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Chapter 1 1. Crafting an ethical strategy requires that managers a.

Carefully and conscientiously consider whether each proposed strategy element can pass the test of moral scrutiny. 2. Which of the following is NOT a frequently used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage? a. Striving for 100% total customer satisfaction b. Striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins 3. A winning strategy is one that a. Fits the company internal and external situation, helps build sustainable competitive advantage, and improves company performance b. Fits the companys situation, helps build sustainable competitive advantage, and results in better company performance. 4. The difference between a companys business model and a companys strategy is that a. Its business model related to managements blueprint for delivering a valuable product or service to customers in a manner that will generate ample revenues to cover costs and yield an attractive profit while its strategy relates to the companys competitive moves and business approaches (which may or may not lead to profitability) b. Strategy relates broadly to a companys competitive moves and business approaches (which may or may not lead to profitability) while its business model relates to managements blueprint for delivering a valuable product or service to customers in a manner that will generate ample revenues to cover costs and yield an attractive profit. 5. A companys strategy consist of a. The competitive moves and business approaches that managers are employing to grow the business, attract and please customers, compete successfully, conduct operations, achieve the targeted levels of performance.

Chapter 1 6. A companys business model a. Sets forth how its strategy and business approaches will create value for customers while at the same time generating ample revenues to cover costs and realize a profit. 7. In crafting a strategy, management is in effect saying a. Among all the many different business approaches and ways of competing we could have chosen, we have decided to employ this particular combination of competitive and operating approaches in moving the company in the intended direction, strengthening its market position and competiveness, and boosting performance. 8. A companys strategy evolves from one version to the next because of a. The proactive efforts of company managers to improve this or that aspect of the strategy, a need to respond to changing customer requirements and expectations, and a need to react to fresh strategic maneuvers on the part of rival firms. 9. According to Figure 1.1, which of the following is NOT something to look for identifying a companys strategy? a. Actions to boost the companys stock price 10. Which of the following is NOT a reason that a companys strategy evolves over time? a. The importance of always introducing new ways to cut costs and boost profitability. 11. A companys achieves sustainable competitive advantage when a. An attractive number of buyers have a lasting preference for its products or services as compared to the offerings of competitors. 12. In choosing among strategy alternatives, company managers a. Are well-advised to go beyond merely keeping a companys strategic actions within the bounds of what is legal and consider whether the various pieces of the companys strategy are compatible with ethical standards of right and wrong and duty-what a company should and should not do.

Chapter 1 13. Typically, a companys strategy is a. A blend of (1) proactive actions to improve the companys financial performance and secure a competitive edge and (2) as-needed reactions to unanticipated developments and fresh market conditions. 14. The two crucial elements of a companys business model are a. Its customer value proposition (the buyer wants and needs it seeks to satisfy whether customers will consider the price charged to be a good value) and its formula for generating profits (the strategy, key resources, and business processes it will utilize to generate the sales volumes and profit margins needed to yield good profits). 15. Excellent execution of an excellent strategy a. Is the BEST TEST of managerial excellence 16. A companys strategy concerns (similar to question 5) a. Managements actions plan for running the business and conducting operations-its commitment to pursue a particular set of actions in growing the business, attracting and pleasing customers, competing successfully, conducting operations, and achieving the targeted levels of performance. 17. A companys strategy can be considered ethical a. If it does not entail actions or behaviors that cross the moral line from should do to should not do (because such actions are unsavory, unconscionable, injurious to others, or unnecessarily harmful to the environment) and if it allows management to fulfill its ethical duties to all stakeholders (shareholders, employees, customer, suppliers, the communities in which it operates, and society at large.) 18. Good strategy combined with good strategy execution a. Are the most trustworthy signs of good management 19. Which of the following is not something a companys strategy is concerned with? a. How quickly and closely to copy the industrys leaders product quality and approach to customer service

Chapter 1 20. Changing circumstances and ongoing managerial efforts to improve the strategy a. Account for why a companys strategy evolves over time 21. The heart and soul of a companys strategy-making effort a. Involves coming up with moves and actions that produce a durable competitive edge over rivals. 22. It is normal for a companys strategy to end up being (similar to question 8 & 13) a. A blend of proactive actions to improve the companys competitiveness and financial performance and as-needed reactions to unanticipated developments and fresh market conditions. 23. Which one of the following does NOT account for why a companys strategy over time, as shown in figure 1.2 (similar to question 10) a. Managerial boredom and a desire to develop new or different strategy elements