Deck 1: The Need for Strategy

Question 1

Sirius XM Satellite Radio faces competition from iPods and other MP3 players that did not exist at the time each individual company conceived of a satellite radio service.

Answer 1

True

Question 2

Before the 1970s companies operated in markets that were unstable, rapidly changing, and hypercompetitive.

Answer 2

False

Question 3

The critical need in business to identify and exploit where the market is heading is known as value creation.

Answer 3

False

Question 4

Analysis, formulation, implementation, and synthesis are the four stages typical of the strategic management process.

Question 5

The Blockbuster example shows that a company can reverse an eroding market position by matching the competitive moves of rivals that are using alternative strategies.

Question 6

The value chain offers a systematic way of examining all the activities of a firm and how they interact to find a basis for a competitive advantage.

Question 7

The vignette about Competition in Commercial Aircraft Manufacturing shows how strategic decisions can have long-lasting effects.

Question 8

Metrics comprise only qualitative measures by which a firm can evaluate the effectiveness of its business strategy.

Question 9

Writing 2,500 years ago, Sun Tzu, in The Art of War, codified many of the precepts of strategy that remain important even today.

Question 10

Frederick Taylor, a proponent of time and motion studies and "the science of work" in the early 1900s, shifted the strategic focus of companies from practices designed to eliminate rivals to an internal search for efficiencies and, thus, a competitive advantage based on the firm's own capabilities.

Question 11

Professor Michael Porter moved the study of strategy toward an emphasis on long-range planning, in which the past is extrapolated into the future.

Question 12

Strategic decisions that are both technically legal and highly effective in the market are to be considered ethical without regard to any other considerations.

Question 13

The turbulent period of the 1970s in the U.S. demonstrated a need for companies to adopt anticipatory visions of their futures and a long-term orientation rather than counting on the future being much like the past.

Question 14

A resource-based analysis is the means by which a firm's managers evaluate the capabilities of important rivals.

Question 15

XM Satellite Radio and Sirius Satellite Radio each considered which of the following business models prior to launching their services?

A) Charging subscription fees.
B) Selling advertising.
C) A combination of subscription fees and advertising.
D) All of the above were considered by each firm.

Question 16

Traditional broadcasters argued before the Federal Trade Commission that a merger between Sirius Satellite Radio and XM Satellite Radio would result in

A) a monopoly of the radio broadcasting industry.
B) 100% control of the satellite radio industry by the combined firms.
C) the traditional radio broadcasting industry being rendered unprofitable.
D) the complete destruction of the business model employed by land-based radio broadcasters.

Question 17

The critical need in business to identify and exploit where the market is heading is called

A) opportunity recognition.
B) business forecasting.
C) technological entrepreneurship.
D) value creation.

Question 18

Understanding who a company's customers are going to be, what these customers will value, and how to make money creating and delivering those values are all aspects of the ________ strategic imperative.

A) opportunity recognition
B) vision discovery
C) value creation
D) top management leadership

Question 19

While seemingly a subject of interest mostly to top managers in large corporations, strategy is important to you even at the beginning of a career because

A) interviewers often pose questions that are strategic in nature.
B) the odds are that you will be employed by a small business and have the opportunity to affect its strategy almost immediately.
C) employers nearly always send new recruits to strategic planning retreats shortly after the hiring process has concluded and they have begun work.
D) most university graduates will eventually find themselves in jobs entirely devoted to strategy and the planning process.

Question 20

Which of the following is not one of the four stages of the strategic management process?

A) Analysis
B) Synthesis
C) Formulation
D) Implementation

Question 21

The stage of the strategic management process in which one examines the industry where he or she wishes to compete and looks carefully inside the company to understand its unique competitive strengths and how it organizes its activities is called strategic

A) formulation.
B) evaluation.
C) analysis.
D) implementation.

Question 22

________ describes the stage of the strategic management process in which management articulates its vision and mission, outlines its goals and objectives, and decides upon a strategic approach.

A) Formulation
B) Implementation
C) Synthesis
D) Evaluation

Question 23

That part of the strategic management process in which the expected results of a strategy are compared to the actual results is called

A) synthesis.
B) evaluation.
C) variance reporting.
D) implementation.

Question 24

Which of the following is not one of the five critical questions with which strategy contends?

A) Why are firms different?
B) What is the best business model to ensure profitability?
C) How is strategic effectiveness measured?
D) What is special about strategic decisions?

Question 25

Profits, cash flow and market share are the ________ of an effective strategy.

A) results
B) objectives
C) resources
D) antithesis

Question 26

"A systematic way of examining all the activities a firm performs and how they interact..." describes

A) an internal analysis.
B) the capital budgeting process.
C) the value chain.
D) the resource-based perspective.

Question 27

The vignette about Competition in Commercial Aircraft Manufacturing illustrates what important dimension(s) of strategy?

A) Strategic decisions have long-lasting effects.
B) Early strategic decisions can lead to significant differences between competitors.
C) Boeing's unassailable lead in the industry confronts no serious competition.
D) Both A and B above are illustrated by the vignette.

Question 28

The strategy involved in managing multiple business units under the same corporate banner is known as

A) corporate strategy.
B) business strategy.
C) operational strategy.
D) mergers and acquisitions strategy.

Question 29

The qualitative and quantitative measures used to assess the effectiveness of a business strategy are called

A) bottom line criteria.
B) profitability ratios.
C) market shares.
D) metrics.

Question 30

Many of the foundations of strategic thought can be found in the 2,500-year-old writings of

A) the Old Testament of the Bible.
B) Sun Tzu in The Art of War.
C) Aeschylus in The Oresteian Trilogy.
D) Sophocles in Oedipus the King.

Question 31

One of the earlier instances of companies looking inward for sources of competitive advantage can be seen in the popularity of __________ in the early 1900s.

A) the formation of business trusts
B) Frederick Taylor's "science of work" time and motion studies
C) Max Weber's principles of good management
D) W. Edwards Deming's championing of quality management

Question 32

________ wrote two important books in the 1980s that have dramatically influenced the tools of strategy that are both used by firms and taught by business schools.

A) Jack Welch
B) Warren Buffet
C) Michael Porter
D) Benjamin Graham

Question 33

The senior managers of a firm depend upon those who are ________ for the information necessary to make ethical decisions that contribute to the overall effectiveness of the organization.

A) outsiders with objective viewpoints
B) closer to "the action"
C) in charge of financial reporting
D) specially trained in data preparation and interpretation

Question 34

The "internal analysis" of a company encompasses both an examination of its value chain and a(n) ________.

A) SWOT analysis
B) resource-based analysis
C) financial analysis
D) operational analysis

Question 35

Briefly describe the contributions of Sun Tzu, Frederick Taylor, Alfred Chandler, and Michael Porter to the evolution of strategy as a field of study and practice.