Chapter 1 Flashcards
The board of directors of Indigo Bank implements a sound strategy that will help them gain overall profits and maintain competitive advantage. It claims that supervising and measuring the efficacy of the functional strategies of the company are more than sufficient to implement the company’s strategies. However, Klark, one of the board members, argues that this alone is not enough and that the company should think of creating an emotional appeal toward its employees. Which of the following statements strengthens Klark’s argument?
a) The board of directors feels that creating an informal environment will initiate a high level of absenteeism.
b) The board of directors feels that Indigo Bank is functioning efficiently because the top executives make it a point to maintain an authoritarian distance from their subordinates.
c) Indigo Bank’s structure, systems, staff, skills, style, and shared values will help progress strategic implementation if they are designed to facilitate the execution of the strategy.
d) The employees of Indigo Bank are content with the current culture of the organization.
c) Indigo Bank’s structure, systems, staff, skills, style, and shared values will help progress strategic implementation if they are designed to facilitate the execution of the strategy.
Adia and Ali are two business partners who want to set up a company that sells imported sports gear and equipment. In order to make sure that the company makes and retains profit, they must choose an area that is close to where their products have the highest demand. This area should allow them consistently to make profit. In this scenario, Adia and Ali are looking for a ________.
a) mission
b) cost advantage
c) market
d) strategy
c) market
Which of the following is true of competitive advantage?
a) It should be avoided by not-for-profit organizations.
b) It requires a company to consistently outperform its rivals in generating above-average profits.
c) It is usually achieved by firms that provide general as well as imitable products.
d) It can be measured by using only tangible outcomes.
b) It requires a company to consistently outperform its rivals in generating above-average profits.
Which of the following statements is true of external analysis?
a) It is capable of analyzing only the threats that a company might come across.
b) It analyzes a firm’s resources and capabilities to assess how effectively it is able to deliver unique value.
c) It focuses on the factors that influence employees of an organization to leave.
d) It studies the factors that influence an organization’s appeal and environment.
d) It studies the factors that influence an organization’s appeal and environment.
The owners of Carpo Inc., a watch company, also own a steel company and a leather goods manufacturing company. This relieves them from expenses that they would have to bear, if they had to rely on outside sources for the raw materials needed to make their watches. This enables the company to produce watches at a much lesser cost than other companies in the industry. This scenario best illustrates a ________.
a) unique value
b) complementary service
c) cost advantage
d) emergent strategy
c) cost advantage
Summer Inc., a departmental store, wants to provide better service to its customers. This includes providing expertise in each type of product and brand. In order to accomplish this, the general manager of the store suggests that they should begin by identifying the different types of customers. By classifying customers, into various groups, such as mothers, athletes, tech-savvy customers and so on, the store’s customer care personnel can specialize on detailed product information. With the help of this classification, the store is able to provide better service to each customer by offering more brands to choose from. This scenario best illustrates ________.
a) division dynamics
b) group dynamics
c) group allocation
d) segmentation analysis
d) segmentation analysis
Appetit Corp. is a famous deli in the metropolitan city of Atika. The company became popular because of its consistency in the quality of bread it provided and its creativity in adding unique elements to create different flavors. One of Appetit’s products is an infusion of peanut butter and barbeque sauce filled in a bun. Appetit Corp. also engages its customers in contests that ask them to make their own unique variety of bread, which later features among the company’s products with the winner’s name. All these factors have helped to create unique value that keeps its customers coming back for more. This scenario best illustrates Appetit Corp.’s ________.
a) values
b) substitutes
c) resources
d) capabilities
d) capabilities
Sheng, the CEO of Mirrorz Inc., comes up with a plan to implement business unit strategies successfully. He decides to do this by making technical advancements in the manufacturing process of the products and developing a solid financial system run by an efficient team. He also plans to establish a marketing team that would sell to people who would not normally buy the product. The ultimate mission of the company would be to provide a customer friendly environment. The plan initiated by Sheng can be best categorized as a(n) ________.
a) segmentation analysis
b) functional strategy
c) business unit strategy
d) emergent strategy
b) functional strategy
Thomas is an important figure at Seasons Inc. All of the company’s functions, acquisitions, marketing strategies, and business development plans need to partially receive approval from Thomas. This is due to the fact that Thomas owns 20% of Seasons Inc. In this scenario, Thomas is a ________.
a) stakeholder
b) distributor
c) supplier
d) customer
a) stakeholder
Delivering unique value requires ________.
a) producing more products than rivals
b) investing in a stable firm with a long history of profitability, such as a utility company that supplies power to customers with few choices
c) developing resources and capabilities that allow a company to perform activities better than competitors
d) improving employee satisfaction
c) developing resources and capabilities that allow a company to perform activities better than competitors
Which of the following statements is true of the resource-based view of a firm?
a) It analyzes the factors that influence an organization’s appeal and environment.
b) It was developed to make an inventory of the resources available in a company.
c) It was developed to explain why some firms outperform other firms in the same industry.
d) It examines the efficiency of employees through standardized tests and group discussions.
c) It was developed to explain why some firms outperform other firms in the same industry.
The final step in a strategic management process is to ________.
a) analyze customer needs and preferences
b) formalize a company’s mission statement
c) find strategy vehicles that help a firm enter attractive markets
d) implement the strategy chosen during the strategy formulation process
d) implement the strategy chosen during the strategy formulation process
Which of the following statements is true of the strategies of successful companies?
a) They are partly established by the owners of the company.
b) They are partly deliberate and partly emergent.
c) They are solely a result of obtaining ideas from within the firm.
d) They are wholly deliberate due to effective strategic planning processes.
b) They are partly deliberate and partly emergent.
A company’s primary purpose that often specifies the business or businesses in which the firm intends to compete—or the customers it intends to serve—refers to its ______________.
mission
