8/12/2019 Practice Test Ch 1

1/3

The correct answer for each question is indicated by a .

1CORRECT Which of the following statements about a company's strategy is true?

A) Crafting an excellent strategy is more important than executing it well.

B)

Managers at all companies face three central questions in thinkingstrategically about their company's present circumstances andprospects: What's the company's present situation? Where does thecompany need to go from here? How should it get there?

C)

A company's strategy deals with whether the revenue-cost-profit economics ofits business model demonstrate the viability of the business enterprise as awhole.

D)

Masterful strategies come partly (maybe mostly) by doing things in much thesame way as the industry leader but then being better than the leader in oneparticular area that counts heavily with buyers.

E)

Whether a company's strategy is ethical or not does not matter a lot becausemost customers and most suppliers are relatively unconcerned whether a

company they do business with engages in sleazy practices or turns a blind eyeto below-board behavior on the part of its employees.

2CORRECT The competitive moves and business approaches a company's management areusing grow the business, attract and please customers, compete successfully,conduct operations, and achieve the targeted levels of organizational performanceis referred to as its

A) strategic offensive for becoming a market leader.

B) business model.

C) long-term strategic direction.

D) mission statement.

E) strategy.

3CORRECT Which one of the following is not related to actions and approaches that comprise a

company's strategy?

A) How management intends to grow the business

B)

How to prove to shareholders that the company's business model isviable

C)

How to build a loyal clientele and outcompete rivals

D) How to boost the company's performance

E)

How each functional piece of the business (R&D, supply chain activities,production, sales and marketing, distribution, finance, and human resources)will be operated

4CORRECT A company achieves sustainable competitive advantage when

8/12/2019 Practice Test Ch 1

2/3

A) it has a low-cost business model.

B) it is able to increase shareholder value.

C)

sufficient numbers of buyers believe the company has demonstrated a

commitment to environmental sustainability.

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

E)

an attractive number of buyers have a lasting preference for itsproducts or services as compared to the offerings of competitors

5CORRECT Which one of the following is not something to look for in identifying a company's

strategy?

A)

Its actions to enter new geographic or product markets or exit existing onesand its actions to form strategic alliances and collaborative partnerships

B)

Its actions to merge with or acquire another company in order to strengthenthe company's business position

C)

Its actions to capture emerging market opportunities and defend againstexternal threats to the company's business prospects

D)

The company's actions to validate and improve upon its businessmodel

E)

The actions and approaches that define how a company manages such

functions as R&D, production, sales and marketing, and finance

6CORRECT Company strategies evolve because

A)

it is a bad idea to do too much strategizing until a company has been inbusiness long enough to know what strategies will work best.

B)

most managers like to develop the strategy in bits and pieces rather than all atonce.

C)

of the ongoing need to respond to changing market conditions,advancing technology, the fresh moves of competitors, shifting buyerneeds and preferences, emerging market opportunities, new ideas forimproving the strategy, and any evidence that indicates the strategy isnot working well.

D)

many managers are conservative, preferring to carefully contemplate the bestresponses to new developments and avoiding the risks associated withdeveloping a complete strategy too quickly.

E)

a strategy does not really transition to a well-crafted stage until a company hasbeen trying to execute it for a number of years and has learned what worksand what doesn't.

7CORRECT A company's business model

A) determines whether its strategy will be ethical or not.

B)

is management's storyline for how the strategy will result in achievingsustainable competitive advantage.

C)

is management's rationale for how the strategy will be amoneymakerabsent the ability to deliver good profitability, the

strategy is not viable and the survival of the business is in doubt.

8/12/2019 Practice Test Ch 1

3/3

D)

identifies how the company plans to outmaneuver and outcompete key rivals

and become a market leader.

E)

sets forth the actions and approaches that it will rely on to earn the best profitmargins in the industry.

8

CORRECTA winning strategy is one that

A)

makes the company a market leader, is ethically and socially responsible, andmaximizes profits.

B) is highly profitable and boosts the company's market share.

C)

passes the profitability test, the ethics and social responsibility test, thecustomer satisfaction test, and the shareholder wealth test.

D)

fits the company's internal and external situation, builds sustainablecompetitive advantage, and boosts company performance.

E)

passes the ethical standards test, the competitive advantage test, and theprofitability test.

9CORRECT Crafting and executing strategy are top-priority managerial tasks because

A)

how managers go about the tasks of crafting and executing strategy sends amessage to shareholders and the entire investment community regarding"what it is we are trying to do and how we plan to achieve our objectives."

B)

The company is unlikely to be profitable unless senior executives have a clear

answer to "where are we headed, how do we plan to get there, and when dowe expect to arrive?"

C)

there is a compelling need for managers to proactively shape how thecompany's business will be conducted and because a strategy-focusedorganization is more likely to be a strong bottom-line performer.

D)

without clear guidance as to what the company's business model and strategyare, managerial decision-making is likely to be haphazard and inconsistent.

E)

a company cannot hope to be a market leader if all it does is respond tochanging market conditions, new technologies, new opportunities, andthreatening moves on the part of competitors.

10CORRECT The most trustworthy signs of a well-managed company are

A) a strong emphasis on offensive strategies rather than defensive strategies.

B)

a strategy matched to fast-evolving market conditions and bigger profitmargins than rivals and a steady upward trend in net income.

C) attractive bottom-line performance and a proven business model.

D) good strategy and good strategy execution.

E)

having a profitable business model, a willingness to change the company'sbusiness model whenever circumstances warrant, and having a sustainablecompetitive advantage.