Midterm Test PSU MGT 403

A company achieves sustainable competitive advantage when:

• it has a profitable business model.

• a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors.

• it is able to maximize shareholder wealth.

• it is consistently able to achieve both its strategic and financial objectives.

• its strategy and its business model are well-matched and in sync.

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

• Striving to be the industry’s low-cost provider, thereby aiming for a cost-based competitive advantage

• Outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, or technological superiority

• Developing competitively valuable resources and capabilities that rivals can’t easily match, copy, or trump with capabilities of their own

• Focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche

• All of these

Which of the following statements about a company’s realized strategy is true?

• A. A company’s realized strategy is mostly hidden to outside view and is deliberately kept under wraps by top-level managers.

• B. A company’s realized strategy is typically planned well in advance and usually deviates little from the planned set of actions.

• C. A company’s realized strategy generally changes very little over time unless a newly appointed CEO decides to take the company in a new direction with a new strategy.

• D. A company’s realized strategy is typically a blend of deliberate/planned initiatives and emergent/ unplanned reactive strategy elements.

• E. A company’s realized strategy is developed mostly on the fly because of the constant efforts of managers to keep rival companies at a disadvantage.

The strategic management process is shaped by:

• management’s strategic vision, strategic and financial objectives, and strategy.

• the decisions made by the compensation and audit committees of the board of directors.

• external factors such as the industry’s economic and competitive conditions and internal factors such as the company’s collection of resources and capabilities.

• a company’s customer value proposition and profit formula.

• actions to strengthen competitive capabilities and correct weaknesses, actions to strengthen market standing and competitiveness by acquiring or merging with other companies, and actions to enter new geographic or product markets.

Which one of the following is not an accurate attribute of an organization’s strategic vision?

• A. A clearly articulated view of “where we are going”

• B. Describing the company’s future product-customer-market-technology focus

• C. Pointing an organization in a particular direction and charting a strategic path for it to follow

• D. Providing managers with a reference point for making strategic decisions

• E. Outlining how the company intends to implement and execute its business model

The difference between the concept of a company mission statement and the concept of a strategic vision is that:

• a mission statement typically concerns a company’s present business scope (“who we are and what we do”) whereas the principal concern of a strategic vision is with the company’s future business scope (long term direction and future product-customer-market-technology focus).

• the mission is to make a profit, whereas a strategic vision concerns how to attract customers.

• a mission statement deals with what to accomplish on behalf of shareholders and a strategic vision concerns what to accomplish on behalf of customers.

• a mission concerns what to do to achieve short-run objectives and a strategic vision concerns what to do to achieve long-run performance targets.

• a mission statement deals with “where are we headed” whereas a strategic vision provides the critical answer to “how will we get there.”

Corporate strategy:

• is primarily concerned with strengthening a company’s market position and building competitive advantage.

• is subject to being changed much less frequently than either a company’s objectives or its mission statement.

• should be based on a flexible strategic vision and mission.

• ensures consistency in strategic approach among businesses of a diversified, multibusiness corporation.

• determines balanced scorecard financial and strategic objectives.

Which of the following is not generally on a company’s menu of actions to consider in crafting a strategy of social responsibility?

• Actions to ensure that the company operates in an honorable and ethical manner

• Actions to build a workforce that is diverse with respect to gender, race, national origin, and perhaps other personal characteristics

• Actions to look out exclusively for the best interests of shareholders

• Actions to protect or enhance the environment (apart from what is required by governmental authorities)

• Actions to create a work environment that enhances the quality of life for employees

Environmental sustainability involves:

• a corporate commitment to go beyond society’s expectations for ethical strategies and business behavior to addressing the unmet noneconomic needs of society.

• striking a balance between (1) the economic responsibility to reward shareholders with profits, (2) the legal responsibility to follow the laws in countries where it operates, (3) the ethical responsibility to abide by society’s moral norms, and (4) the discretionary philanthropic responsibility to contribute to the noneconomic needs of society.

• deliberate actions to protect the environment and provide for the longevity of resources, maintain ecological support systems for future generations, and guard against the ultimate endangerment of the planet.

• developing strategies that yield a sustainable competitive advantage that will allow the company to be sustainable for the long term.

• All of these

A company’s “macro-environment” refers to:

• the industry and competitive arena in which the company operates.

• general economic conditions plus the factors driving change in the markets being served.

• all the relevant forces and factors outside a company's boundaries–general economic conditions, population demographics, societal values and lifestyles, technological factors, and governmental legislation and regulation.

• the competitive market environment that exists between a company and its competitors.

• the dominant economic features of a company's industry