Question 1

Which of the following is not a primary focus of a company's strategy?
A) How to attract and please customers
B) How each functional piece of the business will be operated
C) How to achieve above-average gains in the company's stock price and thereby meet or beat shareholder expectations
D) How to compete successfully
E) How to grow the business

Accepted Answer

While achieving above-average gains in the company's stock price is an important goal, it is not the primary focus of a company's strategy. The primary focus is on how to attract and please customers, how to compete successfully, how to grow the business, and how each functional piece of the business will be operated.

Question 2

Which of the following is not something a company's strategy is concerned with?
A) Management's choices about how to attract and please customers
B) How quickly and closely to copy the strategies being used by successful rival companies
C) Management's choices about how to grow the business
D) Management's choices about how to compete successfully
E) Management's action plan for conducting operations and improving the company's financial and market performance

Accepted Answer

A company's strategy is not concerned with blindly copying the strategies of successful rival companies. Rather, it involves making deliberate choices about how to attract and please customers, how to grow the business, how to compete successfully, and how to improve the company's financial and market performance through a well-defined action plan for conducting operations.

Question 3

A company's strategy stands a better chance of succeeding when
A) it is developed through a collaborative process involving managers from all levels of the organization.
B) managers employ conservative strategic moves.
C) it is predicated on competitive moves aimed at appealing to buyers in ways that set the company apart from rivals.
D) managers copy the strategic moves of successful companies in its industry.
E) managers focus on meeting or beating shareholder expectations.

Accepted Answer

A company's strategy is more likely to succeed when it differentiates itself from competitors by appealing to buyers in unique ways, which can create a competitive advantage.

Question 4

A company's strategy and its quest for competitive advantage are tightly connected because
A) without a competitive advantage a company cannot become the industry leader.
B) without a competitive advantage a company cannot have a profitable business model.
C) crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance.
D) a competitive advantage is what enables a company to achieve its strategic objectives.
E) how a company goes about trying to please customers and outcompete rivals is what enables senior managers choose an appropriate strategic vision for the company.

Accepted Answer

A company's strategy is intended to establish a unique position in the market, while a competitive advantage is what enables a company to achieve above-average profitability and financial performance. Therefore, crafting a strategy that yields a competitive advantage over rivals is a company's most reliable means of achieving above-average profitability and financial performance.

Question 5

In crafting a strategy,management is in effect saying
A) "this is who we are and where we are headed.''
B) "this is our model for making money in our particular line of business."
C) "we intend to launch these new moves to outcompete our rivals."
D) "among all the many different business approaches and ways of competing we could have chosen, we have decided to employ this particular combination of competitive and operating approaches in moving the company in the intended direction, strengthening its market position and competitiveness, and boosting performance."
E) "this is our vision of what our business will be like, what products/services we will sell, and who our customers will be in the years to come."

Accepted Answer

Crafting a strategy involves making specific choices about how to compete and operate the company in order to achieve the intended goals. This choice will involve selecting specific approaches to strengthen the company's market position and competitiveness while enhancing performance.

Question 6

A company's strategy is most accurately defined as
A) management's approaches to building revenues, controlling costs and generating an attractive profit.
B) the choices management has made regarding what financial plan to pursue.
C) management's concept of "who we are, what we do, and where we are headed."
D) the business model that a company's board of directors has approved for outcompeting rivals and making the company profitable.
E) management's commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, conducting operations, and improving the company's financial and market performance.

Accepted Answer

A company's strategy is more than just its financial plan or business model. It encompasses the company's overall direction, purpose, and actions taken to achieve its goals. Therefore, the most accurate definition is management's commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, conducting operations, and improving the company's financial and market performance.

Question 7

A company achieves sustainable competitive advantage when
A) an attractive number of buyers have a lasting preference for its products or services as compared to the offerings of competitors.
B) it has a profitable business model.
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.

Accepted Answer

Sustainable competitive advantage means that a company has a lasting advantage over its competitors. This is achieved when an attractive number of buyers have a lasting preference for its products or services as compared to those of its competitors. This lasting preference reflects a strong brand, superior quality, efficient operations, and superior customer service. A company's long-term survival and profitability depend on its ability to maintain this advantage. Therefore, option A is the best choice.

Question 8

What separates a powerful strategy from a run-of-the-mill or ineffective one is
A) the ability of the strategy to keep the company profitable.
B) the proven ability of the strategy to generate maximum profits.
C) the speed with which it helps the company achieve its strategic vision.
D) management's ability to forge a series of moves, both in the marketplace and internally, that sets the company apart from rivals, tilts the playing field in the company's favor, and produces sustainable competitive advantage over rivals.
E) whether it allows the company to maximize shareholder value in the shortest possible time.

Accepted Answer

The most important factor that separates a powerful strategy from an ineffective one is management's ability to design a strategic plan that creates sustainable competitive advantage by setting the company apart from rivals and tilting the playing field in the company's favor. A successful strategy must be effective in the marketplace and internally by producing long-term results that lead to profitability. Option A and E can be a part of a successful strategy, but they are not the primary factor. Option B might be suitable for a short-term strategy, but it is not an effective long-term strategy. Option C can also be important, but it is not the most critical factor in a powerful strategy. Therefore, option D is the best choice.

Question 9

Winning a competitive edge over competitors generally hinges on which of the following?
A) Having a competitive product offering.
B) Building valuable expertise and capabilities not readily matched and offering a distinctive product.
C) Building experience, know-how, and specialized capabilities that have been perfected over a long period of time.
D) Having "hard to beat" capabilities and impressive product innovation.
E) All of these.

Accepted Answer

Winning a competitive edge over competitors can be achieved through a combination of having a competitive product offering, building valuable expertise and capabilities that are not easily matched, perfecting specialized capabilities over time, and having strong product innovation. Therefore, all of the options mentioned in the question are important for gaining a competitive edge, making option E the correct answer.

Question 10

A company's strategy evolves over time as a consequence of
A) the need to keep strategy in step with changing market conditions and changing customer needs and expectations.
B) the proactive efforts of company managers to fine-tune and improve one or more pieces of the strategy.
C) the need to abandon some strategy features that are no longer working well.
D) the need to respond to the newly-initiated actions and competitive moves of rival firms.
E) All of these.

Accepted Answer

All of the options listed are factors that contribute to the evolution of a company's strategy over time. The need to stay in step with changing market conditions, customer needs and expectations requires ongoing assessment and adjustment of the company's strategy. Proactive efforts to fine-tune and improve the strategy are necessary to maintain competitiveness and take advantage of opportunities. Abandoning some strategy features that are no longer effective plays a role in evolving the strategy to better align with the company's goals. And responding to the actions of rival firms is also an important factor in adjusting a company's strategy to stay competitive. All of these factors work together to shape a company's overall strategy over time.

Question 11

In crafting a company's strategy,
A) management's biggest challenge is how closely to mimic the strategies of successful companies in the industry.
B) managers have comparatively little freedom in choosing the "hows" of strategy.
C) managers are wise not to decide on concrete courses of action in order to preserve maximum strategic flexibility.
D) managers need to come up with some distinctive "aha" element to the strategy that draws in customers and produces a competitive edge over rivals.
E) managers are well-advised to be risk-averse and develop a "conservative" strategy-"dare-to-be-different" strategies rarely are successful.

Accepted Answer

The correct answer is D because the statement suggests that managers need to come up with a distinctive "aha" element to the strategy that draws in customers and produces a competitive edge over rivals, which aligns with the concept of creating a unique value proposition to differentiate a company from competitors. Option A is incorrect because copying successful strategies without considering the company's unique situation may not lead to success. Option B is incorrect because managers have a high degree of freedom in choosing the "hows" of strategy. Option C is incorrect because deciding on concrete courses of action is necessary to create a focused strategy. Option E is incorrect because being too risk-averse may lead to a conservative strategy that does not create a competitive advantage.

Question 12

The heart and soul of a company's strategy-making effort
A) is figuring out how to become the industry's low-cost provider.
B) is figuring out how to maximize the profits and shareholder value.
C) concerns how to improve the efficiency of its business model.
D) deals with how management plans to maximize profits while, at the same time, operating in a socially responsible manner that keeps the company's prices as low as possible.
E) involves coming up with moves and actions that produce a durable competitive edge over rivals.

Accepted Answer

The heart and soul of a company's strategy-making effort is all about coming up with moves and actions that produce a durable competitive edge over rivals. This means figuring out how to differentiate themselves from competitors in a way that will be difficult to replicate, and ultimately create lasting value for the company. While improving efficiency, maximizing profits, and operating in a socially responsible manner may be important aspects of a company's strategy, they are not the central focus. Becoming the industry's low-cost provider may also be a potential strategy, but this is just one possible approach and may not be the best fit for every company.

Question 13

Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?
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, technological superiority, or unusually good value for the money
C) Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins
D) Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of satisfying the needs and tastes of buyers comprising the niche
E) Developing expertise and resource strengths that give the company competitive capabilities that rivals can't easily imitate or trump with capabilities of their own

Accepted Answer

Striving to be more profitable than rivals is not a strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage, but rather a goal that can be achieved through the implementation of various strategies such as cost leadership, differentiation, or focused differentiation. The other options listed are all frequently used strategic approaches to achieving a sustainable competitive advantage.

Question 14

A company's strategy concerns
A) its market focus and plans for offering a more appealing product than rivals.
B) how it plans to make money in its chosen business.
C) management's action plan for running the business and conducting operations-its commitment to pursue a particular set of actions in growing the business, staking out a market position, attracting and pleasing customers, competing successfully, conducting operations, and achieving targeted objectives.
D) the long-term direction that management believes the company should pursue.
E) whether it is employing an aggressive offense to gain market share or a conservative defense to protect its market position.

Accepted Answer

A company's strategy involves its management's action plan for running the business and achieving targeted objectives. It includes the commitment to pursue a particular set of actions, staking out a market position, attracting and pleasing customers, competing successfully, and conducting operations. While market focus and plans for offering a more appealing product than rivals, making money, long-term direction, and offensive or defensive measures are all important aspects of a company's strategy, they do not encompass the entirety of it.

Question 15

A creative,distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage
A) is a reliable indicator that the company has a profitable business model.
B) is every company's strategic vision.
C) is a company's most reliable ticket to above-average profitability-indeed, the tight connection between competitive advantage and profitability means that the quest for sustainable competitive advantage always ranks center stage in crafting a strategy.
D) signals that the company has a bold, ambitious strategic intent that places the achievement of strategic objectives ahead of the achievement of financial objectives.
E) is the best indicator that the company's strategy and business model are well-matched and properly synchronized.

Accepted Answer

The text explicitly states that a creative, distinctive strategy gives a company a sustainable competitive advantage, which in turn is closely linked to above-average profitability. Therefore, C is the best choice. A, B, D, and E are all incorrect or unrelated to the text.

Question 16

The competitive moves and business approaches a company's management is using to grow the business,stake out a market position,attract and please customers,compete successfully,conduct operations,and achieve organizational objectives is referred to as its
A) strategy.
B) mission statement.
C) strategic intent.
D) business model.
E) strategic vision.

Accepted Answer

The definition provided in the question perfectly aligns with the concept of strategy. Mission statement, strategic intent, and strategic vision are related concepts but do not fully encompass all the elements mentioned in the definition. Business model refers to the way a company generates revenue and may not necessarily include all the elements mentioned in the definition.

Question 17

One of the keys to successful strategy-making is
A) to come up with one or more strategy elements that act as a magnet to draw customers and yield a lasting competitive edge.
B) to aggressively pursue all of the growth opportunities the company can identify.
C) to develop a product/service with more innovative performance features than what rivals are offering and to provide customers with better after-the-sale service.
D) to come up with a business model that enables a company to earn bigger profits per unit sold than rivals.
E) to charge a lower price than rivals and thereby win sales and market share away from rivals.

Accepted Answer

Coming up with a unique and effective strategy element can differentiate a company from its competitors and attract customers. This approach focuses on creating a lasting competitive advantage rather than simply chasing growth opportunities or relying on pricing tactics.

Question 18

Which of the following is a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?
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, technological superiority, or unusually good value for the money
C) Developing expertise and resource strengths that give the company competitive capabilities that rivals can't easily imitate 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) All of these

Accepted Answer

All of the listed choices are frequently used strategic approaches to setting a company apart from rivals and achieving a sustainable competitive advantage. Companies may choose to pursue one or more of these approaches depending on their resources, market position, and overall strategy.

Question 19

A company's strategy consists of
A) the competitive moves and business approaches that managers are employing to grow the business, stake out a market position, attract and please customers, compete successfully, conduct operations, and achieve targeted objectives.
B) the plans it has to outcompete rivals and establish a sustainable competitive advantage.
C) the offensive moves it is employing to make its product offering more distinctive and appealing to buyers.
D) the actions it is taking to develop a more appealing business model than rivals.
E) its strategic vision, its strategic objectives, and its strategic intent.

Accepted Answer

A company's strategy encompasses all of the activities and approaches that managers use to grow the business, establish a market position, attract and please customers, compete effectively, conduct operations, and achieve objectives. This includes competitive moves, business approaches, and tactics deployed to achieve the company's goals. B, C, D, and E are all components of a company's strategy, but they do not fully capture the breadth of activities that managers undertake when developing and implementing a strategic plan.

Question 20

Which of the following is not one of the central questions in evaluating a company's business prospects?
A) What is the company's present situation?
B) What are the key products or service attributes demanded by consumers?
C) Where does the company need to go from here?
D) How should it get there?
E) All of these are pertinent in evaluating a company's business prospects.

Accepted Answer

The key products or service attributes demanded by consumers is more about market analysis rather than evaluating a company's business prospects, which focuses on the company's current situation, future direction, and strategy to achieve its goals.

Quiz 1: What Is Strategy and Why Is It Important

Which of the following is not a primary focus of a company's strategy?

Which of the following is not something a company's strategy is concerned with?

A company's strategy stands a better chance of succeeding when

A company's strategy and its quest for competitive advantage are tightly connected because

In crafting a strategy,management is in effect saying

A company's strategy is most accurately defined as

A company achieves sustainable competitive advantage when

What separates a powerful strategy from a run-of-the-mill or ineffective one is

Winning a competitive edge over competitors generally hinges on which of the following?

A company's strategy evolves over time as a consequence of

In crafting a company's strategy,

The heart and soul of a company's strategy-making effort

Which of the following is not a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

A company's strategy concerns

A creative,distinctive strategy that sets a company apart from rivals and that gives it a sustainable competitive advantage

The competitive moves and business approaches a company's management is using to grow the business,stake out a market position,attract and please customers,compete successfully,conduct operations,and achieve organizational objectives is referred to as its

One of the keys to successful strategy-making is

Which of the following is a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage?

A company's strategy consists of

Which of the following is not one of the central questions in evaluating a company's business prospects?