Ch. 8
1. A differentiation strategy can improve a company relative to the five-forces by reducing the threat of new entrants and
reducing rivalry from competitors.
2. Businesses that compete in markets that are in decline should simply be harvested or divested since they are no
longer profitable.
3. A firm using a differentiation strategy should not be concerned with costs because it can charge a premium price for
its products.
4. Concentrating solely on one form of competitive advantage generally leads to the highest level of profitability.
5. Speed-based competitive advantage can be created around all of the following activities EXCEPT:
A) customer responsiveness.
B) product development cycles.
C) information sharing and technology.
D) brand loyalty.
E) delivery or distribution.
6. A fragmented industry is one in which:
A) Foreign firms have almost equal market shares on domestic firms
B) No one firm strongly influences the industry's outcomes
C) No single firm has a significant market share
D) Competitors have been beaten down by regulations
7. Of the following, which is are major disadvantages of a first mover strategy?
1. The high degree of uncertainty about new markets.
2. The high level of competition in new markets.
3. The high cost of developing new products.
4. The inability to sustain a competitive advantage.
5. The low profits as new markets develop.
A) 1 only
B) 1 and 2
C) 2 and 5
D) 1 and 3
E) 1, 2, 3, 4, and 5
8. The term "stuck-the-middle" means: _____.
A) a middle of the road strategy.
B) customers are willing to pay only a mid-range price for products.
C) customers have only moderate expectations regarding product quality.
D) the firm uses an best value strategy but fails to establish any distinction.
E) the firm is not committing to any strategy because market conditions are too uncertain.
9. A company with a focus strategy ______
A) pursues both a cost leadership and differentiation strategy simultaneously
B) cannot compete on costs.
C) serve the specialized needs of a specific market segment.
D) utilizes few value chain activities to achieve competitive advantage.
E) All of these apply.
10. A firm using a low cost leader strategy should focus on reducing costs in which value chain activities?
A) Inbound Logistics
B) Marketing and sales
C) Human Resource Management
D) Procurement
E) All of the above.
Chapter 12.
1. Leaders create vision and are seldom involved in practical activities like organizational design.
2. Social capital is found in the knowledge, skills, and abilities of individual employees.
3. Firm's such as E-Bay, Oracle, and Microsoft will tend to have a higher ratio of market value to book value than
“industrial companies” such as General Motors and Nucor Steel.
4. Tacit knowledge can only be shared and used with the consent of the individual with the knowledge.
5. Inertia in an organization means the organization is _____
A) an empowering organization.
B) an adaptive organization.
C) a big organization.
D) resistant to change.
E) lacking leadership.
6. Organizational sources of power are derived from:
A) The manager's tenure at the firm
B) The manager's role in the organization
C) The manager's style of working individually
D) The manager's functional tactics
E) All of the above
7. When firms invest in developing individual employee's abilities and skills, they are developing ____ within the firm.
A) physical capital
B) human capital
C) trust
D) social capital
E) intellectual capital
8. All of the following are components of emotional intelligence (EI) except _____.
A) Self-awareness
B) Self-management
C) Self-promotion
D) Social skills
E) All of the above are components of emotional intelligence.
9. ______ is the ability to influence other people’s behavior, to persuade them to do things they would not have
otherwise done, and to overcome resistance to change.
A) Inertia
B) Power
C) Leadership
D) Custodial management
E) Competitive advantage
10. Leaders are primarily concerned with _______
A) doing things right.
B) maintaining the status quo.
C) doing the right things.
D) problem solving.
E) meeting short-term goals.
Ch 13
1. Implementation control is designed to assess whether the overall strategy should be changed in light of the results
associated with the incremental actions that implement the overall strategy.
2. The market value of a firm is equal to its total revenue generated by providing goods and services to the market.
3. Continuous monitoring of the business environment slows down adaptation and restricts an organization's ability to
respond quickly to changes in the environment.
4. For firms competing in highly unstable and turbulent industries, “traditional” strategic controls are most appropriate
because the emphasize stability in the organization.
5. Which of the following is NOT one of the basic types of strategic control?
A. Premise control
B. Performance control
C. Special alert control
D. Implementation control
E) None of the above; these are all basic types of strategic control.
6. The ______ typically uses measures like cash flow, return on equity, sales and income growth as part of the balanced
scorecard approach.
A) customer perspective
B) business process perspective
C) learning and growth perspective
D) financial perspective
7. Strategic controls attempt to maintain alignment between _____.
A) customers, strategy, and products/services.
B) strategy, structure, and the environment.
C) “doing things right” and “doing the right things”.
D) profits, value, and costs.
E) business level strategy, corporate level strategy, and international strategy.
8. Which of the following is true in contemporary control systems?
A) They compare returns to goals.
B) They scan and monitor the environment.
C) They utilize information control.
D) Then utilize behavioral control.
E) All of the above are true.
9. Informational control systems ask _____
A) is the organization “doing things right”?
B) is the organization “doing the right things”?
C) whether rules and regulations are being followed as information is processed?
D) is the organization's environment a necessary and sufficient condition for success?
E) are goals and objectives being met?
10. ______ is designed to check systematically and continuously whether the premises on which the strategy is based
are still valid.
A) Strategic surveillance
B) Implementation control
C) Special alert control
D) Premise control