Q&A Hero

Q: Well-conceived visions are ________ and ________ to a particular organization and they avoid generic, feel-good statements that could apply to hundreds of organizations. A) widespread; unique B) recurring; customary C) distinctive; specific D) customary; familiar E) universal; established

Q: The wording of a company's vision statement should commonly be A) vague or incompleteshort on specifics. B) flexibleadjustable according to changing circumstances. C) bland or uninspiringshort on inspiration. D) genericcould apply to almost any company (or at least several others in the same industry). E) reliant on superlatives (best, most successful, recognized leader, global or worldwide leader, first choice of customers).

Q: Management's strategic vision for an organization A) charts a strategic course for the organization ("where we are going") and provides a rationale for why this directional path makes good sense. B) describes in fairly specific terms the organization's strategic objectives, and strategy. C) spells out how the company will become a big moneymaker and boost shareholder value. D) addresses the critical issue of "why our business model needs to change and how we plan to change it." E) spells out the organization's strategic intent and the actions and moves that will be undertaken to achieve it.

Q: An effectively worded strategic vision statement is not likely to be A) directional (is forward-looking, describes the strategic course that management has charted that will help the company prepare for the future). B) easy to communicate (is explainable in 5-10 minutes, and can be reduced to a memorable slogan). C) graphic (paints a picture of the kind of company management is trying to create and the market position(s) the company is striving to stake out). D) consensus-driven (commits the company to a "mainstream" directional path that almost all stakeholders will enthusiastically support). E) focused (provides guidance to managers in making decisions and allocating resources).

Q: An unlikely, inaccurate feature of an organization's strategic vision is A) providing a panoramic view of "where we are going." B) outlining how the company intends to implement and execute its business model. C) pointing an organization in a particular direction and charting a strategic path for it to follow. D) helping mold an organization's character and identity. E) describing the company's future product-market-customer focus.

Q: Characteristics of an effectively worded strategic vision statement are most likely to include A) balanced, responsible, and rational. B) challenging, competitive, and "set in concrete." C) graphic, directional, and focused. D) realistic, customer-focused, and market-driven. E) achievable, profitable, and ethical.

Q: The managerial task of developing a strategic vision for a company A) concerns deciding what approach the company should take to implement and execute its business model. B) entails coming up with a fairly specific answer to "who are we, what do we do, and why are we here?" C) is chiefly concerned with addressing what a company needs to do to successfully outcompete rivals in the marketplace. D) involves deciding upon what strategic course a company should pursue in preparing for the future and why this directional path makes good business sense. E) entails coming up with a concrete plan for how the company intends to make money.

Q: Company managers are unlikely to consider this question when choosing to pursue one strategic course or directional path versus another. A) Are changing market and competitive conditions acting to enhance or weaken the company's business outlook? B) Is the company stretching its resources too thinly by trying to compete in too many markets or segments, some of which are unprofitable? C) Will our present business generate sufficient growth and profitability in the years ahead to please shareholders? D) What market opportunities should the company pursue and which ones should not be pursued? E) Do we have a better business model than key rivals?

Q: A strategic vision constitutes management's view and conclusions about the company's A) long-term direction and what product-market-customer mix seems optimal. B) business model and the kind of value that it is trying to deliver to customers. C) justification of why the business will be a moneymaker. D) past and present scope of work. E) long-term plan for outcompeting rivals and achieving a competitive advantage.

Q: When company managers are in the process of thinking strategically about what directional path should be taken by the company, they are not likely to ask which question? A) Is the outlook for the company promising if it continues with its present product offerings? B) Are changing market and competitive conditions acting to enhance or weaken the company's prospects? C) What business approaches and operating practices should we consider in trying to implement and execute our business model? D) What strategic course offers attractive opportunity for growth and profitability? E) What, if any, new customer groups and/or geographic markets should the company get in position to serve?

Q: The real purpose of the company's strategic vision A) lays out how management plans to implement and execute a profitable business model. B) describes what business the company is presently in and why it has chosen certain operating practices to meet the needs of customers. C) serves as management's tool for giving the organization a sense of direction. D) defines "who we are and what we do." E) spells out a company's strategic intent, its strategic and financial objectives, and the business approaches and operating practices that will underpin its efforts to achieve sustainable competitive advantage.

Q: The defining characteristic of a well-conceived strategic vision is A) what it says about the company's future strategic course"the direction we are headed and what our future product-market-customer focus will be." B) that it not stretch the company's resources too thin across different products, technologies, and geographic markets. C) clarity and specificity about "who we are, what we do, and why we are here." D) that it be flexible and operate in the mainstream. E) that it be within the realm of what the company can reasonably expect to achieve within four years.

Q: A company's strategic vision concerns A) management's storyline of how it intends to make a profit with the chosen strategy "who we are and what we do." B) what future actions the enterprise will likely undertake to outmaneuver rivals and achieve a sustainable competitive advantage. C) "who we are and what we do." D) a company's directional path and future product-customer-market-technology focus. E) why the company does certain things in trying to please its customers.

Q: When companies adopt the strategy-making and strategy-execution process, it requires they start by A) developing a strategic vision, mission, and values. B) developing a proven business model, deciding on the company's top management team, and crafting a strategy. C) strategic management, developing a business model, crafting a strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage. D) coming up with a statement of the company's mission and communicating it to all employees, strategic management, selecting a business model, and monitoring developments and initiating corrective adjustments to the business model when necessary. E) deciding on the company's board of directors, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ.

Q: The strategy-making, strategy-executing process is shaped by A) management's strategic vision, strategic and financial objectives, and strategy. B) the decisions made by the compensation and audit committees of the board of directors. C) external factors such as the industry's economic and competitive conditions and internal factors such as the company's collection of resources and capabilities. D) the challenges of developing a sound business model. E) top executives and the board of directors; very few managers below this level are involved in the process.

Q: Integral parts of the managerial process of crafting and executing strategy include A) developing a strategic vision, strategic management, and crafting a strategy. B) developing a proven business model, deciding on the company's strategic intent, and crafting a strategy. C) strategic management, crafting a strategy, implementing and executing the chosen strategy, and deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage. D) coming up with a statement of the company's mission and purpose, strategic management, choosing what business approaches to employ, selecting a business model, and monitoring developments. E) deciding on the company's strategic intent, setting financial objectives, crafting a strategy, and choosing what business approaches and operating practices to employ.

Q: An integral part of the managerial process of crafting and executing strategy includes A) developing a proven business model. B) deciding how much of the company's resources to employ in the pursuit of sustainable competitive advantage. C) developing a strategic vision. D) communicating the company's values and code of conduct to all employees. E) deciding on the company's strategic intent.

Q: A company's strategic plan A) maps out the company's history. B) links the company's financial targets to control mechanisms. C) outlines the competitive moves and approaches to be used in achieving the desired business results. D) focuses on offering a more appealing product than rivals. E) lists methods of making money in its chosen business.

Q: A data storage company realizes that its facilities are used most by financial institutions. It capitalizes on the opportunity and starts storing specific financial information only and is now one of the most sought-after financial databases. What strategy has the company employed?

Q: The five basic tasks of the strategy-making, strategy-executing process DO NOT include A) developing a strategic vision of where the company needs to head and what its future business makeup will be. B) strategic management to convert the strategic vision into specific strategic and financial performance outcomes for the company to achieve. C) crafting a strategy to achieve the objectives and get the company where it wants to go. D) developing a profitable business model. E) executing the chosen strategy efficiently and effectively.

Q: An electronic chip manufacturer has a quarterly release of its products. What can you say about its strategy?

Q: Explain why some companies get to the top of industry rankings and stay there, while others do not.

Q: LinkedIn specializes in social networking for businesses and recruiters. Which of the five generic strategies is LinkedIn employing?

Q: A fashion magazine plans to cut down on its fashion-related content and provides the space instead for high-priced advertisements, but somehow fails to convince giant fashion brands to advertise in its magazine. What do we understand from this failure?

Q: A dining facility with multiple branches caters to newlywed couples only. The ambience, special live music arrangements for each couple, and privacy of the dining sections have become a rage among newlyweds. Which of the five generic strategies has the company used?

Q: A new entrant into the mobile phone market imitates its rivals' cellphones feature for feature, but offers its products at a 20 percent discount over its rivals' prices. What can you say about the new entrant's prospects for long-term success?

Q: A mobile on-demand transportation company with an established brand name uses a unique mobile app and GPS mapping technology to reduce the time for drivers to pick up passengers and take them to their destinations. It then gives the mobile apps away free to all riders. Which of the five generic strategies is this company using?

Q: A pizza maker manufactures thin-crust pizzas and offers free soft drinks with a pack of four pan pizzas. What can you say about its Value-Price-Cost Framework?

Q: A mobile phone manufacturing and marketing company acquires an overseas display manufacturing company to gain a strong market position. Which of the five generic strategies has the mobile phone manufacturer used to gain competitive advantage?

Q: Keurig, a coffee machine manufacturer, sells high-quality espresso machines at a very low price but provides low-cost refills of varietal coffee pods at a relatively higher price than rivals. Explain this business model.

Q: A well-established brewery offers lower-priced beer to powerful supermarket buyers at widespread locations and has loyal distributors that supply mass goods to supermarket retailers. With fewer ways to achieve differentiation in the market, most new microbrewery entrants offer similar products but lack sufficient funding to compete against the well-established brewery. Which strategy could new microbrewers employ? Explain your answer.

Q: An established company in a market decides to donate a part of its profits to a children's charity to improve its market image. Soon after, it launches a website that offers new clothes, accessories, and books that could be donated to various children's charities by interested parties. The company gained positive publicity and its sales went up. What would you say about this strategy?

Q: An established manufacturer and marketer of apparel and equipment for competitive sports is fast losing market share to companies that not only offer similar products, but also are upgrading their research and development capabilities to produce better products. List a few general actions and approaches that would help the established company revive its position.

Q: A new entrant in a market dominated by established players introduces itself with copycat products of another competitor. Would this strategy work in the long-term for the firm? Justify your answer.

Q: Answer: The central thrust of Apple Inc.'s strategy is undertaking moves to build and strengthen the company's long-term competitive position and financial performance by competing differently from rivals and gaining a sustainable competitive advantage over them. Hallmarks of Apple Inc.'s strategy are highlighted in Illustration Capsule 1.1. These elements include:

Q: Good strategy plus good strategy execution equals good management. True or false? Justify and explain your answer.

Q: Mediocre execution of a powerful strategy is a proven recipe for winning in the marketplace. True or false? Explain your answer.

Q: Why is it appropriate to argue that good strategy-making combined with good strategy execution are valid signs of good management?

Q: During a recession, a high-end beverage producer facing strong competition in a saturated market has decided to phase out all its flagship products and introduce a new line of second-label beverages at lower price points in reaction to its falling market share. Would this type of a reactive strategy revive its position? Why or why not?

Q: Why is sustainable competitive advantage so important to a winning business strategy?

Q: Should a company's strategy be tightly connected to its quest for competitive advantage? Why or why not? What difference does it make whether a company has a sustainable competitive advantage or not?

Q: How can a manager tell a winning strategy from a strategy that is mediocre or a loser?

Q: What are the three questions that managers can use to distinguish a winning strategy from a so-so or flawed strategy? Briefly explain why each question is important.

Q: What factors determine whether a strategy can be called a winning strategy?

Q: Provide at least two examples of a company's competitively valuable capabilities.

Q: Explain in detail what a company's business model entails.

Q: What is the connection between a company's strategy and its quest for sustainable competitive advantage?

Q: Explain why a company's strategy cannot be completely planned out in advance and why crafting a company's strategy cannot be a one-time, once-and-for-all managerial exercise. Identify at least three factors that account for why company strategies evolve.

Q: Identify and briefly describe the five most frequently used strategic approaches to achieving a sustainable competitive advantage. Provide examples.

Q: Can an organization succeed by pursuing strategies that are proactive and reactive? Explain.

Q: What are the three tests of a winning strategy?

Q: Why is a company's strategy typically a blend of proactive and reactive approaches?

Q: Briefly define each of the following terms. a. Sustainable competitive advantage b. Deliberate strategy c. Emergent strategy d. Realized strategy e. Abandoned strategy

Q: Compare the business models of Gillette and Epson.

Q: What is strategy and why is it important?

Q: Changing circumstances and ongoing managerial efforts to improve the strategy A) account for why a company's strategy evolves over time. B) explain why a company's strategic vision undergoes almost constant change. C) make it very difficult for a company to have concrete strategic objectives. D) make it very hard to know what a company's strategy really is. E) are consistent with a planned strategy approach.

Q: A company's business strategy is not likely to include A) actions to respond to changing market conditions or other external factors. B) actions to strengthen competitiveness via strategic alliances and collaborative partnerships. C) actions to strengthen internal capabilities and competitively valuable resources. D) actions to manage the functional areas of the business. E) management's actions to revise the company's financial and strategic performance targets.

Q: A company achieves sustainable competitive advantage when A) it has a profitable business model. B) a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors. C) it is able to maximize shareholder wealth. D) it is consistently able to achieve both its strategic and financial objectives. E) its strategy and its business model are well matched and in sync.

Q: A seldom used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage is 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, or technological superiority. C) developing competitively valuable resources and capabilities that rivals cannot easily match, copy, or trump with capabilities of their own. D) focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche. E) copying the attributes of a popular product or service.

Q: Why are crafting and executing business strategies the foremost tasks of any organization? A) because they are necessary ingredients of a sound operational business model B) because a good strategy coupled with a good strategy execution are the most telling signs of good. management and allow a company to be a standout performer in the marketplace C) because the management skills of top executives are sharpened as they work their way through the strategy-making, strategy-executing processes D) because doing these tasks helps executives develop an appropriate strategic vision, strategic intent, and set of strategic objectives E) because of the contribution they make to maximizing value for shareholders

Q: A winning strategy is one that A) builds strategic fit, is socially responsible, and maximizes shareholder wealth. B) is highly profitable and boosts the company's market share. C) results in a company becoming the dominant industry leader. D) fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance. E) can pass the ethical standards test, the strategic intent test, and the profitability test.

Q: For John Sidanta, CEO and founder of Primaplast, a manufacturer of biodegradable plastic drinking straws made from recycled material, crafting and executing a strategy is a top-priority managerial task because it A) helps Primaplast management create tight fits between a company's strategic vision and business model. B) allows Primaplast company personnel, and especially senior executives, to know the answer to "who are we, what do we do, and where are we headed?" C) is Primaplast management's prescription for doing business, its roadmap to competitive advantage, a game plan for pleasing customers, and its formula for improving performance, especially in light of impending community and some food service outlets' bans on conventional plastic drinking straws. D) provides Primaplast with clear guidance as to what the company's business model and strategic intent are, and helps keep managerial decision-making from being rudderless. E) establishes how well Primaplast executives perform these tasks and are the key determinants of executive compensation.

Q: In evaluating proposed or existing strategies managers should A) initiate new initiatives even though they don't seem to match the company's internal and external situation. B) scrutinize the company's existing strategies on a regular basis to ensure they offer a good strategic fit, create a competitive advantage, and result in above-average performance. C) evaluate the firm's business model at least every three years. D) ensure core capabilities are incorporated for establishing a competitive advantage. E) align existing strategies with new strategies to emphasize incremental gains.

Q: To test the merits of a firm's strategy and distinguish it as a winning strategy, which major question needs to be addressed? A) Is the company's strategy ethical and socially responsible, and does it put enough emphasis on good product quality and good customer service? B) Is the company putting too little emphasis on growth and profitability and too much emphasis on behaving in an ethical and socially responsible manner? C) Is the strategy resulting in the development of additional competitive capabilities? D) Is the strategy helping the company achieve a sustainable competitive advantage, and is it resulting in better company performance? E) Does the strategy strike a good balance between maximizing shareholder wealth and maximizing customer satisfaction?

Q: Consider the following five companies and their situations. Company A is an established online fantasy sports gaming company that has been accused of game-rigging, bribes and kickbacks. Company B, a ride share company, has delayed its planned initial public offering due to reports of having an inhospitable workplace characterized by sexual harassment and discrimination. Company C, a pharmaceutical manufacturer, charges higher prices for life-saving drugs in some countries than it charges in others. Company D, a manufacturer and marketer of high-end consumer electronics, has a strict Code of Conduct that requires its suppliers to comply with several standards regarding safe working conditions, fair treatment of workers, and environmentally safe manufacturing. Company E, a pizza delivery business, is a being boycotted by customers and losing sponsored tie-ins with professional sports due to racist comments by its founder and CEO. Which of the above companies is distinguished by an ethical strategy as opposed to an unethical or flawed strategy? A) Company A B) Company B C) Company C D) Company D E) Company E

Q: A pharmaceutical giant acquires a manufacturer of rare specialty drugs to improve its falling share prices and invests all its wealth into the deal. Due to a deficit, it agrees to do a joint venture for the acquisition and involves a major automobile giant to fund the deal. After a rocky start, the companies now have a strong market position and generate good profits. How would you characterize this company's strategy? A) It fails the performance test. B) It fails the competitive advantage and the fit tests. C) It is a winning strategy. D) It fails in all three tests. E) It fails the fit test but passes the competitive advantage and performance tests.

Q: To distinguish a winning strategy from a mediocre or losing strategy, a strategic manager should ask which question? A) How good is the company's business model? B) Is the company a technology leader? C) Does the company have low prices in comparison to rivals? D) Is the company putting too little emphasis on behaving in an ethical and socially responsible manner? E) How well does the strategy fit the company's situation?

Q: Ben Weprin is founder and CEO of Graduate Hotel, a growing chain of boutique hotels situated near college campuses and designed to cater to the nostalgia and local boosterism that are part of the culture of university towns. (Room keys are imprinted with the names of famous alumni, and public spaces are decorated with historical photos of campus life, vintage art and other collegiate artifacts.) Mr. Weprin and his company are trying to create a brand that will find year-round business by catering to more than just alumni coming back for once-a-year football weekends or 10-year anniversaries of their graduating classes. What is the major question that Mr. Weprin and his team need to ask about his company's strategy? A) What must managers do, and do well, to make a company a winner in the marketplace? B) What can employees do, and do well, to ensure customer satisfaction? C) What can shareholders do, and do well, to ensure a profitable company? D) What do customers do, how to profile customers who buy a company's product, and tailor sales strategy around them? E) What do suppliers do, and how to get supplies at the lowest cost to build a profitable business?

Q: A winning strategy must pass which three tests? A) the dominant market test, the sustainable advantage test, and the profit test B) the fit test, the competitive advantage test, and the performance test C) the sustainable performance test, the fit test, and the profit test D) the performance test, the dominant market test, and the fit test E) the fit test, the sustainable advantage test, and the dominant market test

Q: A winning strategy is one that A) builds strategic fit, is socially responsible, and maximizes shareholder wealth. B) is highly profitable and boosts the company's market share. C) fits the company's internal and external situation, builds sustainable competitive advantage, and improves company performance. D) results in a company becoming the dominant industry leader. E) can pass the ethical standards test, the strategic intent test, and the profitability test.

Q: Excellent execution of an excellent strategy is A) the best test of managerial excellence and the best recipe for making a company a standout performer. B) a solid indication that managers are maximizing profits and looking out for the best interests of shareholders. C) the best test of whether a company is a true industry leader. D) the best evidence that managers have an emerging business model. E) the best test of whether a company enjoys sustainable competitive advantage.

Q: The most significant signs of a well-managed company are A) the eagerness with which executives set stretch financial and strategic objectives and develop an ambitious strategic vision. B) aggressive pursuit of new opportunities and a willingness to change the company's business model whenever circumstances warrant. C) good strategy-making combined with good strategy execution. D) a visionary mission statement and a willingness to pursue offensive strategies rather than defensive strategies. E) a profitable business model and a balanced scorecard approach to measuring the company's performance.

Q: A search engine giant specializes in all types of search items; provides a free translation feature for 80 different languages; stores all passwords for commonly visited sites in encrypted form; allows users to view ads on previously made related searches; provides suggestive search items to assist the user; allows users to view a collection of related web pages users might want to visit; and provides a faster load time and more accurate hits than its rivals. This search engine company uses a profit formula that primarily consists of A) providing a free translation feature for 80 different languages. B) allowing users to view ads on previously made related searches. C) allowing users to view a collation of related web pages users might want to visit. D) providing a faster load time and more accurate hits than its rivals. E) providing suggestive search items based on history of sites visited.

Q: Good strategy combined with good strategy execution A) offers a surefire guarantee for avoiding periods of weak financial performance. B) is the best sign that a company is a true industry leader. C) is a more important management function than forming a strategic vision combined with setting objectives. D) is the clearest indicator of good management. E) signals that a company has the best business model in a market.

Q: Troopline Inc., an online laptop retailer, sells laptops of similar range and features as other online laptop retailers. Which of the value propositions would not benefit the company? A) providing free delivery of purchased laptops B) allowing customers to pay through gift coupons C) updating the site with better high-resolution pictures of laptops D) providing mobile friendly version of the site and compatible apps for mobile users E) establishing a comparison feature tab that allows customers to compare offerings from other online retailers

Q: Based upon its advertising slogan, the pizza restaurant that likely offers the best value proposition to its customers is A) Johnny's Pie Shop: "The Tastiest Pizza You've Ever Had." B) Fast n'Fresh Pizza: "Get fresh, hot pizza, delivered under 20 minutesor it's free." C) Sustainable Slices: "Organic and sustainably sourced ingredients that are good for you and the planet." E) Crackerjack Pizza: "Open your pizza box and find a free gift. Hurry! Free gifts for 100 lucky customers." Answer: B

Q: You have been asked to advise Waltham Furniture, a company that seeks to serve a target middle-class customer demographic obsessed with the quality and price of products. Your proposed value proposition for this company to offer to its customers would be to A) identify the unique features of your client's furniture without comparing it with a rival's products. B) offer copycat furniture at low cost but an average quality compared to your client's rivals. C) offer the same quality of furniture as do your client's rivals but at a high cost based on greater market share and higher brand value. D) provide comparable quality furniture at a much lower price than your rivals but leave the final assembly of purchased furniture to customers accompanied by an easy-to-follow assembly guide. E) market and sell only average quality furniture compared to your rivals at an imperceptible difference in price.

Q: A regional electric scooter manufacturer sells its scooter at a lower price than other manufacturers of two-wheeler scooters. What will make the product most attractive for customers? A) low profit B) high value C) high cost D) low value E) low cost

Q: The customer value proposition lays out the company's approach to A) meeting profitability guidelines without the risk of losing customers. B) operating efficiently given the current level of customers. C) embracing rival company approaches to gaining customers. D) satisfying customer wants and needs at a price that customers will consider a good value. E) assuring that the company makes enough profits based on its per-unit cost.

Q: The difference between a company's strategy and a company's business model is that A) a company's strategy is management's game plan for achieving strategic objectives while its business model is management's game plan for achieving financial objectives. B) the strategy concerns how to compete successfully and the business model concerns how to operate efficiently. C) a company's strategy is management's game plan for realizing the strategic vision, whereas a company's business model is the game plan for accomplishing its corporate responsibility goals. D) strategy relates broadly to a company's competitive moves and business approaches while its business model relates to whether the revenues flowing from the strategy are sufficient to cover costs and realize a profit. E) a company's strategy is solely concerned with how to please customers while its business model is solely concerned with how to please shareholders.