Beyond Competitive Strategy-Other Important Strategy
1
Companies are motivated to enter into strategic alliances or cooperative arrangements
A)
to collaborate on mutually-interesting technology or the development of promising new products.
B)
to improve supply chain efficiency and/or overcome deficiencies in their technical or manufacturing expertise and/or gain economies of scale in production and/or marketing.
C)
to help open up or improve access to attractive market opportunities.
D)
to gain access to technology, expertise, competitive capabilities, and other resources that will help them in racing for global leadership or in building a stronger position in the industries of the future.
E)
All of these.
2
The best strategic alliances
A)
are highly selective, focusing on particular value chain activities and on obtaining a particular competitive benefit.
B)
are those whose purpose is helping a company win the race for global market leadership.
C)
are those whose purpose is helping a company be a first-mover in establishing a leading position in an emerging industry of the future.
D)
aim at teaming up with world-class suppliers or else companies with world-class know-how in product innovation.
E)
aim at insulating the partners against the impacts of the five competitive forces and industry driving forces.
3
Companies racing against rivals for global market leadership often utilize strategic alliances and collaborative partnerships with companies in foreign countries in order to
A)
share the business risk with foreign companies and combat the bargaining power of foreign suppliers and foreign buyers.
B)
build a bigger customer base quickly.
C)
win stronger brand name recognition among foreign buyers.
D)
get into critical country markets quickly and accelerate the process of building a potent global presence, gain inside knowledge about unfamiliar markets and cultures, and access valuable skills and competencies that are concentrated in particular geographic locations..
E)
enhance its drive for global low-cost leadership by gaining better control over the cost drivers in foreign markets.
4
Which of the following is not a typical reason that many alliances prove unstable or break apart?
A)
Inability to work well together
B)
Mounting competition between one or more allies in the marketplace
C)
The emergence of more attractive technological paths that are better pursued alone or with other partners
D)
Disagreement over how the divide the added market share and profits gained from joint collaboration
E)
Diverging objectives and strategic priorities
5
Mergers and acquisitions are a much used strategy because they are an effective means of
A)
creating a more cost effective organization and gaining access to important technology.
B)
expanding a company's geographic coverage (particularly international markets) and/or extending the company's business into new product categories.
C)
revamping a company's value chain.
D)
avoiding the need to engage in outsourcing and speeding a company's shift to a best-cost provider strategy.
E)
Both A and B.
6
Vertical integration
A)
can be a good strategy if it enhances a firm's competitiveness; otherwise, it is ill-advised in part because it locks a firm into relying on its own in-house activities and sources of supply and/or distribution outlets (which later may prove more costly or inflexible than having these value chain activities performed by outsiders).
B)
is the most dependable and frequently used way to achieve a cost advantage over rivals because it increases a firm's flexibility in using its resources most advantageously.
C)
backward into the production of parts and components is a dependable and trustworthy way to reduce the costs of items purchased from suppliers (because internal manufacture is typically cheaper than outsourcing).
D)
forward into wholesale distribution and retail operations is one of the best strategic options to lowering the costs of accessing end-users and becoming the overall low-cost provider.
E)
is attractive partly because it reduces business risk and partly because it is usually the cheapest and most reliable way to obtain needed materials and components since the profits earned by suppliers can be bypassed.
7
Which of the following is not a potential advantage of backward vertical integration?
A)
Giving the firm more capability to add features that deliver greater customer value and thereby helping to achieve a differentiation-based competitive advantage
B)
Reduced risk of disruptions in the supply and delivery of crucial materials and components
C)
Reduced costs for items purchased from suppliers (if internal manufacture is more economical than buying from powerful suppliers who have big profit margins and provided entry barriers into a supplier's business are low or can be hurdled)
D)
Enhanced R&D capability and a reduced level of overall business risk because of controlling a bigger portion of the overall industry value chain
E)
Giving the firm more capability to build or strengthen certain competencies or master key skills or strategy-critical technologies.
8
Which of the following is typically the strategic impetus for forward vertical integration?
A)
Being ability to control the wholesale/retail cost drivers
B)
Reduced distribution costs because of not having to incur the costs of building and supporting an extensive network of wholesale distributors and/or retail dealers
C)
Avoiding being dependent on independent distributors/retailers who have no strong allegiance to the company's brand and who instead push whatever sells and earns them the biggest profits
D)
Gaining more control over advertising and in-store retail merchandising
E)
Allowing the firm access to greater economies of scale
9
Which of the following is not a strategic disadvantage of vertical integration?
A)
It greatly reduces the opportunity for achieving strong product differentiation over rivals.
B)
It locks a firm in to using internal sources of supply (which later may prove more costly or less flexible than outsourcing).
C)
It boosts a firm's capital investment in the industry and thus increases business risk if the industry becomes unattractive later.
D)
Integrating forward or backward can entail taking on the performance of value chain activities that require radically different skills and business capabilities than the firm possesses-so vertical integration is not always easy to do successfully.
E)
Backward vertical integration into parts and components can reduce a company's design and manufacturing flexibility, complicating the task of making desirable design changes and bringing more appealing products to market.
10
Which of the following is not an advantage of outsourcing the performance of certain value chain activities to outsiders?
A)
Being able to reduce costs by hollowing out many of the company's unnecessary capabilities and core competences
B)
Heightening the company's focus on what it does best
C)
Improving the company's ability to innovate by allying with "best-in-world" suppliers and enhancing the firm's strategic flexibility
D)
Being able to speedily and efficiently assemble diverse kinds of competitively valuable expertise
E)
Obtaining higher quality and/or cheaper components or services
11
The biggest pitfall of relying on outsiders to perform certain value chain activities is
A)
reducing a firm's direct control over important cost drivers.
B)
hollowing out a firm's own capabilities and losing touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success.
C)
weakening a company's technological know-how and R&D capability.
D)
making it harder for the company to revamp and restructure its value chain.
E)
making it more difficult for a company to achieve strong product differentiation.
12
Which of the following is not one of the basic types of strategic offensives?
A)
Offensives to match or exceed competitors' strengths and simultaneous offensives on many fronts
B)
Guerrilla offensives and end-run offensives
C)
Initiatives to change the rules of competition and alter the industry's key success factors
D)
Offensives to capitalize on competitors' weaknesses
E)
Preemptive strikes
13
Offensive initiatives to match or exceed competitor strengths make sense when
A)
a company is an industry leader; otherwise, attacking rivals where they are strongest is highly ill-advised.
B)
a company has more core competences than the competitor it opts to attack.
C)
a company has a very strongly differentiated product and can use its differentiated features to attract customer's away from the competitors it chooses to attack.
D)
a company has no choice but to try to whittle away at a strong rival's competitive advantage and/or when it is possible to gain profitable market share at the expense of rivals despite whatever resource strengths and capabilities they have.
E)
a company believes it can use its stronger brand name reputation to overpower the competitor (despite its strengths).
14
An offensive strategy that avoids direct assault on entrenched competitors and aims at capturing unoccupied or less contested market territory is best characterized as
A)
an end run offensive.
B)
a preemptive strike strategy.
C)
an attack on competitor weaknesses.
D)
a guerrilla offensive.
E)
a market expansion strategy into new geographic areas.
15
Guerilla offensives
A)
are random offensive attacks used by a low-cost or best cost provider to use one-time price cuts to steal customers away from asleep-at-the-switch rivals.
B)
involve surprise moves to secure market share leadership and then informing surprised rivals that will use deep price cuts, if necessary, to defend its newly-won position.
C)
use the hit-and-run principle and usually involve an underdog competitor trying to grab sales and market share wherever and whenever it catches rivals napping or spots a opening it can exploit.
D)
are an attractive strategy for small competitively-strong companies wanting to launch a short, swift price war to take sales and market share away from much larger rivals.
E)
work best if the guerilla is the industry's market share leader.
16
Preemptive strike strategies entail
A)
a surprise offensive attack on an industry leader's most profitable market segment.
B)
moving first to secure an advantageous position that rivals are foreclosed or discouraged from duplicating.
C)
using a distinctive competence that rivals can't match to take sales and market share away from competitively weak rivals.
D)
surprise introductions of new and very innovative products to secure market share leadership and then informing shocked rivals that it will use deep price cuts, if necessary, to defend its newly-won market-leading position.
E)
leading the industry in introducing next-generation products and putting rivals in the position of being market followers and having to scramble to imitate the leader's innovations.
17
Defensive strategies
A)
serve the purpose of helping protect competitive advantage, lowering the risk of being attacked, weakening the impact of any attack that occurs, and influencing would-be challengers to aim their attacks elsewhere; they often entail actions that signal would-be challengers that retaliation is likely.
B)
are the best ways to counter the efforts of firms trying to make market inroads with substitute products.
C)
tend to work more frequently than offensive strategies because they are usually less risky and are more likely to succeed if they are predicated on actions to capture first-mover advantages via preemptive strikes that foreclose imitation by rivals.
D)
employ efforts to block challengers from using end-run offensives and pre-emptive strike strategies and they are most likely to succeed when the defensive actions to thwart challengers stress vigorous price-cutting and added advertising.
E)
work best when they involve a combination of vertical integration, acquisition of other firms, outsourcing certain value chain activities, and strategic alliances with suppliers.
18
Which of the following is not one of the options that companies have for using the Internet to position themselves in the marketplace?
A)
Employing a brick-and-click strategy to sell direct to consumers while at the same time utilizing traditional wholesalers and retailers to access customers
B)
Operating a website that provides existing and potential customers with extensive product information but that relies on click-throughs to distribution channel partners to handle orders and transactions
C)
Using online sales as a relatively minor distribution channel for achieving incremental sales
D)
Establishing a company website to provide information about the company to investors and the general public
E)
Using the Internet as the exclusive channel for accessing buyers
19
Two big appeals of a brick-and-click strategy are
A)
lower customer service costs and more ability to achieve strong product differentiation.
B)
economically expanding a company's geographic reach and giving existing and potential customers another choice of how to communicate with the company, shop for company products, make purchases, or resolve customer service problems.
C)
the low-cost economics of establishing a Web site and the ability to use existing company store locations as "distribution centers" for filling customer orders and then scheduling them for same-day delivery.
D)
an ability to use a well-known brand name to draw buyer traffic to the company's Web site and then use the company's local store locations as pickup points for the items customers order on the Web site.
E)
the low-cost economics of establishing a Web site and low order-filling and delivery costs.
20
In which of the following situations is being first to initiate a particular move not likely to result in a positive payoff?
A)
When pioneering helps build up a firm's image and reputation with buyers
B)
When first-time buyers remain strongly loyal to a pioneering firm in making repeat purchases
C)
When late movers can copy a successful pioneer's moves quickly and at lower cost
D)
When moving first can constitute a preemptive strike, making imitation extra hard or unlikely
E)
When moving first can result in a cost advantage over rivals.