STRAMAN FINALS

Question 1

The process of creating a competitive advantage by designing goods or services to customer needs.

Answer 1

Product Differentiation

Question 2

The plan of action strategic managers adopt to use a company’s resources and distinctive competencies to gain a competitive advantage.

Answer 2

Business-Level Strategy

Question 3

The way a company decides to group customers based on important differences in their needs or preferences, to gain a competitive advantage.

Answer 3

Market Segmentation

Question 4

Desires, wants, or cravings that can be satisfied by means of the characteristics of a product or service.

Answer 4

Customer Needs

Question 5

A strategy of trying to outperform competitors by doing everything possible to produce goods or services at a cost lower than they do

Answer 5

Cost- Leadership Strategy

Question 6

A strategy that focuses on increasing profi tability by reaping the cost reductions derived from economies of scale and location economies

Answer 6

Global Standardization Strategy

Question 7

A strategy that focuses on increasing profi by customizing the company’s goods or services so that provide a good match to tastes and preferences in different national markets.

Answer 7

Localization Strategy

Question 8

Economic benefits that arise from performing a value creation activity in the optimal location for that activity

Answer 8

Location Economies

Question 9

A strategy in which firms try to simultaneously achieve low costs, differentiate the product offering across geographic markets, and foster a flow of skills among different subsidiaries in the company’s global network of operations.

Answer 9

Transnational Strategy

Question 10

A company’s use of capital such as stock, debt, or cash to purchase another company

Answer 10

Acquisition

Question 11

Acquiring or merging with industry competitors to achieve the competitive that come with large size.

Answer 11

Horizontal Integration

Question 12

The strategy a company adopts when it focuses its resources and capabilities on competing successfully within a particular product market

Answer 12

Concentration on a Single Industry

Question 13

The strategy of offering customers the opportunity to buy a complete range of products at a single, combined price

Answer 13

Product Bundling

Question 14

An agreement between two companies to pool their operations and create a new business entity

Answer 14

Merger

Question 15

A process whereby, in their effort boost company performance, managers focus not the company’s functional activities but on the business processes underlying its value creation operations.

Answer 15

Reengineering

Question 16

The movement of a company away from its present state toward some desired future state to increase its competitive advantage and profitability

Answer 16

Strategic Change

Question 17

A cooperative agreement between two or more companies to work together and share resources to achieve a common business objective.

Answer 17

Strategic Alliance

Question 18

Any business activity, such as order inventory control, or product design, that is vital to goods and services to customers quickly or that promotes high quality or costs

Answer 18

Business Process

Question 19

A company’s creation of the value chain functions necessary to start a new business from scratch.

Answer 19

Internal New Venture

Question 20

The process through which managers select the combination of organizational structure and control systems that they believe will enable the company to create and sustain competitive advantage. a

Answer 20

Organizational Design

Question 21

The process by which strategic managers choose how to distribute decisionmaking authority over value creation activities in an organization

Answer 21

Vertical Differentiation

Question 22

The process by which strategic managers choose how to divide people and tasks into functions and divisions to increase their ability to create value.

Answer 22

Horizontal Differentiation

Question 23

The principle that managers should choose a hierarchy with the minimum number of levels of authority necessary to achieve its strategy

Answer 23

Principle of the Minimum Chain of Command

Question 24

The way in which a company allocates people resources to organizational tasks and divides them into functions and divisions so as to create value.

Answer 24

Differentiation

Question 25

The process by which strategic managers choose how to distribute decisionmaking authority over value creation activities in an organization

Answer 25

Vertical Differentiation

Question 26

fate of a company whose strategy fails because it has made product/market. choices in a way that does not lead to a sustained competitive advantage.

Answer 26

Stuck in the Middle

Question 27

The process by which companies increase or decrease product prices to convey their competitive intentions to other companies.

Answer 27

Price Signaling

Question 28

• The process by which one company informally takes the responsibility for setting industry prices.

Answer 28

Price Leadership

Question 29

• A strategy in which a company concentrates on expanding market share in its existing product. markets.

Answer 29

Market Penetration

Question 30

• A strategy of serving the needs of one or a few customer groups or segments.

Answer 30

Focus Strategy

Question 31

• A strategy involving a search for new market segments, and therefore new uses, for a company’s products.

Answer 31

Market Development

Question 32

A strategy of trying to achieve a competitive advantage by creating a product that is perceived by customers as unique in some important way.

Answer 32

Differentiation Strategy

Question 33

• A company that offers a product designed for each market niche.

Answer 33

Broad Differentiator

Question 34

A strategy involving the constant creation of new or improved products to replace existing ones.

Answer 34

Product Development

Question 35

• A strategy in which a company sells off its business assets and resources to other companies.

Answer 35

Divestment Strategy

Question 36

A strategy that optimizes cash flow.

Answer 36

Harvest Strategy -

Question 37

• The strategy of focusing on pockets of demand that are declining more slowly than demand in the industry as a whole.

Answer 37

Niche Strategy

Question 38

A strategy through which a company seeks to become the dominant player in a declining industry.

Answer 38

Leadership Strategy

Question 39

A strategy in which leading companies in an industry all make a product in each market segment or niche and compete head-to-head for customers.

Answer 39

Product Proliferation

Question 40

A strategy in which firms try centralize product development functions such as R&D at home but establish manufacturing and marketing functions in each major country or geographic region in they business.

Answer 40

International Strategy -

Question 41

A specialized form of licensing in which the franchiser sells the franchisee intangible property (normally a trademark) and insists that the franchisee

Answer 41

Franchising -

Question 42

• An arrangement whereby a foreign licensee buys the rights to produce a company’s product in the licensee’s country for a negotiated fee..

Answer 42

International Licensing

Question 43

• A separate corporate entity in which two or more companies have an ownership stake.

Answer 43

Joint Venture

Question 44

A subsidiary where the parent company owns 100% of the stock.

Answer 44

Wholly Owned Subsidiary -