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STRATEGIC MANAGEMENT EXAM 2
ASSIGNMENTS QUESTIONS & ANSWERS(RATED
A+)
Chapter 5
"The primary objective of deploying a defensive strategy is to - Correct Answer lower the risk of being
attacked, to weaken the impact of any attack that occurs, and to influence challengers to aim their efforts at other rivals."
"Merger and acquisition strategies - Correct Answer are often driven by such strategic objectives as to
expand a company's geographic coverage or extend its business into new product categories" "Bumble, a digital dating site where women make the first move, specifically uses which strategic
weapon in its offensive arsenal? - Correct Answer Launching a preemptive strike to capture an
industry's limited resources or capture a rare opportunity" "Frank the baker has imported some specialty baking flour from Italy that is especially prized by Sarah.
Frank's use of this flour, in his transaction with Sarah, should impact the - Correct Answer reservation
price" "What are the two ways a company can translate its low-cost advantage over rivals into attractive profit
performance? - Correct Answer either using its low-cost edge to underprice competitors and attract
price-sensitive buyers in large enough numbers to increase total profits or refraining from price cutting and using the low-cost advantage to earn a bigger profit margin on each unit sold"
"The strategic target of a best-cost provider is - Correct Answer value-conscious buyers in a middle-
market range"
"A decentralized organizational structure - Correct Answer draws on the combined intellectual capital
of all its employees to outperform a command-and-control company."
"Greater task specialization is afforded by what form of organization? - Correct Answer departmental
structures, unitary structures, or U-forms" "Which strategic approach works best when price competition among rival sellers is vigorous, the
market is large, and there are few ways to achieve product differentiation? - Correct Answer low-cost
provider strategy" "Vanguard has achieved a low-cost advantage over its rivals in the investment management industry
through which of the following? - Correct Answer underpricing rivals to attract price-sensitive buyers"
"Vanguard's low-cost advantage results primarily from its ability to do which of the following? - Correct
Answer do a better job than rivals of performing value chain activities cost efficiently"
"Vanguard has been particularly effective in managing which of the following value chain cost drivers? -
Correct Answer economies of scale, learning and experience, capacity utilization, communication
systems, and information technology" "A low-cost provider strategy is appropriate for use in the investment management industry for all
except which of the following choices? - Correct Answer consumer buyers, who have significant power
to bargain down prices"
"In what way has Vanguard failed to some degree in the execution of its low-cost provider strategy? -
Correct Answer Vanguard has not failed in the execution of its low-cost provider strategy."
"A company achieves low-cost leadership when it - Correct Answer becomes the industry's lowest-cost
provider rather than just being one of several competitors with comparatively low costs." "Firms focusing on operating a cost leadership strategy are most likely to develop their product or
service to emphasize the - Correct Answer functional aspects"
"Mont Blanc uses a differentiation strategy that focuses on the social and emotional aspects of their product to appeal to a specific consumer segment. Which of the following initiatives would most be in
keeping with their strategy? - Correct Answer an engraving service for pen owners who may wish to
will their pens to loved ones"
"Which of the following would NOT be a reason for Bic to decide to compete in Mont Blanc's market? -
Correct Answer Bic is a large publicly traded company with significant financial resources."
"What best-cost provider strategy would you be most unlikely to recommend for a small-sized company
entering a highly segmented market, each segment with a complex set of needs and spending power? -
Correct Answer evolving the capabilities to simultaneously deliver lower cost and
higher-quality/differentiated features"
"Which of the following is not a route to achieving a differentiation-based competitive advantage? -
Correct Answer separating marketing from brand-building activities"
"Southwest Airlines' low-cost advantage results primarily from its ability to - Correct Answer outdo its
rivals in performing value chain activities cost efficiently." "Hilton Hotels has diversified its lodging brands by adding Curio Collection, Tapestry Collection, and Canopy by Hilton, properties that offer stylish, distinctive decors and personalized services that appeal to young professionals seeking distinctive lodging alternatives. Managers can enhance the
"What value chain segments has Tesla chosen to enter and perform internally? - Correct Answer Tesla
has chosen vertical integration both backward and forward in the value chain to achieve multiple strategic goals. From component manufacturing like batteries, all the way through owning the distribution sales and servicing network"
"How has vertical integration aided the organization in building competitive advantage? - Correct
Answer Owning the distribution, sales, and servicing of the vehicles improves the customer experience.
Closer relationships between engineering and manufacturing give Tesla greater control over product design. In-house manufacturing of key components and new parts that require frequent updates has enabled the company to learn quickly and launch new versions faster. All of these choices are correct."
"Has vertical integration strengthened its market position? - Correct Answer Yes. Tesla's vertical
integration strategy has enabled it to quickly roll out innovative new products and launch the network that is required for widespread vehicle adaption."
"Conditions that create first-mover advantages include all of the following except - Correct Answer the
costs of pioneering are high relative to the benefits accrued." "Samsung Group's ecosystem of over 1,300 partnerships that enable productive activities, from global
procurement to local marketing to collaborative R&D, is considered to have been - Correct Answer
successful in creating strategic alliances." "Compared to vertical integration or horizontal mergers/acquisitions strategies, the principal advantages
of joint venture partnerships and alliances include - Correct Answer potential resource pooling and risk
sharing, more adaptive response capabilities, and greater speed of deployment."
"All the following are signals to would-be challengers that retaliation is likely except - Correct Answer
creating collaborative relationships with other industry leaders to block new entrants." "The extent to which a firm engages in the various value chain activities, from initial activities all the way
to after-sales activities, is called - Correct Answer vertical scope"
"Chapter 8 - Correct Answer ..."
"A "cash hog" type of business - Correct Answer generates cash flows that are too small to fully fund
its operations and growth."
"ITT's portfolio of business units reflects a strategy of - Correct Answer combination of related and
unrelated diversification."
"combination of related and unrelated diversification. - Correct Answer provide low-level oversight
and make available minimal corporate resources" "__________ could potentially be achieved through cost reductions stemming from strategic fit along
the value chains of ITT's businesses. - Correct Answer Economies of scope"
"When Frank sells a pie to Jean instead of Sarah, the economic value created in society is lower because
of the difference in - Correct Answer consumer surplus"
"Frank the baker has been growing the number of pies he has been selling so much that he is now able
to negotiate more favorable terms from his suppliers. This change is likely to impact - Correct Answer
producer surplus"
"The drawbacks of an unrelated diversification strategy include - Correct Answer very demanding
managerial requirements and limited competitive advantage potential."
"Corporate Strategy helps managers understand which strategy question? - Correct Answer Where
should the firm compete?"
"Disney's expansion from short films to animated films to live action films to television is an example of -
Correct Answer expansion into new markets by leveraging a core capability."
"Disney's ability to leverage its characters across its network of theme parks, media networks and
movies, and consumer products is an example of a corporate - Correct Answer parenting advantage"
"The procedure for evaluating a diversified company's strategy does not entail - Correct Answer
determining the degree of risk involved with each business unit."
"Corporate restructuring strategies - Correct Answer radically alter the business lineup by divesting
poor performers and acquiring new promising businesses."
"Cost reductions stemming from strategic fit along the value chains of related businesses can result in -
Correct Answer economies of scope."
"Unrelated diversification requires that company managers spend much time and effort screening
acquisition candidates using all of the following criteria except - Correct Answer whether the business
has a cross-business strategic fit."
"How has Zara gone about building an organization capable of proficient strategy execution? - Correct
Answer by tightly aligning design, production, advertising, and real estate with the overall strategy of
fast fashion"
"When assembling a capable management team, the most important consideration is to recruit people -
Correct Answer who are clear thinkers, are capable of figuring out what needs to be done, are good at
managing people, and are skilled in delivering good results." "What business case would you not likely make to Costco to decentralize its organizational structure and
empower its employees? - Correct Answer Decentralized organizational structures can impair cross-
unit collaboration." "Successful execution of Deloitte's talent management strategy included all of the following elements
except - Correct Answer sanctions placed on employees for missed deadlines, misdirected or wasteful
efforts, or managerial ineptness." "Imagine you have been asked to present a strategy implementation plan to the top management of Patagonia, a Los Angeles, California-based manufacturer and marketer of outdoor activewear and extreme adventure gear. Which implementation option would your presentation likely not include as a
means of building and strengthening Patagonia's competitively valuable resources and capabilities? -
Correct Answer Patagonia needs to shift from decentralized to centralized decision-making to give
senior executives more authority and control in driving cultural change." "Which of the following statements about recruiting, training, and retaining capable employees is not
accurate? - Correct Answer It is important to let people to do what they do best rather than encourage
them to experiment with different job functionalities." "An organizational structure that is common among companies pursuing some form of diversification
strategy or global strategy is called a _________ structure. - Correct Answer multidivisional"
"Practices companies use to recruit, train, and retrain the most capable people they can find involve all
of the following except - Correct Answer putting employees through short-term training programs, but
focusing on the top 10 percent and providing them with challenging, interesting, and skill-stretching assignments."
"The strategy execution process normally does not involve - Correct Answer implementing a
management development plan to groom future executives."
"A disadvantage of a simple structure reflects the - Correct Answer fact that the flat structure may be
inadequate as the organization grows."
"Claire is establishing lines of authority and reporting relationships within the finance department in her
company. Which of the following organization-building actions is Claire undertaking? - Correct Answer
structuring the organization and work effort"
"A primary advantage of a centralized organization structure is that it - Correct Answer allows for quick
decision making and strong leadership in crisis situations."
"A network structure consists of - Correct Answer the arrangement of linking several independent
organizations involved in some common undertaking, with one firm typically in a more central role." "According to ITT's website, the company began as a telephone and telegraph company; in the 1960s and 1970s it acquired businesses such as Sheraton Hotels, Avis Rent-a-Car, Hartford Insurance, and Continental Baking (the makers of Wonder Bread). These acquisitions, which were later divested,
reflected a strategy of - Correct Answer mostly unrelated diversification."
"Imagine that you are the CEO of a multinational corporate consumer food company. What would make it attractive to you to consider related diversification via acquisition, rather than unrelated diversification into a new industry, such by forming an internal startup subsidiary to enter and compete
in the target industry? - Correct Answer when the incumbent industry enables your company to create
strategic fits with the acquired firm to exploit cross-business value chain activities and resource similarities that could lead to more efficient production, distribution, and sale of profitable processed food products"
