achieving the

industry standard.

D. identify companies that are the best performers of an activity and then modify and adapt

their practices to fit the company's own specific circumstances and operating requirements.

E. determine whether a company has a "world-class" value chain.

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19. The two culture-building roles of a company's stated values and ethical standards are to

A. communicate the company's good intentions and establish a corporate conscience.

B. confirm the integrity of company personnel and signal the above-board nature of the

company's business principles and operating methods.

C. steer company personnel toward doing the right thing and convince outsiders that the

company is socially responsible.

D. help create a work climate where company personnel share common and strongly held

convictions about how the company's business is to be conducted and to signal employees that

they are to display the company's core values in their actions and uphold the company's ethical

standards.

E. provide a basis for designing culture-supportive incentive compensation plans.

20. Which one of the following statements about a weak company culture is true?

A. In a weak culture company, there is virtually no employee support for the company's

strategic vision and strategy.

B. Weak culture companies do not usually have a code of ethics and have little regard for high

ethical standards.

C. Weak cultures provide little assistance in executing strategy because there are no traditions,

values, or behavioral norms that management can use as levers to mobilize commitment to

executing the chosen strategy.

D. Weak culture companies are fairly receptive to change and to people who champion new

ways of doing things.

E. In a weak culture company, there is usually little teamwork, a dearth of intellectual capital,

and inattention to building core competencies.

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