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MGT 3830 Ch. 1-4 Questions And Accurate Answers 2024-
Strategy today is essentially a detailed plan which every member of the organization must follow to ensure success. - Answer False
. Strategy is a unifying theme that gives coherence and direction to the actions and decisions of an individual or an organization. - Answer True
For most firms, although good luck may play a part, success is more likely to be a result of a soundly grounded and well executed strategy. - Answer T
Sound strategy and effective implementation largely determine the probability and extent of the success of a firm. - Answer T
A sound strategy relies on four factors: measurable short-term targets; sound understanding of the competitive environment; objective appraisal of resources; and top down implementation of strategic decisions. - Answer F - long-term targets
Strategy has evolved from "strategy as a detailed plan" to become "strategy as direction" in the early 21st century. - Answer T
. Corporate strategy is also called business strategy, or competitive strategy. - Answer F
Strategy is predominantly about countering short-term competition. - Answer F- long term
Much can be learned about a firm's actual strategy by looking at where it invests most money, and what products, services and technologies it is working on. - Answer T
Some observers have noticed that there's only a weak link between a firm's intended or
stated strategy, and its actual or realized strategy - Answer T
Strategy is fundamentally about: a. Being better than rivals b. Success in achieving long-term goals c. Satisfying all stakeholders d. Being an excellent "corporate citizen" - Answer b. Success in achieving long-term goals
Success is fundamentally linked to:
a. A soundly formulated strategy and luck b. An effectively formulated strategy and a strong awareness of the rivals' strengths c. A clear understanding of the environment and strong political skills d. A soundly formulated and effectively implemented strategy - Answer d. A soundly formulated and effectively implemented strategy
From the two illustrations describing key attributes of strategy at the beginning of the chapter, four factors stand out: a. Goals, environment, appraisal of resources, and social and cultural implications b. Goals, internal and external analysis of the environment, effective implementation, and awareness of rivals' strengths c. Consistent goals, understanding the environment, objective appraisal of resources, and effective implementation d. Goals, environment, irreversibility of decision, and effective implementation - Answer c. Consistent goals, understanding the environment, objective appraisal of resources, and effective implementation
Strategic goals should be: a. Simple
a. Corporate Strategy has a broader scope, including decisions about which industries to operate in b. Business strategy is subordinate to corporate strategy c. Both a and b d. There is no real difference; they are the same thing - Answer c. Both a and b`
Business strategy defines: a. The way a firm competes in a particular industry or market b. How a firm gains a competitive advantage over its rivals within a specific industry or market c. Both a and b d. Neither a nor b - Answer c. Both a and b
Business strategy can be summarized as: a. The means by which organisations achieve their long-term objectives b. The means by which individuals achieve their objectives c. The formal detailed plans used by organizations to guide their actions d. The will of top managers to change their organization - Answer a. The means by which organisations achieve their long-term objectives
Two basic questions concern corporate and business strategy: a. Where and how to compete? b. How and when to compete? c. What are the best arenas and structures to compete? d. When and where to compete? - Answer a. Where and how to compete?
A mission statement: a. is a statement of the company's values
b. is a basic statement of the organization's purpose c. outlines what the company wants to be d. articulates the company's competitive strategy - Answer b. is a basic statement of the organization's purpose
. In addition to just reading published information, to identify a firm's strategy you could a. Identify where the company is making most of its investments b. Identify where the company is doing most of its business c. Find out what new products and services the company is putting most effort into d. All of the above - Answer d. All of the above
The shift in strategy from a plan to a direction leads to: a. A downgrade its role in management b. An overt quest for flexibility and responsiveness c. A need for top managers' training d. Less work for top managers - Answer b. An overt quest for flexibility and responsiveness
As the environment becomes more turbulent, or unpredictable: a. Strategy appears to not be very useful b. Strategy remains just as vital a tool to navigate the firm through "stormy seas" c. Strategy is put into the hands of external consultants d. Strategy becomes an "impossible exercise" - Answer b. Strategy remains just as vital a tool to navigate the firm through "stormy seas"
The difference between intended and realised strategy is: a. Significant because studies suggest that only 10 to 30% of intended strategy becomes realised b. Greater in unsuccessful companies
c. Top managers' personalities d. Middle managers' autonomy - Answer b. The stability and predictability of a firm's environment
Profit-making firms are about creating value: a. This value is simply the profit generated at the end of the year b. They must create value for several stakeholder groups if this is to result in sustainable long-term profit generation c. Value to some stakeholders eg customers, may be difficult to quantify in money terms d. Both c and b - Answer d. Both c and b
The role of strategy today is claimed to be: a. A unifying role underpinning all consequent decisions b. A means by which top management can communicate and gain commitment to a sense of direction c. A means by which top management can inspire and motivate the workforce d. All of the above - Answer d. All of the above
Which of the following is a framework for categorising key elements of an organization's external environment? a. SWOT b. PEST c. The BCG matrix d. Porter's value chain - Answer b. PEST
Systematic, continual scanning of a wide range of external influences would appear desirable but: a. merely listing a large number of external factors is rarely helpful b. environmental analysis can be expensive to undertake
c. extensive scanning can result in information overload d. all of the above - Answer d. all of the above
The starting point for industry analysis is: a. Classifying the environmental influences by source b. Classifying the environmental influences by proximity c. understanding the value of the product to customers and suppliers d. understanding the value of the product to customers, the intensity of competition and the bargaining power of producers relative to their suppliers - Answer d. understanding the value of the product to customers, the intensity of competition and the bargaining power of producers relative to their suppliers
One can view the connection between the general environment and the industry environment a. The general environment is diffuse, whereas the industry environment consists of a small number of close competitors b. The industry environment consists of customers, suppliers, rivals, and new entrants, whereas the general environment comprises everything else c. The industry environment includes customers, competitors and suppliers, whereas the general environment matters to the extent that it affects the industry environment d. The critical influence of the industry environment on the wider social environment - Answer c. The industry environment includes customers, competitors and suppliers, whereas the general environment matters to the extent that it affects the industry environment
. The core of a firm's business environment is determined by: a. Its relationships with customers, competitors, and suppliers b. Its relationships with key pressure groups and shareholders c. Its relationships with its major stakeholders d. Its vision and mission - Answer a. Its relationships with customers, competitors, and suppliers
c. the extent to which the industry draws in new entrants d. the potential for one firm to dominate the industry - Answer b. overall industry profitability
. In an industry, the profits earned by firms are determined by: a. The overall economic situation, and the intensity of rivalry between established firms b. The degree of concentration of the industry and the availability of substitutes c. The existence of barriers to entry in the industry d. The value of the product for customers, the intensity of competition, and the relative bargaining powers of producers, their suppliers and their buyers - Answer d. The value of the product for customers, the intensity of competition, and the relative bargaining powers of producers, their suppliers and their buyers . The basic premise of industry analysis is that: a. Competition depends, primarily, on the number of firms within an industry b. The level of profitability within an industry is largely determined by the industry structure c. The internal variables of the firm determine a firm's performance within the industry d. Profits are squeezed by powerful suppliers - Answer b. The level of profitability within an industry is largely determined by the industry structure
Porter's 5 Forces model is intended to be: a. Used as an alternative to the earlier PEST model b. Used primarily as an academic tool c. Used in conjunction with PEST and other models d. Used to analyse industries in the 1980's and 1990's - Answer c. Used in conjunction with PEST and other models
The idea with Porter's 5 Forces is to: a. Quantify the 5 forces, to produce ideally a mathematical model of the industry
b. Identify which forces are relatively more powerful, and to assess their impact on competition and industry profitability c. Work out how management can eliminate each of the competitive forces d. Use it to construct a plan to achieve monopoly power - Answer b. Identify which forces are relatively more powerful, and to assess their impact on competition and industry profitability
. A barrier to entry is: a. Anything that facilitates the entry of would-be new entrants in a specific industry b. Capital requirements, cost advantages, and product differentiation c. A law restricting trade d. Anything that makes entry into an industry as a new competitor more difficult, more costly, slower or even impossible - Answer d. Anything that makes entry into an industry as a new competitor more difficult, more costly, slower or even impossible
If an industry earns a return on capital in excess of its cost of capital: a. Incumbents will earn abnormal profit, and build entry barriers b. The government will intervene to make sure that competition will increase c. It is likely to attract the attention of firms looking to enter the industry, which may eventually lead to the return on capital falling d. It will attract firms outside the industry, but the incumbents will have erected entry barriers - Answer c. It is likely to attract the attention of firms looking to enter the industry, which may eventually lead to the return on capital falling
Industries such as pharmaceuticals have typically earned high returns on investment because they a. have tended to be protected from competition by legal restrictions b. have spent large sums on research and development c. have tended to have high entry barriers and differentiated products d. both a and c - Answer d. both a and c
b. Legal restrictions which prevent a firm from leaving an industry c. The opposite of barriers to entry d. Of no consequence if you don't plan to leave the industry - Answer a. The non-recoverable costs of quitting or scaling down capacity in an industry
Firms in any industry can be said to operate in two major markets: a. The labour market and the output market b. As a buyer in the market for inputs, and as a seller in the output market c. The labour market and the input markets d. The product market divided in two or more segments (such as mid-size car and SUV market segments) - Answer b. As a buyer in the market for inputs, and as a seller in the output market
The overall bargaining power of buyers depends on: a. The buyer's price sensitivity b. The intensity of rivalry among sellers and the willingness of the buyer to exploit this c. The buyer's price sensitivity and the relative bargaining power between the seller and the buyer d. The intensity of rivalry among buyers and the ability to vertically integrate - Answer c. The buyer's price sensitivity and the relative bargaining power between the seller and the buyer
Bargaining power rests, ultimately, on: a. The negotiating skills of the buyer versus the seller b. Historic and accidental events c. The respective effectiveness and cohesion of top management teams d. The perceived or real threat for one party to refuse to deal with the other party - Answer d. The perceived or real threat for one party to refuse to deal with the other party
The relative bargaining power of buyers depends on:
a. The size and concentration of buyers relative to suppliers b. A buyer's access to information about products and costs c. The ability or threat to integrate vertically d. All of the above - Answer d. All of the above
The bargaining power of suppliers is likely to be high: a. When the suppliers' industry is concentrated b. When suppliers are supplying differentiated products c. When the industry with which suppliers are transacting is relatively fragmented d. All of the above - Answer d. All of the above
Which of the following changes in industry structure are likely to improve industry attractiveness: a. a change in consumer buying patterns that favours substitute products b. a wave of new entrants joining the industry c. industry consolidation through mergers and takeovers d. a and b - Answer c. industry consolidation through mergers and takeovers
To forecast industry profitability consistently accurately, professional analysts have to: a. Look at the link between performance and industry structure, then to identify major trends and to examine the link between these trends and the forces of competition b. Look at the probability of new entries in the industry, to determine the major trends, and to forecast the probable overall industry profit c. Determine the five largest players in the industry and their relative bargaining power in regards to their buyers and customers, and to identify their strengths and weaknesses d. Develop a deep understanding of how the industry creates value now and in the future, whether or not they use the tools described in chapter 2. - Answer d. Develop a deep understanding of how the industry creates value now and in the future, whether or not they use the tools described in chapter 2.
d. Then even so it's entirely possible that some firms are making very good profits - Answer d. Then even so it's entirely possible that some firms are making very good profits
"The market" and "the industry" are: a. Related but not the same thing b. Unrelated and different c. Exactly the same concept, and can be used interchangeably d. Exclusively used in marketing and strategic management respectively - Answer a. Related but not the same thing
Market and industry are: a. Very specific economics terms which must be rigidly adhered to b. Are concepts which require careful consideration of their philosophical underpinning to use correctly c. Somewhat flexible in scope depending on what aspect of business you are considering d. Close concepts where market is identified with broader sectors, while industries refer to specific technologies - Answer c. Somewhat flexible in scope depending on what aspect of business you are considering
A market's boundaries are defined by: a. The geographies of the markets that are supplied by the incumbents b. The type of product which is sold, and the type of customers willing to pay for the product c. Substitutability on the demand side and on the supply side d. Substitutability on both the demand side and the supply side, combined with an element of judgment depending on context and purpose - Answer d. Substitutability on both the demand side and the supply side, combined with an element of judgment depending on context and purpose
. In practice, drawing the boundaries of industries and markets is:
a. A matter of personal preference on behalf of top managers b. Almost impossible to carry out with rigor because it requires many "rules of thumb" and approximations c. Largely a matter of judgment and experience contingent on the purpose of the analysis d. Critical to the output of the analysis and therefore should only be undertaken with the help of an academic or consultant - Answer c. Largely a matter of judgment and experience contingent on the purpose of the analysis
A 6th force - Complements - should arguably be added to Porter's 5 Forces Model because: a. Porter's original analysis was inadequate b. It's clear that since Porter devised his model, complementers have become more important c. Porter's model was developed over 30 years ago, so is old-fashioned d. Answers b and c - Answer b. It's clear that since Porter devised his model, complementers have become more important
Analysing key success factors leads one to ask the following two questions: a. What do customers want which we could supply profitably and what should the firm do to survive competition? b. What do customers want and what type of operational changes should a firm implement to survive competition? c. Which of the five forces of competition are critical for a firm's survival and how could the firm deal with them? d. How should managers analyse information collected from the market and what should they do about it? - Answer a. What do customers want which we could supply profitably and what should the firm do to survive competition?
The question "What do customers want?": a. Is not relevant because customers will show their preferences through their behaviour b. Must be asked by managers, and an accurate answer obtained and understood, since it's the driving force behind generating profit
. Prahalad and Hamel's 1990 paper: a. Summarized the main constraints of the external environment b. Summarized the strategic positioning school's point of view c. Emphasized technological innovation as the as main source of "competitiveness" d. Was one of the papers that popularised the modern resource-based view of the firm - Answer d. Was one of the papers that popularised the modern resource-based view of the firm
The resource-based view of the firm can be described as:
a. the outside-in approach b. the inside-out approach c. the positioning approach d. the planning approach - Answer b. the inside-out approach
In fast changing environments: a. A firm should focus on its oldest markets b. A firm may define itself by its resources and capabilities c. Both a and b d. Neither a nor b - Answer b. A firm may define itself by its resources and capabilities
3M is: a. A successful conglomerate comprising a group of unrelated businesses b. A group of businesses linked by their use of glue-based technologies c. A group of businesses with an outstanding ability to develop and market new Fast Moving Consumer Products d. A group of businesses with a core capability to develop and launch new products using adhesives, thin-film coatings, and other technologies - Answer d. A group of businesses with a core capability to develop and launch new products using adhesives,
thin-film coatings, and other technologies
. In our discussion of the resource-based view of the firm, we categorise the resources of a firm as: a. Human, Intangible and Tangible b. Fixed, Variable and Human c. Human, Fungible and Tangible d. Physical, Financial, and Brand-related - Answer a. Human, Intangible and Tangible
When valuing a firm's tangible resources: a. We should take the historic cost book value b. We must update historic cost assets to current cost (modern replacement cost) assets c. We need to understand their potential for creating competitive advantage d. We need to rely on the services of professional accountants - Answer c. We need to understand their potential for creating competitive advantage
Companies' "book values" can be much less than their stock market valuations because:
a. Auditors tend to err on the conservative side b. Accountants are generally required by accounting standards to ignore the value of brands and all other reputational assets c. To be on the safe side accountants tend to undervalue brand values d. Accountants and marketing experts have different methods of valuing brands - Answer b. Accountants are generally required by accounting standards to ignore the value of brands and all other reputational assets
Brand values are a: a. Type of tangible resource b. Type of intangible resource
