Q&A Hero

Q: The concept of strategic groups is relevant to industry and competitive analysis because A) firms in the same strategic groups are rarely close competitorsa firm's closest competitors are usually in distant strategic groups. B) strategic group maps help identify how each competing firm is positioned and the relationship to its closest competitors. C) competition grows in intensity as the number and diversity of the strategic groups in an industry increases. D) the profit potential of firms in the same strategic group is usually very similar. E) competitive pressures tend to be weaker within strategic groups than across strategic groups.

Q: Which of the following pairs of variables are least likely to be useful in drawing a strategic group map? A) geographic market scope 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 E) price/perceived quality and image range and the extent of buyer appeal

Q: Having good competitive intelligence about rivals' strategies and moves to improve their situation is important because A) it identifies who the industry's current market share leaders are. B) it allows a company to anticipate what moves rivals are likely to make next and to craft its own strategic moves with some confidence. C) it helps identify which rival is in which strategic group. D) it enables company managers to determine which rival has the worst strategy and how to avoid making the same strategy mistakes. E) it enables more accurate predictions about how long it will take a particular rival to copy most of what the strategy leader is doing.

Q: Strategic group mapping is a visual 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 for identifying each rival's closest competitors. D) which companies have the highest degrees of brand loyalty. E) which companies have failing business models.

Q: To succeed in predicting a competitor's next moves, company strategists need to appraise a rival's A) current strategy, financial health, market share, resources and capabilities. B) strategic group, assumptions, resources and capabilities, financial health. C) current strategy, assumptions, resources and capabilities, objectives. D) market share, strategic group, driving forces, assumptions. E) resources and capabilities, assumptions, current strategy, objectives.

Q: When all sellers pursue essentially identical strategies and have similar market positions A) they remain subject to different driving forces. B) they place about the same emphasis on various distribution channels. C) they use the same key success factors to differentiate their products. D) the industry can be said to contain one strategic group. E) they still must possess customer service attributes that differentiate them from one another in the marketplace.

Q: Not all positions on a strategic group map are equally attractive because A) small strategic groups are always less profitable than large strategic groups. B) entry and exit barriers are different for each strategic group. C) across-group rivalry is always weakest at the outer edge of the strategic group map. D) industry-driving forces and competitive pressures favor some groups and disadvantage others. E) key success factors are substantially different for differently positioned industry participants.

Q: 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 members with similar competitive approaches and market positions in the market. D) consists of those firms whose market shares are about the same size. E) is made up of those firms having comparable profit margins.

Q: What is the best technique for revealing the different market or competitive position that rival firms occupy in the industry? A) strategic group mapping B) PESTEL analysis C) five forces framework D) the Value Net framework E) competitor analysis

Q: Which 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 companies and countries D) increasing efforts to collaborate closely with suppliers E) advances in technology and manufacturing process innovation

Q: Which of the following driving forces would have the least impact on the attractiveness of the automobile industry? A) changes in the long-term industry growth rate B) entry or exit of major firms C) shifts in who buys the product and how the product is used D) changes in costs and efficiency E) regulatory influences and government policy changes

Q: Driving-forces analysis has A) speculative value because it compels the firm to drive strategic intent and collective choice into operating practices. B) theoretical value because it allows managers to visualize the many different dimensions of the preferred forces that allow for industry functionality. C) practical value and is basic to the task of thinking strategically about where the industry is headed and how to prepare for the changes ahead. D) no real analytical value because the driving forces are already established in the marketplace and it is too late to make astute and timely strategy adjustments. E) perceived value and is associated with identifying the close and distant rivals within an operating industry.

Q: 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) successful introduction of innovative new products or new ways to market products C) an increase in the prices of substitute products D) decisions on the part of industry's three biggest competitors not to pursue a strategy of striving to be the industry's low-cost leader E) decisions by one or more outsiders not to attempt to enter the industry

Q: Which of the following does 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, and changes in the long-term industry growth rate B) changes brought about by the entry or exit of major firms, product innovation, and marketing innovation and cost efficiency C) changes in the economic power and bargaining leverage of customers and suppliers, growing supplier-seller collaboration, and growing buyer-seller collaboration D) changes in buyer preferences for differentiated products instead of mostly standardized or identical products E) changes in economies of scale and experience curve effects brought on by changes in manufacturing technology and new Internet capabilities

Q: The real payoff of driving forces is to help managers understand A) what strategy changes are needed to prepare for the impacts of the driving forces. B) the overall strength of the five competitive forces. C) whether the industry's strategic group map will be static or dynamic. D) what conditions exist in the economy at large. E) the extent to which rivals have more than two competitively valuable competencies or capabilities.

Q: Which of the following is 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) increasing efforts to collaborate with suppliers via strategic alliances and partnerships, escalating risk levels and normalization of cost and efficiency in the industry E) marketing innovations and changes in who buys the industry's product and how they use it

Q: Driving-forces analysis typically does not include A) determining whether forces are acting to cause fundamental changes in industry conditions and/or the industry's competitiveness. B) determining whether forces are acting to cause industry rivals to shift to a different strategic group. C) determining whether forces are acting to strengthen or weaken market demand. D) determining whether forces are acting to make competition more or less intense. E) determining whether forces are acting to raise or lower industry profitability.

Q: 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) movement in the economy and in interest rates E) regulatory influences and government policy changes

Q: In analyzing driving forces, the strategist's role is to A) identify the driving forces and evaluate their impact on demand for the industry's product, the intensity of competition, and 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. D) determine who is likely to exit the industry and what changes can be expected in the industry's strategic group map. E) forecast fluctuations in product demand and how buyer needs will most likely change.

Q: One of the steps of driving-forces analysis is to identify which A) strategy changes a company may need to make to prepare for the impacts of the driving forces. B) strategic group is the most powerful. C) industry member is likely to become (or remain) the industry leader and why. D) key success factors are most likely to help their company gain a competitive advantage. E) of the five competitive forces will be the strongest driver of industry change.

Q: Evaluating the industry's driving forces, as a whole, requires understanding their influence on the attractiveness of industry environment and generally are A) determined by the sizes of strategic groups and the power of rival firms' competitive strategies. B) defined in ways that will strengthen or weaken market demand, competition, and industry profitability in future years. C) the cause of a reduction in the bargaining power of buyers. D) triggered by movement in the economy, higher or lower interest rates, or important new strategic alliances. E) triggered by such factors as growing competitive pressures from substitute products, and the efforts of rival firms to employ new or different offensive strategies.

Q: Driving-forces analysis helps managers identify whether A) the collective impact 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. C) the driving forces will have a bigger impact on company profitability than competitive forces. D) the industry is likely to become more or less vertically integrated and why. E) competitive advantages are likely to grow or diminish in importance.

Q: You have been asked to analyze the Value Net of the major regions of the California wine industry and have observed close relationships between wineries and local hospitality businesses (such as restaurants and lodging facilities) in the regions under study. Those local hospitality businesses can be said to be A) cohabitors. B) competitors. C) cooperators. D) complementors. E) customers.

Q: Industry conditions change because of A) such powerful driving forces as swings in buyer demand, changing interest rates, ups and downs in the economy, and higher/lower entry barriers. B) newly emerging industry threats and industry opportunities that alter the composition of the industry's strategic groups. C) newly emerging industry key success factors. D) important forces enticing or pressuring certain industry participants (competitors, customers, suppliers) to alter their actions in important ways. E) changes in the barriers to entry and the degree of competition from substitute products.

Q: Increasing globalization of the ride-share industry can be a driving force because A) the services provided by foreign ride-share competitors are nearly always cheaper or of better quality than those of domestic companies. B) foreign ride-share operators typically have lower costs, more technological expertise, and greater social network integration capabilities than domestic firms. C) ride-share companies need to spread their operating reach into more and more country markets to meet emerging consumer demand and take advantage of available operating opportunities. D) it results in ride-share companies having fewer competitors and a strategic group map with fewer circles. E) market growth rates rise, product innovation accelerates, and new ride-share startups are increasingly likely to enter the industry.

Q: 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. D) appear when an industry begins to mature but are seldom present during early stages of the industry life cycle. E) are usually triggered by shifting buyer needs and expectations or by the appearance of new substitute products.

Q: Which of the following is not an example of a complementor? A) microprocessors and laptops B) automobiles and gasoline stations C) theme parks and hotels D) gyms and fitness equipment E) newspapers and Internet news providers

Q: The value net framework includes an analysis of A) the firm, substitutes, suppliers, customers, and competitors. B) the firm, suppliers, customers, competitors, and driving forces. C) substitutes, suppliers, customers, competitors, and driving forces. D) the firm, suppliers, customers, competitors, and complementors. E) substitutes, suppliers, customers, competitors, and potential entrants.

Q: A company's strategy is increasingly effective the more it can match the company strategy to competitive conditions, so the firm can A) pursue avenues that expose the firm to as many of the different competitive pressures as possible. B) shift the competitive battle in favor of the firm by altering the underlying factors driving the five forces. C) pursue ways to identify and complement the five forces' contradictions and inferences to attract competitive growth opportunities. D) pursue avenues that promote strategic thinking about how to contest competitor strengths and weaknesses and to create a checklist of potential profitability preferences. E) shift societal concerns, attitudes, and lifestyles by altering the pattern of competition.

Q: As a rule, the collective impact of competitive pressures associated with the five competitive forces A) determines the strength of the industry's driving forces. B) determines the extent of the competitive pressure on industry profitability. C) means that fewer companies can achieve a competitive advantage via anything other than being the industry's low-cost leader. D) means there will be a larger number of competitive advantage opportunities for industry members. E) means there will be a greater number of industry key success factors.

Q: Based on an analysis of the five competitive forces, in which of the following industries is profitability likely to be highest? A) apparel B) tire manufacturing C) electric and gas utilities D) commercial airlines E) video streaming services

Q: 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 C) when the costs incurred by buyers in switching to competing brands or to substitute products are relatively low D) when the products of rival sellers are weakly differentiated and buyers have considerable discretion over whether and when they purchase the product E) when buyers are few in number and/or often purchase in large quantities

Q: Competitive pressures stemming from buyer bargaining power tend to be weakest in which of the following circumstances? A) Most consumers vary the brands they choose for their cookware and kitchen gadgets. B) There is a global decline in the demand for cable television services. C) The commercial jet aviation manufacturing industry offers highly differentiated products. D) The Internet offers a huge amount of information on a variety of products. E) Heinz owns a metal-can manufacturing subsidiary to cut back on supplier costs.

Q: Based on an analysis of the five competitive forces, in which of the following industries is profitability likely to be lowest? A) pharmaceuticals B) wireless lighting systems C) wearable fitness and health monitors D) pizza restaurants E) delivery services using drones

Q: In which of the following circumstances are competitive pressures associated with the bargaining power of buyers relatively moderate-to-weak? A) The supply of soccer balls increases during the World Cup season. B) Consumers can easily compare different smartphones' features over the Internet before buying them. C) Apple designs and manufactures its chip processors rather than buying them from Intel. D) Dairy products are usually standardized and therefore differentiated only by price. E) Buyers tend to delay purchases of luxury goods, such as home entertainment systems, until they are on sale.

Q: 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 greater number of companies that can achieve a competitive advantage via differentiation. C) the larger the number of competitive advantage opportunities for industry members. D) the greater the number of industry key success factors. E) the fewer companies that can achieve a competitive advantage via anything other than being the industry's low-cost leader.

Q: 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) sales are made to buyer groups with either strong bargaining power or high sensitivity. D) sellers are racing to add the latest and greatest performance features so as to attract the patronage of important or prestigious buyers. E) buyers are very quality conscious.

Q: 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. D) offers moderate to good prospects for making a reasonable profit and building a sustainable competitive advantage. E) requires that industry members have a strongly differentiated product offering in order to be profitable.

Q: Which of the following factors is not a relevant consideration in determining the strength of buyer bargaining power? A) the relationship between the buyer market and seller market B) the degree to which the seller is a manufacturer of goods and services in substantial quantities C) the degree to which buyers pose a credible threat to integrate backward into the product market of sellers D) the degree to which buyers are well-informed about a seller's products, prices, and costs E) the degree to which industry goods are standardized and undifferentiated

Q: 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 challenging for industry members to compete successfully unless they can strongly differentiate their products. D) is conducive to industry members earning attractive profits. E) requires that industry members have low costs in order to be competitively successful.

Q: Buyer bargaining power is stronger when A) winning the business of certain high-profile customers offers a seller important market exposure or prestige. B) the extent and importance of collaborative partnerships and alliances between particular sellers and buyers are credible. C) buyers cannot integrate backward into the product market of sellers. D) sellers' products are differentiated, making it easy and inexpensive for buyers to switch to competing brands. E) the industry's products are standardized or undifferentiated.

Q: Not all buyers of an industry's product have equal degrees of bargaining power with sellers because A) sellers in an industry provide similar products and generally their cost structures are different because of competitive advantages in their operation. B) some sellers may be less sensitive than others to price, quality, or service differences. C) along the various stages of the value chain sellers are conducive to earning attractive profits. D) the industry is a highly cohesive structure with limited fragmentation and few industry members. E) sellers are large and few in number relative to the number of buyers.

Q: 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) Buyers are small and numerous relative to sellers. C) Buyers have considerable discretion over whether and when they purchase the product. D) Buyers purchase the item frequently and are well-informed about sellers' products, prices, and costs. E) The costs incurred by buyers in switching to competing brands or to substitute products are relatively low.

Q: 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 D) whether sellers' products are highly differentiated, making it troublesome or costly for buyers to switch to competing brands or to substitute products E) whether buyers pose a major threat to integrate backward into the product market of sellers

Q: Whether buyer bargaining power poses a strong or weak source of competitive pressure on industry members depends in part on A) the degree to which buyers have any bargaining preferences and the extent to which buyers are price sensitive. 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.

Q: 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) buyers are price sensitive because the product represents a significant portion of their purchasing budget.

Q: 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 conditions of sale in their favor and whether strategic partnerships between certain industry members can adversely affect other industry members. C) how many buyers purchase all of their requirements from a single seller versus how many purchase from several sellers. D) the number of buyers versus the number of sellers. E) whether industry members are spending more or less on advertising.

Q: The higher the switching costs for industry members, the more it can A) limit supplier bargaining power. B) enhance supplier bargaining power. C) enhance the quality of parts and components being supplied, and in effect reduce defect rates. D) provide important cost savings for the collaborative supplier-seller relationship. E) limit the supply of products and/or services.

Q: When an industry member is a major customer of the supplier, and the relationship (partnership) is unusually effective and mutually advantageous A) it is rare for such partnerships to have much competitive impact on those industry members not having such partnerships. B) one unfortunate outcome is that it tends to give the supply partners much enhanced bargaining power in their dealings with these industry members. C) there is a strong likelihood such partnerships will put increased competitive pressure on those industry members who lack productive collaborative relationships with their suppliers. D) there is a high likelihood of such partnerships reducing competitive pressures on all industry members, provided technological change in the suppliers' business is rapid and the item being supplied is a commodity. E) the usual result is to reduce competitive pressures on all industry members, provided the costs of the items furnished by supply chain partners amount to 50 percent or more of total cost.

Q: In which one of the following instances is supplier bargaining power and leverage 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 items purchased from suppliers are in short supply D) when the buying firms purchase in large quantities and thus are important customers of the suppliers E) when the item being supplied is a commodity

Q: The bargaining leverage of suppliers is greater when A) the suppliers' products/services account for a small percentage of industry members' costs. B) industry members incur low costs in switching their purchases from one supplier to another. C) industry members account for a big fraction of supplier's sales. D) there is extensive seller-supplier collaboration. E) the supplier industry is composed of a large number of relatively small suppliers.

Q: 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 and whether suppliers provide differentiated input that enhances performance of the product. B) whether suppliers self-manufacture what they supply or source their items from other manufacturers. C) whether the industry's position in the growth cycle is favorable. D) whether technological change in the businesses of suppliers is rapid or slow. E) whether the needs and expectations of supplier-seller relationships are changing slowly or rapidly.

Q: 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.

Q: 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 average number of suppliers that each seller/industry member purchases from. C) how aggressively rival industry members are trying to differentiate their products. D) whether demand for supplier products is high and they are in short supply. E) whether the prices of the items being furnished by the suppliers are rising or falling.

Q: Competitive pressures associated with the threat of entry are greater in all of the following situations except when A) incumbent firms are willing to strongly contest the entry of newcomers with moves designed to make entry unprofitable. B) a large pool of potential entrants exists, some of which have the capabilities to overcome high entry barriers. C) entry barriers are relatively low and buyer demand for the product is growing rapidly, and newcomers can expect to earn attractive profits without inviting a strong reaction from incumbents. 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) customers have low brand preferences and low degrees of loyalty to seller.

Q: The lower the user's switching costs, the A) harder it is for the sellers of attractive substitutes to lure buyers to their offering. B) more intense the competitive pressures posed by substitute products. C) less intense the competitive pressures posed by substitute products. D) greater the bargaining power from both suppliers and influential customers. E) lesser the bargaining power from both suppliers and influential customers.

Q: Potential entrants are more likely to be deterred from actually entering an industry when A) incumbent firms are willing and able to be 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. D) the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage. E) buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

Q: Determining how strong the threat of substitutes will be entails A) identifying the relative price/performance relationship of the substitutes, the switching costs, and the overall buyer demand for the substitute. B) identifying the attractiveness of other industries. C) measuring Coke as a substitute for Pepsi and applying dynamic simulation modeling techniques. D) adopting a substitute product concentration factor to the buyer volume. E) judging whether industry members are capable of self-manufacturing their products.

Q: Which of the following is generally not considered a barrier to entry? A) restrictive regulatory policies B) high capital requirements C) strong brand preferences D) many industry patents in place E) weak network effects in customer demand

Q: 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 are well-matched to what buyers need to meet their requirements. D) Buyer brand loyalty is weak. E) Substitutes are readily available at competitive prices.

Q: Identify and briefly discuss at least two examples of faulty oversight by a company's board of directors in corporate governance and/or the strategy-making, strategy-executing process.

Q: The competitive pressures from substitute products tend to be stronger when A) good substitutes are readily available. B) there are fewer number of substitute products. C) substitutes have lower performance features. D) buyers incur high costs in switching to substitutes. E) substitutes are priced above the market.

Q: Brad Black and Susan Griffin-Black are cofounders and top managers of one of the last large independently owned organic beauty companies, EO Products. Explain the strategy the partners could use to strengthen EO Products' market position and build a competitive advantage over its rivals. Differentiate between a business strategy and a corporate strategy.

Q: 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 D) snowboards as a substitute for snow skis E) video-on-demand services from a cable TV company as a substitute for going to the movies

Q: A company's board of directors plays an independent and fiduciary role in corporate governance and the strategy-making, strategy-executing process. True or false? Please explain.

Q: Six years after its founding, in 2009, at 25, Elizabeth Holmes, founder and CEO of Theranos, a company based in Palo Alto, California, that manufactured and marketed medical devices for testing blood, told a small group at Stanford University that her ticket to success was "conviction" that you could "make something work, no matter what." On June 15, 2018, Holmes and Theranos's former president Ramesh "Sunny" Balwani were indicted on multiple counts of wire fraud and conspiracy to commit wire fraud. According to the indictment, investors and doctors and patients were defrauded. Holmes herself had falsely claimed in 2014 that the company had annual revenues of $100 million, a thousand times more than the actual figure of $100,000. Prosecutors claimed they had engaged in an "elaborate, years-long fraud" wherein they "deceived investors into believing that its key producta portable blood analyzercould conduct comprehensive blood tests from finger drops of blood." It was alleged the defendants were aware of the unreliability and inaccuracy of their products, but concealed that information. If convicted, they each face a maximum fine of $250,000 and 20 years in prison. Normatively speaking, which actions should Theranos's board of directors have taken to provide good governance oversight and prevent this fraud from occurring?

Q: 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's market growth is rapid. C) the pool of entry candidates is large and some have resources that would make them formidable market contenders. D) newcomers can be expected to earn attractive profits. E) buyers have little loyalty to the brands and product offerings of existing industry members.

Q: Identify and explain four actions that top executives can take that are key elements in directing organizational action and building capabilities behind the drive for good strategy execution to meet or beat performance targets.

Q: Identify and explain three actions that top executives can take to help instill a spirit of high achievement into the corporate culture and mobilize organizational energy behind the drive for good strategy execution and operating excellence.

Q: An organization's strategic plan consists of the actions that management plans to take in the near future. True or false? Explain and justify your answer.

Q: Weak governance at Volkswagen contributed to the 2015 emissions-cheating scandal, which cost the company billions of dollars and the trust of its stakeholders. Explain.

Q: Compare and contrast the strategy-making hierarchy at Patagonia, a privately owned manufacturer and marketer of sustainable outdoor clothing, with the strategy-making hierarchy at Nike, a publicly traded multinational corporation engaged in the design, development, manufacturing, and worldwide marketing and sales of diversified footwear, apparel, equipment, accessories, and services.

Q: Explain why a company's strategy is really a collection of strategies.

Q: Explain the difference between financial objectives and strategic objectives. Give examples of each.

Q: The task of crafting a company's strategy is typically a job for the company's whole management team, not just a small group of senior executives. True or false? Explain and support your answer.

Q: Why does an organization need both financial and strategic objectives?

Q: What is meant by the term "stretch objectives"? Is it important that companies establish stretch objectives? Why or why not?

Q: What are some of the arguments for and against adopting the balanced scorecard approach? Explain and then provide several examples of organizations that have adopted the balanced scorecard performance measurement system.

Q: Identify and provide at least two examples illustrating the key characteristics of a well-stated organizational objective.

Q: Explain the role and responsibility of the CEO in the strategy-making, strategy-executing process. Name several CEOs and their companies that exemplify this role.