Archive for September 2019

Multiculturalism in an organization results in:

Multiculturalism in an organization results in:



a.opportunities and challenges for managers.
b.bringing outsiders into important managerial positions.
c.more interaction among suppliers, regulators, and consumer groups.
d.homogeneity in the organization.


Answer: a

Identify a true statement about the culture of an organization.

Identify a true statement about the culture of an organization.



a.It is maintained by staging new ceremonies.
b.It can become a weakness in certain cases.
c.It is weak when the management does not change.
d.It starts from the new employees of the organization.


Answer: b

Which of the following statements is true about organization culture?

Which of the following statements is true about organization culture?



a.It does not vary across organizations.
b.It is the foundation of an organization's external environment.
c.It is not influenced by corporate success.
d.It consists of a firm's set of values and beliefs.


Answer: d

Which of the following is likely to be a reason for the weak culture of an organization?

Which of the following is likely to be a reason for the weak culture of an organization?



a.The members of the board of directors belong to multicultural backgrounds.
b.The shareholders of the company are regularly offered bonus shares.
c.The management team has changed rapidly during recent periods.
d.The suppliers of the company are replaced constantly according to the requirements.


Answer: c

Who among the following is an example of a yuppie?

Who among the following is an example of a yuppie?



a.Holly, a lazy employee who does not feel the need to work
b.Savannah, a retiree of a government organization
c.Raj, a middle-aged man who works for a small, local restaurant
d.Jeremy, a recent graduate who works in a multinational company


Answer: d

Which of the following is an advantage of hiring retirees in an organization?

Which of the following is an advantage of hiring retirees in an organization?



a.The organization attains new skill sets.
b.The organization gains employees for permanent projects.
c.The organization does not have to pay retirees any wages.
d.The organization gets the expertise of skilled workers.


Answer: d

Which of the following is a primary advantage of education as a source of management?

Which of the following is a primary advantage of education as a source of management?



a.The curriculum is often very general and caters to the needs of all students.
b.A student does not need to become familiar with current research on management.
c.As a student, a person can follow a well-developed program of study.
d.A student does not need to depend on experience to develop practical skills.


Answer: c

Managers need to take a scientific approach to solving problems especially when:

Managers need to take a scientific approach to solving problems especially when:



a.they are faced with sudden decision-making opportunities.
b.they feel that their employees' emotions affect work.
c.they are dealing with relatively routine and straightforward issues.
d.they encounter situations that require a deep personal understanding.


Answer: c

Valid Inc., a manufacturer of electronic gadgets, sees an unforeseen drop in sales of its latest product, Anytime Videogames. Nathan, the developer of the battery used in Anytime Videogames, discovers that the reason for this is the low battery life of the consoles. In order to increase the battery life of the consoles, which of the following skills must Nathan specifically improve?

Valid Inc., a manufacturer of electronic gadgets, sees an unforeseen drop in sales of its latest product, Anytime Videogames. Nathan, the developer of the battery used in Anytime Videogames, discovers that the reason for this is the low battery life of the consoles. In order to increase the battery life of the consoles, which of the following skills must Nathan specifically improve?



a.Communication skills
b.Technical skills
c.Time-management skills
d.Conceptual skills


Answer: b

Which of the following is a difference between the roles of a disseminator and a spokesperson?

Which of the following is a difference between the roles of a disseminator and a spokesperson?



a.A disseminator's role involves taking visitors to dinner, attending ribbon-cutting ceremonies, and the like, whereas a spokesperson's role involves serving as a coordinator or link among people, groups, or organizations.
b.A disseminator's role involves relaying information to others at a workplace, whereas a spokesperson's role involves relaying information to people outside an organization.
c.A disseminator's role involves deciding how resources are to be distributed, whereas a spokesperson's role involves serving as a voluntary initiator of change.
d.A disseminator's role involves hiring, training, and motivating employees, whereas a spokesperson's role involves taking visitors to dinner, attending ribbon-cutting ceremonies, and the like.


Answer: b

Concrete Constructions, a construction company, wants a suitable site to establish a new residential complex. Site selection is the responsibility of the _____ manager of Concrete Constructions.

Concrete Constructions, a construction company, wants a suitable site to establish a new residential complex. Site selection is the responsibility of the _____ manager of Concrete Constructions.



a.marketing
b.human resource
c.operations
d.financial


Answer: c

Which of the following is true of first-line managers?

Which of the following is true of first-line managers?



a.They set an organization's goals and objectives.
b.They implement the policies and plans developed for an organization.
c.They oversee the day-to-day operations of their team.
d.They officially represent an organization to the external environment.

Answer: c

Kayla is a high-potential worker. However, she is lazy and does not complete her assignments on time. In order to improve Kayla's work output, her boss must monitor her progress on given assignments. In this scenario, Kayla's boss will be performing the managerial function of _____.

Kayla is a high-potential worker. However, she is lazy and does not complete her assignments on time. In order to improve Kayla's work output, her boss must monitor her progress on given assignments. In this scenario, Kayla's boss will be performing the managerial function of _____.



a.organizing
b.planning
c.leading
d.controlling


Answer: d

Aicha, the coach of a women's basketball team, prepares the team's playing strategy for an upcoming basketball tournament. The strategies devised will be successful only if the players are allocated appropriate positions in the team according to their strengths. In this scenario, which of the following managerial functions must Aicha perform to allocate playing positions to the players?

Aicha, the coach of a women's basketball team, prepares the team's playing strategy for an upcoming basketball tournament. The strategies devised will be successful only if the players are allocated appropriate positions in the team according to their strengths. In this scenario, which of the following managerial functions must Aicha perform to allocate playing positions to the players?



a.Leading
b.Organizing
c.Planning
d.Controlling


Answer: b

Which of the following is a benefit of planning?

Which of the following is a benefit of planning?



a.It helps managers understand the relationships among employees.
b.It helps managers track the progress toward set goals.
c.It helps managers recognize their own weaknesses.
d.It helps managers know how to allocate their time and resources.



Answer: d

Rodney, the director of a software company, decides to launch a free-education program for the underprivileged children in his country. He instructs his administrative staff to distribute free textbooks for the underprivileged children using 1% of the company's annual profits based on its annual sales reports. In this scenario, the annual sales reports are categorized as _____ resources.

Rodney, the director of a software company, decides to launch a free-education program for the underprivileged children in his country. He instructs his administrative staff to distribute free textbooks for the underprivileged children using 1% of the company's annual profits based on its annual sales reports. In this scenario, the annual sales reports are categorized as _____ resources.



a.financial
b.information
c.human
d.physical


Answer: b

One obvious ethnic change in the U.S. work culture has been:

One obvious ethnic change in the U.S. work culture has been:



a.the decreasing number of South-Asians in the workplace.
b.the removal of many Asian Americans from executive positions.
c.the dramatic efflux of immigrant workers in the last few years.
d.the increasing number of Hispanics and African Americans in the workplace.


Answer: d

Matthew retired from his job when he turned sixty. Despite finding suitably qualified fresh graduates for a position in a temporary project, Matthew's former company asked him to take up the position. Which of the following is most likely to be a reason as to why the company asked him to fill the position?

Matthew retired from his job when he turned sixty. Despite finding suitably qualified fresh graduates for a position in a temporary project, Matthew's former company asked him to take up the position. Which of the following is most likely to be a reason as to why the company asked him to fill the position?



a.His company had a prejudice against fresh graduates.
b.His company wanted to exploit him.
c.His company wanted to train him in new skills.
d.His company needed his experience and expertise.


Answer: d

The term diversity refers to:

The term diversity refers to:



a.differences among people.
b.the quality or state of being consistent.
c.the quality or state of being regular.
d.similarities among people.


Answer: a

Which of the following is true of managing in a profit-seeking organization?

Which of the following is true of managing in a profit-seeking organization?



a.Effective management is sometimes more important in a small business than in a large one.
b.Management is primarily required for running large businesses.
c.Very little of what we know about management comes from large profit-seeking organizations.
d.Managing small businesses gives a manager very little experience.


Answer: a

Samantha, a manager at a department store, needs to recruit four sales personnel. Following the scientific approach to management, which of the following should Samantha do during the recruitment process?

Samantha, a manager at a department store, needs to recruit four sales personnel. Following the scientific approach to management, which of the following should Samantha do during the recruitment process?



a.She should evaluate the qualifications and experience of prospective candidates.
b.She should follow her intuition after meeting prospective candidates.
c.She should reject candidates who come from certain ethnicities.
d.She should select candidates based on her previous experiences of working with people.


Answer: a

Runnington Bakery needs to decide on its icing sugar supplier. Rita, the store manager, meets with a potential supplier and discusses the rates for the icing sugar. In this scenario, Rita plays the role of a _____.

Runnington Bakery needs to decide on its icing sugar supplier. Rita, the store manager, meets with a potential supplier and discusses the rates for the icing sugar. In this scenario, Rita plays the role of a _____.



a.negotiator
b.disseminator
c.resource allocator
d.figurehead


Answer: a

Which of the following is a difference between the roles of a figurehead and a spokesperson?

Which of the following is a difference between the roles of a figurehead and a spokesperson?



a.A spokesperson's role involves deciding how resources are to be distributed, whereas a figurehead's role involves serving as a voluntary initiator of change.
b.A figurehead's role involves primarily serving as a symbol of an organization, whereas a spokesperson's role involves carrying substantive information and communicating it to others in a formal manner.
c.A figurehead's role involves negotiating with other groups, whereas a spokesperson's role involves handling problems such as strikes and copyright infringements.
d.A spokesperson's role involves handling problems such as strikes and copyright infringements, whereas a figurehead's role involves communicating substantive information to others in a formal manner.


Answer: b

The interpersonal managerial role of a liaison involves:

The interpersonal managerial role of a liaison involves:



a.serving as a coordinator or link among people, groups, or organizations.
b.handling problems such as strikes, copyright infringements, or problems in public relations.
c.hiring, training, and motivating employees.
d.deciding how resources are to be distributed.


Answer: a

Shaun is a store manager at Body Wonder, an international salon and spa. He schedules appointments for clients and communicates their requirements to the hair stylists and masseuses. He prepares daily reports and submits them to the Area Manager. To which of the following levels of management does Shaun belong?

Shaun is a store manager at Body Wonder, an international salon and spa. He schedules appointments for clients and communicates their requirements to the hair stylists and masseuses. He prepares daily reports and submits them to the Area Manager. To which of the following levels of management does Shaun belong?



a.Top management
b.Middle management
c.First-line management
d.Tactical management


Answer: c

Which of the following is a function of top managers?

Which of the following is a function of top managers?



a.They supervise and coordinate the activities of operating employees.
b.They create an organization's goals, overall strategy, and operating policies.
c.They implement the policies and plans developed for an organization.
d.They handle routine administrative duties required for an organization to run smoothly.


Answer: b

Erica, a recruitment manager at a consulting firm, notices a trend in the firm where hired employees tend to resign before the completion of their probation period. In order to remedy the situation, Erica sets a goal to increase the number of employees staying with the firm after their probation is completed. She maps out behavior patterns among employees and strategizes accordingly. By doing so, Erica is exercising the managerial function of _____.

Erica, a recruitment manager at a consulting firm, notices a trend in the firm where hired employees tend to resign before the completion of their probation period. In order to remedy the situation, Erica sets a goal to increase the number of employees staying with the firm after their probation is completed. She maps out behavior patterns among employees and strategizes accordingly. By doing so, Erica is exercising the managerial function of _____.



a.leading
b.planning
c.controlling
d.organizing


Answer: b

Which of the following best defines planning?

Which of the following best defines planning?



a.It involves monitoring an organization's progress toward its goals.
b.It involves determining how activities and resources are to be grouped.
c.It involves getting members of an organization to work together.
d.It involves setting an organization's goals and deciding how best to achieve them.


Answer: d

Seth, a manager of a handicraft store, notices a decline in the quality of products created by the store's artists. He finds that the artists have been showing a lack of interest in their work. In order to remedy this situation, Seth must pay keen attention to the _____ resources of the store.

Seth, a manager of a handicraft store, notices a decline in the quality of products created by the store's artists. He finds that the artists have been showing a lack of interest in their work. In order to remedy this situation, Seth must pay keen attention to the _____ resources of the store.



a.human
b.financial
c.physical
d.information


Answer: a

An organization is defined as:

An organization is defined as:



a.a process in which change is initiated in response to some known external threat or opportunity.
b.a set of activities directed at a company's resources with the aim of achieving organizational goals.
c.a group of people working together in a structured and coordinated fashion to achieve a set of goals.
d.a series of plans and approaches to implement change efforts.


Answer: c

Which of the following is a characteristic of a good controller?

Which of the following is a characteristic of a good controller?



A) Handling conflict in nonthreatening, constructive ways
B) Putting plans in writing so others can know exactly what they are
C) Anticipating possible negative reactions and taking action to minimize them
D) Having a clear sense of the priorities necessary to accomplish the task


Answer: C) Anticipating possible negative reactions and taking action to minimize them

Which of the following is a trait that is shared by managers who are adept in the organizing function?

Which of the following is a trait that is shared by managers who are adept in the organizing function?



A) Coordinating with others to assure steady progress on the task
B) Comparing progress with plans and taking corrective action as warranted
C) Preparing an agenda for meetings
D) Understanding the needs of others and encouraging their initiative in meeting whose needs


Answer: A) Coordinating with others to assure steady progress on the task

Why must an organization's IT architecture be based on an organization's strategic goals?

Why must an organization's IT architecture be based on an organization's strategic goals?




  • Strategy -> Goals -> Requirements -> Architecture Requirements -> Infrastructure 
  • Detailed business requirements are derived from each goal. 
  • The manager can provide the architect with a clear picture of what IS must accomplish and the governance arrangements needed to ensure their smooth development, implementation, and use 
  • The plan helps determine where to put different aspects of the building 




Answer: Strategy is the broadest -----> Infrastructure most specific

An example of when a software-defined architecture is most appropriate:

An example of when a software-defined architecture is most appropriate:



a) A firm can't make the decision and wants software to do it
b) Resources need to be re-allocated dynamically depending on the situation or time of day
c) Sales are expected to be very high
d) Sales are expected to be very low
e) BYOD is discouraged in a firm


Answer: Resources need to be re-allocated dynamically depending on the situation or time of day

A legacy system is all of the following, except:

A legacy system is all of the following, except:



a) Usually found on a mainframe
b) A system that is already in place, from the past
c) A system that often holds the middle tier of a multiple-tier system.
d) Old systems that often require hard-to-use command languages
e) Systems that most often have detailed information that can be accessed by a system at a higher tier.


Answer: A system that often holds the middle tier of a multiple-tier system.

Using a cloud service from Amazon.com, the New York Times was able to

Using a cloud service from Amazon.com, the New York Times was able to



a) Establish a strong social media presence.
b) Virtualize its mobile application.
c) Quickly digitize old articles without needing to purchase additional infrastructure components.
d) Build a web-based application to search past articles for keywords
e) Standardize its virtualization infrastructure.


Answer: Quickly digitize old articles without needing to purchase additional infrastructure components.

All of the following are reasons why a company may choose to use cloud computing for its IT infrastructure EXCEPT:

All of the following are reasons why a company may choose to use cloud computing for its IT infrastructure EXCEPT:



a) Cost savings
b) Speed to provision additional capacity
c) Reduce dependency on third-party suppliers
d) Consolidation of servers and even the elimination of a data center
e) Reduce server maintenance costs


Answer: Reduce dependency on third-party suppliers

Risks associated with cloud computing include all of the following EXCEPT:

Risks associated with cloud computing include all of the following EXCEPT: 



a) Increased dependency on third-party suppliers
b) Security
c) Lack of standards for virtual infrastructures
d) Retooling existing applications to move to the cloud
e) Scalability


Answer: Scalability

A small company in Des Moines wants to set up an IT infrastructure for its workforce. The company recently moved to an older building that has solid walls and ceilings. Furthermore, most of the staff likes the flexibility of moving around the open office space to perform work on their laptops. Which communication infrastructure makes most sense for this company?

A small company in Des Moines wants to set up an IT infrastructure for its workforce. The company recently moved to an older building that has solid walls and ceilings. Furthermore, most of the staff likes the flexibility of moving around the open office space to perform work on their laptops. Which communication infrastructure makes most sense for this company?



a) Mainframe
b) Web-services
c) Peer-to-peer
d) Wireless
e) Server-to-server


Answer: Wireless

Marketing has repeatedly asked the IT department about the possibility of aligning the new marketing plan with the company's web site. They would like the new web site to be able to support more active content and permit customers to query an online catalog. You let them know that this is currently being considered and that you're determining if this new business strategy can be translated into a viable plan of action. This would be part of which of the following?

Marketing has repeatedly asked the IT department about the possibility of aligning the new marketing plan with the company's web site. They would like the new web site to be able to support more active content and permit customers to query an online catalog. You let them know that this is currently being considered and that you're determining if this new business strategy can be translated into a viable plan of action. This would be part of which of the following?



a) IT architecture
b) IT infrastructure
c) System architecture
d) Server upgrade program
e) IT strategy


Answer: IT architecture

Mary from sales is asking about the plan to implement Salesforce.com's application. You explain to her that you are in the process of getting technical specifications and pricing so that you can move forward with the rollout. This would be part of which of the following plans?

Mary from sales is asking about the plan to implement Salesforce.com's application. You explain to her that you are in the process of getting technical specifications and pricing so that you can move forward with the rollout. This would be part of which of the following plans?



a) IT architecture
b) IT infrastructure
c) System architecture
d) Server upgrade program
e) IT strategy


Answer: IT infrastructure

The IT infrastructure components should be evaluated based on their expected financial value. All of the following are used to quantify the financial value of IT components EXCEPT for the:

The IT infrastructure components should be evaluated based on their expected financial value. All of the following are used to quantify the financial value of IT components EXCEPT for the:



a) Usability
b) Risks
c) Benefits
d) Costs
e) Maintenance


Answer: Usability

Which of the following best describes cloud computing?

Which of the following best describes cloud computing?



a) Virtual desktop computing
b) Lightweight software that takes up little storage space
c) Computing services that can be accessed on demand across the Internet
d) The World Wide Web
e) Mobile-based social IT


Answer: Computing services that can be accessed on demand across the Internet

A manager must know enough about the IT architecture and IT infrastructure so that he or she can:

A manager must know enough about the IT architecture and IT infrastructure so that he or she can:



a) Select the correct wireless provider.
b) Make realistic use of IT and know what to expect from IT.
c) Choose the appropriate IT infrastructure components.
d) Limit future business options.
e) Ensure a rigid IT structure.


Answer: Make realistic use of IT and know what to expect from IT.

The architecture that the large paper company Mohawk adopted enables the company to scale technology services up and down instantaneously according to its needs. The architecture is called:

The architecture that the large paper company Mohawk adopted enables the company to scale technology services up and down instantaneously according to its needs. The architecture is called:



a) Centralized
b) Decentralized
c) Service-oriented
d) Internet-based
e) Mainframe


Answer: Service-oriented

Mohawk's need for flexibility required a change to its IT architecture. SOA was chosen by Mohawk because Mohawk:

Mohawk's need for flexibility required a change to its IT architecture. SOA was chosen by Mohawk because Mohawk:



a) Needed to be able to scale up or down operations as called for by the market or by its own arrangements with suppliers
b) Wanted to eliminate the dependency on its ERP system.
c) Needed to upgrade its infrastructure components to meet the increased IT demands.
d) Believed that SOA provides the appropriate level of security it did not have with its original architecture.
e) Benefited from standardizing on the SAP suite of products and reducing its reliance on multiple vendors.


Answer: Needed to be able to scale up or down operations as called for by the market or by its own arrangements with suppliers

Google Maps is a web mapping service that provides street maps and directions. A Google Maps component can be added to a business's web site to provide customers directions to the business location. This use of Google's service by a business is an example of __________.

Google Maps is a web mapping service that provides street maps and directions. A Google Maps component can be added to a business's web site to provide customers directions to the business location. This use of Google's service by a business is an example of __________.



a) Centralized architecture
b) Decentralized architecture
c) Service-oriented architecture
d) Internet-based architecture
e) Enterprise architecture


Answer: Service-oriented architecture

"Reuse" is a benefit of service-oriented architecture because it supports:

"Reuse" is a benefit of service-oriented architecture because it supports:



a) Using sensitive data again and again
b) The breaking apart of functionality into small services that can be used by many different systems
c) Access to servers from many locations.
d) The selection of a specific computing device by each employee.
e) Reliable capacity-on-demand


Answer: The breaking apart of functionality into small services that can be used by many different systems

Alliance management is considered an organizational capability and:

Alliance management is considered an organizational capability and:



A. develops over time, out of effort and learning.

B. decreases a company's knowledge assets.

C. creates successful strategic alliances.

D. decreases a company's knowledge capabilities.

E. rapidly transfers assets into the strategic alliance.


Answer: develops over time, out of effort and learning.

A company that fails in managing their strategic alliance probably has not:

A company that fails in managing their strategic alliance probably has not: 



A. incorporated contractual safeguards.

B. made opportunities for learning a routine management process.

C. created a system to manage alliances in a systematic fashion.

D. established strong interpersonal relationships and established trust.

E. All of these.


Answer: all of these

A company that has greater success in managing their strategic alliance can credit all of the following, EXCEPT:

A company that has greater success in managing their strategic alliance can credit all of the following, EXCEPT: 



A. establishing strong interpersonal relationships to facilitate communication.

B. incorporating contractual safeguards.

C. making opportunities for learning a routine management process.

D. establishing a system to manage alliances in a systematic fashion.

E. creating organizational learning barriers across boundaries.


Answer: creating organizational learning barriers across boundaries.

The principal advantages of strategic alliances over vertical integration or horizontal mergers/acquisitions is defined best by:

The principal advantages of strategic alliances over vertical integration or horizontal mergers/acquisitions is defined best by: 



A. resource pooling and risk sharing, more adaptive response capabilities, and the speed of deployment wherewithal.

B. the potential profitability of the alliance and related experience curve economics.

C. facilitating best practices, more production capacity, and relevant synergistic savings.

D. embracing the transactional and relational concept of operating practices and competencies.

E. All of these.


Answer: resource pooling and risk sharing, more adaptive response capabilities, and the speed of deployment wherewithal.

The Achilles heel (or biggest disadvantage/pitfall) of relying heavily on alliances and cooperative strategies is:

The Achilles heel (or biggest disadvantage/pitfall) of relying heavily on alliances and cooperative strategies is: 



A. that partners will not fully cooperate or share all they know, preferring instead to guard their most valuable information and protect their more valuable know-how.

B. becoming dependent on other companies for essential expertise and capabilities.

C. the added time and extra expenses associated with engaging in collaborative efforts.

D. having to compromise the company's own priorities and strategies in reaching agreements with partners.

E. the collaborative arrangements will not live up to expectations.


Answer: becoming dependent on other companies for essential expertise and capabilities.

Experience indicates that strategic alliances:

Experience indicates that strategic alliances: 



A. are generally successful.

B. work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency.

C. work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies.

D. can suffer culture clash and integration problems due to different management styles and business practices.

E. are rarely useful in helping a company win the race for global industry leadership.


Answer: can suffer culture clash and integration problems due to different management styles and business practices.

Which of the following is NOT a typical reason that many alliances prove unstable or break apart?

Which of the following is NOT a typical reason that many alliances prove unstable or break apart? 



A. Diverging objectives and priorities.

B. An inability to work well together.

C. The emergence of more attractive technological paths.

D. Disagreement over how to divide the profits gained from joint collaboration.

E. Changing conditions that render the purpose of the alliance obsolete.


Answer: Disagreement over how to divide the profits gained from joint collaboration.

Capturing the benefits of strategic alliances is not easy, but success generally is a function of six factors, except when:

Capturing the benefits of strategic alliances is not easy, but success generally is a function of six factors, except when: 



A. being sensitive to cultural differences.

B. managing the learning process and allowing for emerging circumstances.

C. picking a good partner with good chemistry.

D. recognizing that the alliance must benefit both sides.

E. ensuring the division of work is directly apportioned to appropriate skill sets.


Answer: ensuring the division of work is directly apportioned to appropriate skill sets.

Which of the following is NOT one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits?

Which of the following is NOT one of the factors that affects whether a strategic alliance will be successful and realize its intended benefits? 



A. Picking a good partner.

B. Recognizing that the alliance must benefit both sides.

C. Minimizing the amount of resources that the partners commit to the alliance.

D. Ensuring that both parties live up to their commitments.

E. Structuring the decision-making process so actions can be taken swiftly when needed.


Answer: Minimizing the amount of resources that the partners commit to the alliance.

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships to:

A company racing to seize opportunities on the frontiers of advancing technology often utilizes strategic alliances and collaborative partnerships to: 



A. discourage rival companies from merging with or acquiring the very companies that it is partnering with.

B. reduce overall business risk and raise entry barriers into the newly emerging industry.

C. help master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry.

D. help defeat competitors that are employing broad differentiation strategies.

E. enhance its chances of achieving global low-cost leadership.


Answer: help master new technologies and build new expertise and competencies, establish a stronger beachhead for participating in the target industry, and open up broader opportunities in the target industry.

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to:

Companies racing against rivals for global market leadership need strategic alliances and collaborative partnerships with companies in foreign countries to: 



A. combat the bargaining power of foreign suppliers and help defend against the competitive threat of substitute products produced by foreign rivals.

B. help raise needed financial capital from foreign banks and use the brand names of their partners to make sales to foreign buyers.

C. get into critical country markets quickly, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations.

D. help wage price wars against foreign competitors.

E. exercise better control over efforts to revamp the global industry value chain.


Answer: get into critical country markets quickly, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations.

Which one of the following is NOT a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products?

Which one of the following is NOT a strategically beneficial reason why a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products? 



A. To improve access to new markets.

B. To expedite the development of promising new technologies or products.

C. To enable greater opportunities for employee advancement.

D. To improve supply chain efficiency.

E. To overcome disadvantages of small production volumes that limit scale economies and low production costs.


Answer: To enable greater opportunities for employee advancement.

The best strategic alliances:

The best strategic alliances: 



A. are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit, thereby enabling the firm to build on its strengths and to learn.

B. are those whose purpose is to create an industry key success factor.

C. are those which help a company move quickly from one strategic group to another.

D. involve joining forces in R&D to develop new technologies cheaper than a company could develop the technology on its own.

E. aim at raising an industry's barriers to entry.


Answer: are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit, thereby enabling the firm to build on its strengths and to learn.

An alliance becomes "strategic" as opposed to just a convenient business arrangement when it serves strategic purposes such as when designed to help:

An alliance becomes "strategic" as opposed to just a convenient business arrangement when it serves strategic purposes such as when designed to help: 



A. build, sustain, or enhance a core competence or competitive advantage.

B. block a competitive threat.

C. increase the bargaining power of alliance members over suppliers or buyers.

D. open up important new market opportunities.

E. All of these.


Answer: all of these

Entering into strategic alliances and collaborative partnerships can be competitively valuable because:

Entering into strategic alliances and collaborative partnerships can be competitively valuable because: 



A. working closely with outsiders is essential in developing new technologies and new products in virtually every industry.

B. cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology.

C. they represent highly effective ways to achieve low-cost leadership and capture first-mover advantages.

D. they are a powerful way for companies to build loyalty and goodwill among customers with diverse needs and expectations.

E. they are quite effective in helping a company transfer the risks of threatening external developments to other companies.


Answer: cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology.

Which of the following is NOT a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement?

Which of the following is NOT a factor that makes an alliance "strategic" as opposed to just a convenient business arrangement? 



A. The alliance is critical to the company's achievement of an important objective.

B. The alliance helps block a competitive threat.

C. The alliance helps open up important new market opportunities.

D. The alliance helps build, enhance, or sustain a core competence or competitive advantage.

E. The alliance helps the company obtain additional financing on better credit terms.


Answer: The alliance helps the company obtain additional financing on better credit terms.

A strategic alliance:

A strategic alliance: 



A. is a collaborative arrangement where companies join forces to defeat mutual competitive rivals.

B. involves two or more companies joining forces to pursue vertical integration.

C. is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, the joint contribution of resources, shared risk, shared control, and mutual dependence.

D. is a partnership between two companies that is typically intended to eliminate the need to engage in outsourcing.

E. is usually a cheaper and more effective way for companies to join forces than a merger.


Answer: is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, the joint contribution of resources, shared risk, shared control, and mutual dependence.

Strategic alliances:

Strategic alliances: 



A. are the cheapest means of developing new technologies and getting new products to market quickly.

B. are collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective.

C. are a proven means of reducing the costs of performing value chain activities.

D. are best used to insulate a company from the impact of the five competitive forces.

E. help insulate a firm from the adverse impacts of industry driving forces.


Answer: are collaborative formal arrangements where two or more companies join forces and agree to work cooperatively toward some strategically relevant objective.

The big risk of employing an outsourcing strategy is:

The big risk of employing an outsourcing strategy is: 



A. causing the company to become partially integrated instead of being fully integrated.

B. hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.

C. hurting a company's R&D capability.

D. putting the company in the position of being a late mover instead of an early mover.

E. increasing the firm's risk exposure to both supply chain management failures and shifts in the composition of the industry value chain.


Answer: hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.

Outsourcing strategies can offer such advantages as:

Outsourcing strategies can offer such advantages as: 



A. increasing a company's ability to strongly differentiate its product and be successful with either a broad differentiation strategy or a focused differentiation strategy.

B. obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.

C. speeding a company's entry into foreign markets.

D. permitting greater use of strategic alliances and collaborative partnerships.

E. giving a firm more direct control over the costs of value chain activities.


Answer: obtaining higher quality and/or cheaper components or services, improving a company's ability to innovate, and reducing its risk exposure.

Relying on outsiders to perform certain value chain activities offers such strategic advantages as:

Relying on outsiders to perform certain value chain activities offers such strategic advantages as: 



A. ensuring more costly components or services.

B. improving the company's inability to innovate by allying with "best-in-class" suppliers.

C. reducing the company's risk exposure to changing technology and/or changing buyer preferences.

D. increasing the firm's inability to assemble diverse kinds of expertise speedily and efficiently.

E. reducing its information technology and operational costs so that organizational flexibility is maintained.


Answer: reducing the company's risk exposure to changing technology and/or changing buyer preferences.

Which of the following is NOT one of the benefits of outsourcing value chain activities presently performed in-house?

Which of the following is NOT one of the benefits of outsourcing value chain activities presently performed in-house? 



A. Streamlines company operations in ways that improve organizational flexibility and cuts the time it takes to get new products into the marketplace.

B. Allows a company to concentrate on its core business, leverage its key resources, and do even better what it already does best.

C. Helps the company assemble diverse kinds of expertise speedily and efficiently.

D. Enables a company to gain better access to end users and better market visibility.

E. Improves a company's ability to innovate.


Answer: Enables a company to gain better access to end users and better market visibility.

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense EXCEPT when:

Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense EXCEPT when: 



A. an activity can be performed better or more cheaply by outside specialists.

B. it allows a company to focus its entire energies on its core business, leverage its key resources, and do even better what it already does best.

C. it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently.

D. it reduces the company's risk exposure to changing technology and/or changing buyer preferences.

E. All of these.


Answer: it restricts a company's ability to assemble diverse kinds of expertise speedily and efficiently.

The two big drivers of outsourcing are:

The two big drivers of outsourcing are: 



A. an increased ability to cut R&D expenses and an increased ability to avoid the problems of strategic alliances.

B. that outsiders can often perform certain activities better or more cheaply, and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies).

C. a desire to reduce the company's investment in fixed assets and the need to narrow the scope of the company's in-house competencies and competitive capabilities.

D. the ability to avoid capital investments that accompany vertical integration and a desire to reduce the company's risk exposure to changing technology and/or changing buyer preferences.

E. that a smaller in-house workforce and a low investment in intellectual capital will produce cost savings.


Answer: that outsiders can often perform certain activities better or more cheaply, and outsourcing allows a firm to focus its entire energies on those activities that are at the center of its expertise (its core competencies).

An outsourcing strategy:

An outsourcing strategy: 



A. is nearly always a more attractive strategic option than merger and acquisition strategies.

B. carries the substantial risk of raising a company's costs.

C. carries the substantial risk of making a company overly dependent on its suppliers.

D. increases a company's risk exposure to changing technology and/or changing buyer preferences.

E. involves farming out certain value chain activities presently performed in-house to outside vendors.


Answer: involves farming out certain value chain activities presently performed in-house to outside vendors.

A strategy of vertical integration can have both important strengths and weaknesses and depends on:

A strategy of vertical integration can have both important strengths and weaknesses and depends on: 



A. whether it can limit the performance of strategy-critical activities in ways that increase cost, build expertise, protect proprietary know-how, or increase differentiation.

B. the impact on investment costs, flexibility, and response times.

C. the administrative costs of coordinating operations across more vertical chain activities.

D. how difficult it will be for the company to acquire the set of skills and capabilities needed to operate in another stage of the vertical chain.

E. All of these.


Answer: All of these

A strategy of vertical integration can have substantial drawbacks, including:

A strategy of vertical integration can have substantial drawbacks, including: 



A. whether horizontal integration can limit the performance of strategy-critical activities in ways that increase cost, build expertise, protect proprietary know-how, or increase differentiation.

B. raising the firm's capital investment in the industry and increasing business risk, as well as providing less flexibility in accommodating shifting buyer preferences by locking the firm into relying on its own in-house activities.

C. the environmental costs of coordinating operations across vertical chain activities.

D. the ease to manage a set of skills and capabilities needed to operate in another stage of the vertical chain.

E. the difficulties faced in entering outside vertical and horizontal markets.


Answer: the environmental costs of coordinating operations across vertical chain activities.

Bypassing regular wholesale/retail channels in favor of direct sales and Internet retailing can have appeal if:

Bypassing regular wholesale/retail channels in favor of direct sales and Internet retailing can have appeal if: 



A. it reinforces the brand, enhances consumer satisfaction, and results in lower prices to end users.

B. it can result in better coordination of the firm's direct sales activity to wholesalers and distributors

C. it can establish a retail frontal attack while efficiently managing its backward (defensive) sales orientation.

D. it combines the best of all sales channels and provides financial support to distribution allies.

E. it creates a channel conflict, thereby providing competitive improvisation.


Answer: it reinforces the brand, enhances consumer satisfaction, and results in lower prices to end users.

Which of the following is NOT a strategic disadvantage of vertical integration?

Which of the following is NOT a strategic disadvantage of vertical integration? 



A. Vertical integration boosts a firm's capital investment in the industry, thus increasing business risk if the industry becomes unattractive later.

B. Vertical integration backward into parts and components manufacturing can impair a company's operating flexibility when it comes to changing out the use of certain parts and components.

C. Vertical integration reduces the opportunity for achieving greater product differentiation.

D. Forward or backward integration often calls for radically different skills and business capabilities than the firm possesses.

E. Vertical integration poses all kinds of capacity-matching problems.


Answer: Vertical integration reduces the opportunity for achieving greater product differentiation.

Which of the following is typically the strategic impetus for forward vertical integration?

Which of the following is typically the strategic impetus for forward vertical integration? 



A. Being able to control the wholesale/retail portion of the industry value chain.

B. Fewer disruptions in the delivery of the company's products to end users.

C. Gaining better access to end users and better market visibility.

D. Broadening the company's product line.

E. Allowing the firm access to greater economies of scale.


Answer: Gaining better access to end users and better market visibility.

The strategic impetus for forward vertical integration is to:

The strategic impetus for forward vertical integration is to: 



A. gain better access to end users and better market visibility.

B. achieve the same scale economies as wholesale distributors and/or retail dealers.

C. control price at the retail level.

D. bypass distributors and dealers and sell direct to consumers at the company's website.

E. build a core competence in mass merchandising.


Answer: gain better access to end users and better market visibility.

Backward vertical integration can produce:

Backward vertical integration can produce: 



A. a full integration when activities remain the domain of key suppliers.

B. a tapered integration if the firm consolidates all activities in-house.

C. a differentiation-based competitive advantage when activities enhance the performance of the final product.

D. a focused differentiation strategy when the market is broad and the product is a commodity.

E. All of these.


Answer: a differentiation-based competitive advantage when activities enhance the performance of the final product.

Which of the following is NOT a potential advantage of backward vertical integration?

Which of the following is NOT a potential advantage of backward vertical integration? 



A. Reduced vulnerability to powerful suppliers (who may be inclined to raise prices at every opportunity).

B. Reduced risks of disruptions in obtaining crucial components or support services.

C. Reduced costs.

D. Reduced business risk because of controlling a bigger portion of the overall industry value chain.

E. Adding to a company's differentiation capabilities and perhaps achieving a differentiation-based competitive advantage.


Answer: Reduced business risk because of controlling a bigger portion of the overall industry value chain.

Vertical integration can lower costs by:

Vertical integration can lower costs by: 



A. expanding supplier power.

B. facilitating the coordination of production flows and avoiding bottlenecks.

C. establishing the framework for operating.

D. creating control factors across the value chain.

E. All of these.


Answer: facilitating the coordination of production flows and avoiding bottlenecks.

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company:

For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company: 



A. must first be a proficient manufacturer.

B. must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality.

C. must have excess production capacity so that it has an ample in-house ability to undertake additional production activities.

D. needs to have a wide product line, so it can supply parts and components for many products.

E. should have a distinctive competence in production process technology and at least a core competence in manufacturing R&D.


Answer: must be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop-off in quality.

A vertical integration strategy can expand the firm's range of activities:

A vertical integration strategy can expand the firm's range of activities: 



A. backward into sources of supply and/or forward toward end users.

B. backward into other industry business-lines and/or forward to suppliers of raw materials.

C. to enable the supply chain the opportunity for expansion.

D. to complement the industry's horizontal value chain line of profitability.

E. to establish full integration by participating in a tapered integration (without the outsourced and in-house activities).


Answer: backward into sources of supply and/or forward toward end users.

A good example of vertical integration is:

A good example of vertical integration is: 



A. a global public accounting firm acquiring a small local or regional public accounting firm.

B. a large supermarket chain getting into convenience food stores.

C. a crude oil refiner purchasing a firm engaged in drilling and exploring for oil.

D. a hospital opening up a nursing home for the aged.

E. a railroad company acquiring a trucking company specializing in long-haul freight.


Answer: a crude oil refiner purchasing a firm engaged in drilling and exploring for oil.

The two best reasons for investing company resources in vertical integration (either forward or backward) are to:

The two best reasons for investing company resources in vertical integration (either forward or backward) are to: 



A. expand into foreign markets and/or control more of the industry value chain.

B. broaden the firm's product line and/or avoid the need for outsourcing.

C. gain a first-mover advantage over rivals in revamping the industry value chain.

D. add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.

E. achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain a greater ability to reduce internal operating costs.


Answer: add materially to a company's technological capabilities, strengthen the company's competitive position, and/or boost its profitability.

Vertical integration strategies:

Vertical integration strategies: 



A. extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain.

B. are one of the best strategic options for helping companies win the race for global market leadership.

C. offer good potential to expand a company's lineup of products and services.

D. are particularly effective in boosting a company's ability to expand into additional geographic markets, particularly the markets of foreign countries.

E. is a good strategy option for helping a company revamp its value chain and bypass low value-added activities.


Answer: extend a company's competitive scope within the same industry by expanding its operations across multiple segments or stages of the industry value chain.

A primary reason for why mergers and acquisitions sometimes fail is due to the:

A primary reason for why mergers and acquisitions sometimes fail is due to the: 



A. misinterpretation of the cultural differences, like employee disenchantment and low morale, differences in management styles and operating procedures, and operations integration decision mistakes.

B. execution of functional and integration activity, while sustaining and capitalizing on the combined sources of revenue.

C. development of effective integration plans conducive to employee satisfaction.

D. advertising message detailing the merger announcement.

E. All of these.


Answer: misinterpretation of the cultural differences, like employee disenchantment and low morale, differences in management styles and operating procedures, and operations integration decision mistakes.

Mergers and acquisitions:

Mergers and acquisitions: 



A. are nearly always successful in achieving their desired purpose.

B. frequently do not produce the hoped-for outcomes.

C. are generally less effective than forming alliances or partnerships with these same companies.

D. are highly risky because of the financial drain that comes from using the company's cash resources to pay for the costs of the merger or acquisition.

E. are usually more successful in achieving cost reductions than in expanding a company's market opportunities.


Answer: frequently do not produce the hoped-for outcomes.

What outcomes do horizontal merger and acquisition strategies intend?

What outcomes do horizontal merger and acquisition strategies intend? 



A. Expanding a company's geographic coverage.

B. Gaining quick access to new technologies or complementary resources and capabilities.

C. Leading the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities.

D. Extending the company's business into new product categories.

E. All of these.


Answer: All of these

Merger and acquisition strategies:

Merger and acquisition strategies: 



A. are nearly always a superior strategic alternative to forming alliances or partnerships with these same companies.

B. may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.

C. are a particularly effective way of pursuing a blue-ocean strategy and an outsourcing strategy.

D. seldom are a superior strategic alternative to forming alliances with these same companies because of the financial drain of using the company's cash resources to accomplish the merger or acquisition.

E. is one of the best ways for helping a company strongly differentiate its product offering and use a differentiation strategy to strengthen its market position.


Answer: may offer considerable cost-saving opportunities and can also be beneficial in helping a company try to invent a new industry.

Mergers and acquisitions are often driven by such strategic objectives as:

Mergers and acquisitions are often driven by such strategic objectives as: 



A. expanding a company's geographic coverage or extending its business into new product categories.

B. reducing the number of industry key success factors.

C. reducing the number of strategic groups in the industry.

D. facilitating a company's shift from a low-cost leadership strategy to a focused low-cost strategy.

E. lengthening a company's value chain and thereby putting it in a better position to deliver superior value to buyers.


Answer: expanding a company's geographic coverage or extending its business into new product categories.

Which of the following is NOT a typical strategic objective or benefit that drives mergers and acquisitions?

Which of the following is NOT a typical strategic objective or benefit that drives mergers and acquisitions? 



A. To gain quick access to new technologies or other resources and capabilities.

B. To create a more cost-efficient operation out of the combined companies.

C. To expand a company's geographic coverage.

D. To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy.

E. To extend a company's business into new product categories.


Answer: To facilitate a company's shift from a broad differentiation strategy to a focused differentiation strategy.

The difference between a merger and an acquisition relates to:

The difference between a merger and an acquisition relates to: 



A. strategy and competitive advantage.

B. the presence of available resources and competitive capabilities.

C. whether the end result is related to horizontal or vertical scope.

D. creating a more cost-efficient operation out of the combined companies.

E. the details of ownership, management control, and the financial arrangements.


Answer: the details of ownership, management control, and the financial arrangements.

The difference between a merger and an acquisition is that:

The difference between a merger and an acquisition is that: 



A. a merger involves one company purchasing the assets of another company with cash, whereas an acquisition involves a company acquiring another company by buying all of the shares of its common stock.

B. a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired).

C. in a merger, the companies retain their original names, whereas in an acquisition the name of the company being acquired is changed to be the name of the acquiring company.

D. a merger is a combination of three or more companies, whereas an acquisition is a pooling of interests of just two companies.

E. a merger involves two or more companies deciding to adopt the same strategy, whereas an acquisition involves one company taking over the strategy-making function of another company.


Answer: a merger is the combining of two or more companies into a single corporate entity, whereas an acquisition involves one company (the acquirer) purchasing and absorbing the operations of another company (the acquired).

The extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system is known as:

The extent to which a firm's internal activities encompass one, some, many, or all of the activities that make up an industry's entire value chain system is known as: 



A. horizontal scale.

B. vertical scope.

C. outsourcing scope.

D. cooperative scaled scope.

E. focal scope.


Answer: vertical scope

What does the scope of the firm refer to?

What does the scope of the firm refer to? 



A. The range of activities the firm performs externally and its social responsibility activities

B. To gain competitive advantage based on where it locates its various value chain activities

C. The firm's capability to employ vertical integration strategies

D. The range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses

E. To prevent foreign competition from affecting the market


Answer: The range of activities the firm performs internally and the breadth of its product offerings, the extent of its geographic market, and its mix of businesses

Any company that seeks competitive advantage by being a first-mover must ask several hard questions prior to executing its strategy. Which question would it NOT ask?

Any company that seeks competitive advantage by being a first-mover must ask several hard questions prior to executing its strategy. Which question would it NOT ask? 



A. Does market take-off depend on the new development of complementary products?

B. Is a new infrastructure required before buyer demand can surge?

C. Will buyers encounter high switching costs to move?

D. Are there influential competitors in a position to delay or derail the efforts?

E. Did the company pour too many resources into getting ahead of the market opportunity?


Answer: Did the company pour too many resources into getting ahead of the market opportunity?

For every emerging opportunity there exists:

For every emerging opportunity there exists: 



A. a market penetration curve, and this typically has an inflection point where the business model falls into place.

B. an opportunity to achieve first-mover status, which depends on analyzing the competitive status curve where all the potential rivals are encoded.

C. an emerging pitfall exists that is a counterpoint to the intended growth.

D. a normal curve scenario which signifies the average growth curve will be opportunistic.

E. All of these.


Answer: a market penetration curve, and this typically has an inflection point where the business model falls into place.

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when:

The race among rivals for industry leadership is more likely to be a marathon rather than a sprint when: 



A. new industry or market segments are yet to be developed and create altogether new consumer demand.

B. fast followers find it easy to leapfrog the pioneer with even better next-generation products of their own.

C. the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first-mover.

D. entry barriers are high, substitute products or services are readily available, and buyers are prone to negotiate aggressively for better terms and lower prices.

E. there are nearly always big advantages to being a slow mover rather than an early mover, especially in regards to avoiding the "mistakes" of first or early movers.


Answer: the market depends on the development of complementary products or services that are currently not available, buyers have high switching costs, and influential rivals are in position to derail the efforts of a first-mover.

Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is:

Because when to make a strategic move can be just as important as what move to make, a company's best option with respect to timing is: 



A. to be the first mover.

B. to be a fast follower.

C. to be a late mover (because it is cheaper and easier to imitate the successful moves of the leaders and moving late allows a company to avoid the mistakes and costs associated with trying to be a pioneer—first-mover disadvantages usually overwhelm first-mover advantages).

D. to be the last-mover—playing catch-up is usually fairly easy and almost always is much cheaper than any other option.

E. to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.


Answer: to carefully weigh the first-mover advantages against the first-mover disadvantages and act accordingly.

In which of the following cases are late-mover advantages (or first-mover disadvantages) NOT likely to arise?

In which of the following cases are late-mover advantages (or first-mover disadvantages) NOT likely to arise? 



A. When the costs of pioneering are much higher than being a follower and only negligible learning/experience benefits accrue to the pioneer.

B. When the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover.

C. When the pioneer's products are somewhat primitive and are easily bested by late movers.

D. When opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand.

E. When technological change is rapid and fast-following rivals find it easy to leapfrog the pioneer with next-generation products of their own.


Answer: When opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand.

First-mover disadvantages (or late-mover advantages) rarely ever arise when:

First-mover disadvantages (or late-mover advantages) rarely ever arise when: 



A. the costs of pioneering are much higher than being a follower and only negligible learning/experience curve benefits accrue to the pioneer.

B. rapid market evolution gives fast followers an opening to leapfrog the pioneer with next-generation products of their own.

C. the pioneer's products are somewhat primitive and do not live up to buyer expectations, allowing clever followers to win disenchanted buyers with better-performing products.

D. the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover.

E. the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.


Answer: the market response is strong and the pioneer gains a monopoly position that enables it to recover its investment.

In which of the following instances is being a first-mover NOT particularly advantageous?

In which of the following instances is being a first-mover NOT particularly advantageous?



A. When moving first with a preemptive strike makes imitation difficult or unlikely.

B. When first-time buyers remain strongly loyal to pioneering firms in making repeat purchases.

C. When early commitments to new technologies, types of components, or emerging distribution channels produce an absolute cost advantage over rivals.

D. When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover.

E. When being a pioneer helps build a firm's image and reputation with buyers.


Answer: When markets are slow to accept the innovative product offering of a first-mover, and fast followers possess sufficient resources and marketing muscle to overtake a first mover.

Being first to initiate a particular strategic move can have a high payoff in all of the following EXCEPT when:

Being first to initiate a particular strategic move can have a high payoff in all of the following EXCEPT when: 



A. pioneering helps build up a firm's image and reputation and creates strong brand loyalty.

B. buyers remain strongly loyal to pioneering firms because of incentives and switching costs barriers.

C. there is a steep learning curve and when learning can be kept proprietary.

D. moving first can constitute a preemptive strike, making imitation extra hard or unlikely.

E. market uncertainties make it difficult to ascertain what will eventually succeed.


Answer: market uncertainties make it difficult to ascertain what will eventually succeed.

Which of the following signals would NOT warn challengers that strong retaliation is likely?

Which of the following signals would NOT warn challengers that strong retaliation is likely? 



A. Publicly announcing management's commitment to maintain market share.

B. Publicly committing to a company policy of matching competitors' terms or pricing.

C. Maintaining a war chest of cash and marketable securities.

D. Making a strong counter-response to the moves of weak competitors.

E. Announcing strong quarterly earnings potential to financial analysts.


Answer: Announcing strong quarterly earnings potential to financial analysts.

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack?

What is the goal of signaling a challenger that strong retaliation is likely in the event of an attack? 



A. To alleviate their fears by committing to reduce the costs of value chain activities.

B. To cause the challenger to begin the attack instead of waiting.

C. To dissuade challengers from attacking or diverting them into using less threatening options.

D. To create collaborative relationships with challengers.

E. To insulate other firms from adverse impacts resulting from the challenge.


Answer: To dissuade challengers from attacking or diverting them into using less threatening options.

Which of the following ways are employed by defending companies to fend off a competitive attack?

Which of the following ways are employed by defending companies to fend off a competitive attack?



A. Remain steadfast to current product features, models, and warranty terms to ensure resources are not diverted toward unproductive efforts.

B. Exclude volume discounts or better financing terms from the strategic response in order to maintain current profitability levels.

C. Gain product line exclusivity to force competitors to use other distributors.

D. Discourage buyers from leaving by offering expensive training and customer support services that highlight the quality of the product.

E. All of these.


Answer: Gain product line exclusivity to force competitors to use other distributors.

Which of the following is NOT a purpose of a defensive strategy?

Which of the following is NOT a purpose of a defensive strategy? 



A. To increase the risk of having to defend an attack.

B. To weaken the impact of any attack that occurs.

C. To pressure challengers to aim their efforts at other rivals.

D. To help protect a competitive advantage.

E. To decrease the risk of being attacked.


Answer: To increase the risk of having to defend an attack.

Which of the following is NOT a prime example of a blue-ocean market strategy?

Which of the following is NOT a prime example of a blue-ocean market strategy? 



A. The eBay online auction industry.

B. Starbucks coffee shops.

C. The weather Channel on cable TV.

D. FedEx overnight package delivery.

E. Walmart's logistics and distribution.


Answer: Walmart's logistics and distribution.

A blue-ocean strategy:

A blue-ocean strategy: 



A. is an offensive strike employed by a market leader that is directed at pilfering customers away from unsuspecting rivals to boost profitability.

B. involves an unexpected (out-of- the-blue) preemptive strike to secure an advantageous position in a fast-growing market segment.

C. works best when a company is the industry's low-cost leader.

D. involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

E. involves the use of highly creative, never-used-before strategic moves to attack the competitive weaknesses of rivals.


Answer: involves abandoning efforts to beat out competitors in existing markets and instead invent a new industry or new market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand.

When challenging a struggling rival, it can:

When challenging a struggling rival, it can: 



A. sap the rival's financial strength and competitive position.

B. weaken the rival's resolve.

C. accelerate the rival's exit from the market.

D. threaten the rival's overall survival in the market.

E. All of these.


Answer: All of these

Which of the following rivals make the best targets for an offensive attack?

Which of the following rivals make the best targets for an offensive attack? 



A. Firms with weaknesses in areas where the challenger is strong.

B. Companies that are financially strong and possess favorable competitive market positioning.

C. Large national firms with vast capabilities and intermittent trivial resource deficiencies.

D. Strong and financially secure market leaders.

E. Small local and regional firms with unrestrained capabilities.


Answer: Firms with weaknesses in areas where the challenger is strong.

An offensive to yield good results can be short if:

An offensive to yield good results can be short if: 



A. buyers respond immediately (to a dramatic cost-based price cut or imaginative ad campaign).

B. competition creates an appealing new product.

C. the technology needs debugging.

D. new production capacity needs to be installed.

E. consumer acceptance of an innovative product takes time.


Answer: buyers respond immediately (to a dramatic cost-based price cut or imaginative ad campaign).

Which of the following is NOT a principal offensive strategy option?

Which of the following is NOT a principal offensive strategy option? 



A. Leapfrogging competitors by being first to market with next-generation products.

B. Using hit-and-run or guerrilla warfare tactics to grab sales and market share.

C. Launching a preemptive strike to secure an advantageous position that rivals are prevented or discouraged from duplicating.

D. Pursuing continuous product innovation to draw sales and market share away from rivals.

E. Being the final competitor to market a next-generation product so as to guarantee the product is operationally sound.


Answer: Being the final competitor to market a next-generation product so as to guarantee the product is operationally sound.

The principal offensive strategy options include all of the following EXCEPT:

The principal offensive strategy options include all of the following EXCEPT: 



A. using a cost advantage to attack competitors on the basis of lower price or better product value.

B. using hit-and-run or guerrilla warfare tactics to grab sales and market share from complacent or distracted rivals.

C. launching a preemptive strike to secure an advantageous position that rivals are prevented or discouraged from duplicating.

D. pursuing continuous product innovation to draw sales and market share away from less innovative rivals.

E. initiating a market threat and counterattack simultaneously to effect a distraction.


Answer: initiating a market threat and counterattack simultaneously to effect a distraction.

Strategic offensives should, as a general rule, be based on:

Strategic offensives should, as a general rule, be based on: 



A. exploiting a company's strongest competitive assets—its most valuable resources and capabilities.

B. instigating and executing the chosen strategy efficiently and effectively.

C. scoping and scaling an organization's internal and external situation.

D. molding an organization's character and identity.

E. satisfying the buyer's needs that the company seeks to meet.


Answer: exploiting a company's strongest competitive assets—its most valuable resources and capabilities.

Which one of the following is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies?

Which one of the following is NOT a strategic choice that a company must make to complement and supplement its choice of one of the five generic competitive strategies? 



A. Whether to focus on building competitive advantages.

B. Whether to employ the element of surprise as opposed to doing what rivals expect and are prepared for.

C. Whether to employ a market share leadership strategy.

D. Whether to display a strong bias for swift, decisive, and overwhelming actions to overpower.

E. Whether to create and deploy company resources to cause rivals to defend themselves.


Answer: Whether to employ a market share leadership strategy.

Once a company has decided to employ a particular generic competitive strategy, then it must make such additional strategic choices, such as:

Once a company has decided to employ a particular generic competitive strategy, then it must make such additional strategic choices, such as: 



A. whether to focus on building competitive advantages.

B. whether to employ the element of surprise as opposed to doing what rivals expect and are prepared for.

C. whether to display a strong bias for swift, decisive, and overwhelming actions to overpower rivals.

D. whether to create and deploy company resources to cause rivals to defend themselves.

E. All of these.


Answer: All of these

Sometimes it makes sense for a company to go on the offensive to improve its market position and business performance. The best offensives tend to incorporate the following EXCEPT:

Sometimes it makes sense for a company to go on the offensive to improve its market position and business performance. The best offensives tend to incorporate the following EXCEPT: 



A. focusing relentlessly on building a competitive advantage.

B. applying resources where rivals are least able to defend themselves.

C. using a strategic offense to allow the company to leverage its weaknesses to strengthen operating vulnerabilities.

D. employing the elements of surprise as opposed to doing what rivals expect and are prepared for.

E. displaying a strong bias for swift, decisive, and overwhelming actions to overpower rivals.


Answer: using a strategic offense to allow the company to leverage its weaknesses to strengthen operating vulnerabilities.
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