Question 1

Once a generic strategy has been selected there is no need for future consideration of what strategy a firm should follow.

Accepted Answer

Generic strategies are not fixed and can require adjustment or revision over time based on changes in the industry, competition, or the firm's internal capabilities and resources. A firm should regularly evaluate and adjust its strategy to ensure it remains effective in achieving its goals.

Question 2

Michael Porter identified five possible generic strategies.

Accepted Answer

Michael Porter identified three generic strategies: cost leadership, differentiation, and focus.

Question 3

An important issue with a differentiation strategy is that qualitative differences between the firm that uses differentiation and the low-cost producer may not be enough to sustain sales.

Accepted Answer

While a differentiation strategy may set a firm apart from low-cost producers, it is possible that the perceived qualitative differences may not be enough to maintain sustained sales. The firm must constantly innovate and improve its products or services to stay ahead of competitors and retain customers.

Question 4

The only thing a firm needs to do in order to succeed is focus on customer value.

Accepted Answer

While focusing on customer value is important for a firm's success, it is not the only thing they need to do. Other factors such as strategic planning, efficient operations, and effective marketing also play a crucial role in a firm's success.

Question 5

One has only to build a business plan at the start of the business. This will guide the company for the foreseeable future.

Accepted Answer

While it is important to have a business plan, it should not be considered a one-time task. A business plan should be periodically revisited and adapted as the business evolves and external factors change.

Question 6

Research has found that there is little formal planning in firms with less than 5 employees.

Accepted Answer

Research has shown that small firms with less than 5 employees tend to have limited resources and may not prioritize formal planning. They may rely more on informal communication and decision-making.

Question 7

Strategic planning and strategic management is the same thing.

Accepted Answer

While strategic planning is a component of strategic management, strategic management encompasses a larger process of ongoing analysis, planning, implementation, and evaluation of an organization's objectives and strategies.

Question 8

A firm that pursues a Cost leadership strategy is one that always will have the lowest price in an industry.

Accepted Answer

A firm pursuing a cost leadership strategy aims to have the lowest cost of production within an industry, which can allow them to offer competitive prices to consumers. However, they may not always have the absolute lowest price, as there may be other firms that are able to offer lower prices due to factors such as economies of scale or unique cost-saving measures.

Question 9

Strategic planning is seen as a series of techniques and tools enable organizations to be able to achieve their specific goals about objectives.

Accepted Answer

This statement accurately describes the purpose of strategic planning.

Question 10

The two major reasons for developing a comprehensive business plan is that the plan will be used to in operating the business and it's useful for securing external funds from the bank, a venture capitalist or other investments.

Accepted Answer

A comprehensive business plan can be used as a guide for operating the business, setting goals, and making strategic decisions. It can also be presented to potential investors or lenders to secure external funds for the business.

Question 11

IKEA would be an example of a firm using a focus-low cost strategy.

Accepted Answer

IKEA is a well-known example of a company that uses a focus-low cost strategy. They offer a wide range of home furnishings at low prices, which has made them a popular choice for budget-conscious consumers.

Question 12

An important issue with a cost-leadership strategy is that imitators narrow perceived differences.

Accepted Answer

The answer of An important issue with a cost-leadership strategy...

Question 13

Strategic thinking is the creative analysis of the competitive landscape and a deep understanding of customer value.

Accepted Answer

Strategic thinking involves analyzing the competitive landscape to identify opportunities and threats, and understanding customers' needs and preferences to create value for them.

Question 14

There are many good reasons for a startup company to build a business plan.

Accepted Answer

Building a business plan helps a startup company to define their goals, identify their target audience, plan their finances, and develop a strategy for growth. It also helps to attract investors and communicate the company's vision to stakeholders.

Question 15

There is a great deal of consensus on the exact meaning of the word strategy.

Accepted Answer

While there is agreement that strategy involves a plan of action, there are different interpretations and approaches to developing and implementing strategy, leading to some variance in its precise meaning.

Question 16

The overwhelming consensus is that of business planning is not essential for small business.

Accepted Answer

While some small businesses may not see the need for a formal business plan, it is generally considered important for outlining goals, strategies, and financial projections, as well as securing financing and establishing a roadmap for success.

Question 17

Identifying what constitutes customer value is of critical importance to a business.

Accepted Answer

Identifying what customers perceive as valuable helps businesses to better meet their needs and preferences, and ultimately increase customer satisfaction and loyalty.

Question 18

The large resources available to Fortune 500 firms mean that they will always be able to defeat, competitively, small and midsize businesses.

Accepted Answer

While Fortune 500 firms do have significant resources, small and midsize businesses can still compete by leveraging their agility, innovation, and niche markets. In addition, there have been numerous examples of smaller businesses disrupting larger ones through creative approaches and technology advancements.

Question 19

An important issue with a focus-differentiation strategy is that competitors may find even smaller markets to focus on.

Accepted Answer

This is true because as the main company focuses on a specific market, competitors may find even more niche markets to target, potentially decreasing the effectiveness of the focus differentiation strategy.

Question 20

Some of the reasons that small business owners do not engaging in developing a formal business plan are: they don't need to plan; they are too busy to plan; plans do not produce results and they're not familiar with the process of formal planning.

Accepted Answer

The answer of Some of the reasons that small business...

Quiz 5: The Business Plan