(Test Bank) Crafting & Executing Strategy: The Quest For Competitive Advantage Concepts And Cases With Connect Access Card

Thompson, 23

Business

Test Bank

23rd Edition

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Test Bank for Crafting & Executing Strategy: The Quest For Competitive Advantage Concepts And Cases With Connect Access Card, The downloadable file consists of 603 pages, and the total size of the file is 2.82 MB. Purchase now only for highly discounted price.

Author(s): Thompson

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Study Note Preview

Version 1 1 CHAPTER 1 1) What is strategy and why is it important? 2) Briefly define each of the following terms: ● sustainable competitive advantage ● deliberate strategy ● emergent strategy ● realized strategy ● abandoned strategy 3) What are the three tests of a winning strategy? 4) Identify and briefly describe the five most frequently used strategic approaches to achieving a sustainable competitive advantage. Provide examples. Version 1 2 5) What is the connection between a company's strategy and its quest for sustainable competitive advantage? 6) Provide at least two examples of a company's competitively valuable capabilities. 7) What are the three questions that managers can use to distinguish a winning strategy from a so-so or flawed strategy? Briefly explain why each question is important. 8) Should a company's strategy be tightly connected to its quest for competitive advantage? Why or why not? What difference does it make whether a company has a sustainable competitive advantage or not? Version 1 3 9) During a recession, a high-end beverage producer facing strong competition in a saturated market has decided to phase out all its flagship products and introduce a new line of second-label beverages at lower price points in reaction to its falling market share. Would this type of a reactive strategy revive its position? Why or why not? 10) Compare the business models of Gillette and Epson. 11) Why are the capabilities needed to build a sustainable competitive advantage so important to a winning business strategy? Cite one of the company examples in the chapter to illustrate your answer. Version 1 4 12) Why is a company's strategy typically a blend of proactive and reactive approaches? 13) Can an organization succeed by pursuing strategies that are proactive and reactive? Explain. 14) Explain why a company's strategy cannot be completely planned out in advance and why crafting a company's strategy cannot be a one-time, once-and-for-all managerial exercise. Identify at least three factors that account for why company strategies evolve. 15) Explain in detail what a company's business model entails. 16) What factors determine whether a strategy can be called a winning strategy? Version 1 5 17) How can a manager tell a winning strategy from a strategy that is mediocre or a loser? 18) Why is sustainable competitive advantage so important to a winning business strategy? 19) Why is it appropriate to argue that good strategy-making combined with good strategy execution are valid signs of good management? 20) Mediocre execution of a powerful strategy is a proven recipe for winning in the marketplace. True or false? Explain your answer. Version 1 6 21) Good strategy plus good strategy execution equals good management. True or false? Justify and explain your answer. 22) Apple Inc.'s strategy, outlined in Chapter 1, represents a managerial commitment to an integrated array of considered choices about how it should compete. What are the hallmarks of Apple Inc.'s strategy? 23) A new entrant in a market dominated by established players introduces itself with copycat products of another competitor. Would this strategy work in the long term for the firm? Justify your answer. Version 1 7 24) An established manufacturer and marketer of apparel and equipment for competitive sports is fast losing market share to companies that not only offer similar products, but also are upgrading their research and development capabilities to produce better products. List a few general actions and approaches that would help the established company revive its position. 25) A well-established brewery offers lower-priced beer to powerful supermarket buyers at widespread locations and has loyal distributors that supply mass goods to supermarket retailers. With fewer ways to achieve differentiation in the market, most new microbrewery entrants offer similar products but lack sufficient funding to compete against the well-established brewery. Which strategy could new microbrewers employ? Explain your answer. 26) In late June 2020, Uber consummated a deal to purchase Postmates, a mobile food delivery service, for about $2.6 billion, as the on-demand food delivery market had consolidated and Uber sought for new ways to make money. The tie-up was expected to bolster Uber’s delivery business, Uber Eats, and help the company compensate for the cratering of its core ride-hailing business, which had collapsed in many cities because of the COVID-19 pandemic in 2020. Food delivery was not yet profitable, but demand had soared while restaurants were closed and people were primarily dining at home. What type of strategy—proactive or emergent—did Uber use to try and regain a competitive advantage? Version 1 8 27) A mobile on-demand transportation company with an established brand name uses a unique mobile app and GPS mapping technology to reduce the time for drivers to pick up passengers and take them to their destinations. It then gives the mobile apps away free to all riders. Which of the five generic strategies is this company using? 28) A dining facility with multiple branches caters to newlywed couples only. The ambience, special live music arrangements for each couple, and privacy of the dining sections have become a rage among newlyweds. Which of the five generic strategies has the company used? 29) LinkedIn specializes in social networking for businesses and recruiters. Which of the five generic strategies is LinkedIn employing? 30) An electronic chip manufacturer has a quarterly release of its products. What can you say about its strategy? Version 1 9 31) A data storage company realizes that its facilities are used mostly by financial institutions. It capitalizes on the opportunity and starts storing specific financial information only and is now one of the most sought-after financial databases. What strategy has the company employed? 32) An established company in a market decides to donate a part of its profits to a children's charity to improve its market image. Soon after, it launches a website that offers new clothes, accessories, and books that could be donated to various children's charities by interested parties. The company gained positive publicity and its sales went up. What would you say about this strategy? 33) Keurig, a coffee machine manufacturer, sells high-quality espresso machines at a very low price but provides low-cost refills of varietal coffee pods at a relatively higher price than rivals. Explain this business model. Version 1 10 34) A pizza maker manufactures thin-crust pizzas and offers free soft drinks with a pack of four pan pizzas. What can you say about its Value-Price-Cost Framework? 35) A new entrant into the mobile phone market imitates its rivals' cell phones, feature for feature, but offers its products at a 20 percent discount over its rivals' prices. What can you say about the new entrant's prospects for long-term success? Version 1 11 36) During the COVID-19 pandemic, the news for American meat processers was dire. The coronavirus sickened and killed their workers, restaurants ran out of beef, and pork processors were forced to dispose of their stock due to closed processing plants. The meat industry’s troubles were thought to have provided a boost for plant-based meat substitutes, which had a jump of 35 percent in sales from February through May 2020. Impossible Foods and Beyond Meat both made products that look, cook, and taste similar to conventional meat. But their supplies are steady—and even increasing. Their factories were considered to be safer than traditional meat plants, with no coronavirus outbreaks among workers. While their meat substitute products traditionally cost more than conventional meat at the grocery stores and restaurants, these companies were able to take advantage of the situation to present a bigger value proposition to consumers. What winning strategies could account for Impossible Foods’s and Beyond Meat’s becoming standout performers in the marketplace? 37) Explain why some companies get to the top of industry rankings and stay there, while others do not. 38) In late June of 2020, lululemon, the purveyor of expensive athleisure and activewear, announced that it was betting on the future of personalized remote exercise as a way to reach customers by acquiring Mirror, a home fitness start-up that sells a $1,495 wall-mounted machine for streaming workout classes. The value of that deal was an estimated $500 million. Mirror charged customers $39 a month to stream its live or on-demand classes. The purchase was said by observers to fit with lululemon’s ambitions to become an experiential brand—from clothing to workouts to memories of those sessions—and to add Mirror’s revenue stream to that of lululemon’s. What type of generic strategy is lululemon using to sustain a competitive advantage? Version 1 12 39) Managers of all types of business organizations must develop a clear answer for which of the following questions? A) What approaches do we need to take in order to gain a competitive advantage in the marketplace? B) What is the set of actions that we need to take to outperform competitors and achieve superior profitability? C) Where are we now? D) Where do we go from here? E) When will we know that we are there? 40) Sanofi, a pharmaceutical company selling prescription drugs in France for the past 10 years, has had moderate sales in a crowded market while its rivals manufacture and market drugs having similar efficacy and safety precautions, but with superior market share. This particular pharmaceutical company's greatest challenge is to increase prescriptions of their drugs by French doctors. What would be the most effective strategy for Sanofi to improve sales performance in its existing market? A) modifying marketing communication to increase brand familiarity within key physician segments B) relocating all the existing drug manufacturing facilities to developing countries to reduce operational costs C) employing hiring plans that aim at acquiring drug designers from rival companies D) exiting the market and entering a new unexplored geographical location E) engaging in new contract talks with suppliers about price breaks Version 1 13 41) You have been hired as a consultant by SandCloud, a venture-backed established company in the beachwear and toweling markets. SandCloud’s owners are weighing a decision to donate a part of its profits to a children's charity to improve its market image. Your advice to SandCloud regarding strategy is that it will consist of the action plan management takes to A) develop a more appealing business model than rival beachwear and toweling companies. B) compete against rivals in the beachwear and toweling industry and establish a transitory competitive advantage. C) concentrate on improving its existing product offering irrespective of its decision to donate a percentage of its profits to a children’s charity. D) stake out a unique market position in beachwear and toweling markets and achieve superior profitability. E) identify its strategic vision, its strategic objectives, and its strategic intent. 42) Keurig, the coffee machine manufacturer, sells high-quality espresso machines at a very low price and also provides low-cost refills of varietal coffee pods at a relatively higher price than rivals. The action steps that Keurig’s managers take to outperform the company's competitors and achieve superior profitability are known as its A) strategy. B) mission statement. C) strategic intent. D) value-cost-price framework. E) market visioning statement. 43) Strategy, at its essence, is about A) matching rival businesses' products and quality dimensions in the marketplace. B) building profits for short-term success. C) realigning the market to provoke change in rival companies. D) developing lasting success that can support growth and secure the company's future over the long term. E) re-creating a business model with regularity. Version 1 14 44) To improve performance, there are many different avenues for outcompeting rivals, such as A) realizing a higher cost structure and lower operating profit margins than rivals in order to drive sales growth. B) creating products analogous with competitors so as to be competitive in the same markets. C) pursuing similar personalized customer service or quality dimensions as rivals. D) being undecided whether to concentrate operations on local or global markets. E) strengthening competitiveness by pursuing strategic alliances and collaborative partnerships. 45) Pizza Port, a craft brewing and pizza chain in southern California, manufactures thin-crust pizzas and offers one free pint of beer with the purchase of four large pizzas. What would you advise Pizza Port’s owners not to do to craft a strategy that will enhance its future profits? A) Establish a distribution plan to set up more rapid pizza and beer delivery than any other rivals in the region, B) Devise a social media marketing plan that aims at mass customer segments, providing them with updates on new releases of beer, attractive advertisements, and offers on products. C) Implement a diversification plan that aims at eventually adding regions outside of southern California to its existing line of products. D) Chart an acquisition plan that aims at rebranding and creating franchises with local smaller-scale pizza restaurants and craft beer taprooms that seek funding and offer attractive locations. E) Create a sales plan that aims to enhance initial sales and market penetration with low prices based on high operational costs. 46) A cleverly crafted and well-executed strategy Version 1 15 A) precludes the capture of emerging opportunities. B) produces mediocre financial performance. C) immunizes a business from changing macro-economic and market conditions. D) provides direction only in terms of what the company should do. E) can withstand the competitive challenges from rival firms. 47) A company's strategy is not concerned with management's choices about how to A) attract and please customers. B) stake out the same market position as successful rival companies. C) grow the business. D) compete successfully. E) conduct operations and improve the company's financial and market performance. 48) FaberRoad, a respected courier brand, is rapidly losing its market share to competitors who do overnight deliveries of packages or offer lower prices. The company's research department has found that many customers care more about knowing exactly when a package will arrive than getting it the next day. Which strategy would best address the current state of FaberRoad and help it regain its market? A) employing night delivery drivers at a high cost and maintenance charges B) developing radio tags that could be attached to packages to allow for real-time tracking by customers' PCs and mobile phones C) diversifying the different types of packages that can be transported and enabling booking through calls D) acquiring small transportation companies with cheaper trucks and tempos, rebranding, and using them for deliveries E) engaging in expensive advertising with new tag lines and famous celebrities to enhance its brand image in the market 49) A company's strategy stands a better chance of succeeding when