Stakeholders
All of the following ARE external stakeholders except:
Customers, creditors, alliance partners, competitors
competitors
Which of the following tasks in the AFI strategy framework involves evaluating the internal and external environments in which a firm operates?
A. Analysis
B. Formulation
C. Implementation
D. Competitive advantage
Analysis
Which of the following is an assumption that top-down strategic planning rests on?
A. Decisions made in the past do not affect our future.
B. Time cannot be compressed at will.
C. We can predict the future from the past.
D. Change is constant.
C. We can predict the future from the past.
For a firm that operates in an industry where competition is high, which of the following practices will result in inferior performance?
A. trying to be everything to everybody by combining different competitive strategies
B. choosing a distinct but different strategic position in the industry
C. focusing on creating value for customers rather than destroying rivals
D. working toward increasing the difference between value creation and cost
A. trying to be everything to everybody by combining different competitive strategies
A firm is required by society and its shareholders to meet its ethical and philanthropic responsibilities.
True
False
False
Because they are a crucial component of a firm's success, customers are considered internal stakeholders.
True
False
False
Managers use the AFI strategy framework to
A. minimize the wealth of their shareholders.
B. help their business achieve and sustain competitive parity.
C. help reduce the economic contribution of their business.
D. explain and predict differences in firm performance.
D. explain and predict differences in firm performance.
The goal of a good strategy is focused primarily on
A. creating superior value while containing costs
B. making as much money as possible
C. employing lean manufacturing and Six Sigma
D. encouraging investors to buy more shares of the firm
A. creating superior value while containing costs
If a company wants to gain a competitive advantage in a highly competitive industry, it should ideally
A. stake out a unique position within the industry.
B. execute an integrated cost-leadership and differentiation position.
C. provide goods or services similar to its competitors at higher prices.
D. copy the strategies of other firms through competitive benchmarking.
A. stake out a unique position within the industry.
James is a firm believer in Milton Friedman's view of a firm's social obligations. With which of the following statements is Arnold most likely to agree?
A. Firms must go beyond their economic responsibility and act in socially responsible ways.
B. Businesses can use their resources to create profit as long as they do so within the rules of the game.
C. Businesses should engage in open and free competition without deception or fraud, only as long as their competitors do so.
D. Firms should define value creation broadly in terms of environmental impact.
B. Businesses can use their resources to create profit as long as they do so within the rules of the game.
According to the perspective of shareholder capitalism, shareholders in public stock companies
have significant decision-making power.
have the most legitimate claim on profits.
are restricted from buying shares of two competing companies.
have unlimited financial liability.
have the most legitimate claim on profits.
In the AFI strategy framework, strategy analysis primarily involves
A. evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competitive advantage.
B. deciding the type of corporate governance that would be most effective in the implementation of a strategy.
C. designing a business, corporate, and global strategy to gain and sustain a competitive advantage.
D. organizing a firm in order to effectively put the formulated strategy into practice.
A. evaluating the effects of internal resources and core competencies on a firm's potential to gain and sustain a competitive advantage.
Which of the following stages of the strategic management process involves an evaluation of a firm's external and internal environments?
A. strategy control
B. strategy formulation
C. strategy analysis
D. strategy implementation
C. strategy analysis
Which of the following is true of the process of organizing for competitive advantage?
A. Organizing for competitive advantage is a static and not a dynamic process.
B. Strategy formulation and strategy implementation are independent activities.
C. To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes.
D. Formulating an effective strategy is a necessary and sufficient condition for gaining and sustaining competitive advantage.
C. To maintain competitive advantage, companies need to restructure as they grow and the competitive environment changes.
The name for an agreed-upon code of conduct in business, based on societal norms, is
A. fiduciary responsibilities.
B. business ethics.
C. poison pills.
D. strategic business points.
B. business ethics.
All of the following are examples of external-governance mechanisms except
shareholders.
industry analysts.
auditors.
government regulators.
shareholders
You are the manager in charge of setting the strategy for a new fast-casual restaurant. Which of the following questions would be appropriate for you to ask during the analysis phase of the AFI strategy framework?
A. How have consumer preferences in the fast-casual restaurant industry changed in the last five years?
B. Should we be competing nationally or internationally?
C. Can we secure relationships with enough organic farmers to meet our commitment to using the healthiest ingredients?
D. Should we open our first location in Los Angeles or New York City?
A. How have consumer preferences in the fast-casual restaurant industry changed in the last five years?
Strategic commitments are actions that are
A. inexpensive, long-term-oriented, and difficult to reverse.
B. inexpensive, short-term-oriented, and easy to reverse.
C. costly, short-term-oriented, and easy to reverse.
D. costly, long-term-oriented, and difficult to reverse.
D. costly, long-term-oriented, and difficult to reverse.
The average cost of production for a bottle of vitamin water in the industry is $5 while its average price is $8. Facuet H20 Inc. manufactures the same product for $3 per bottle and sells it for $8 per bottle. Which of the following statements is most likely true of Facuet H20 Inc. in this scenario?
A. It has a competitive advantage in the industry.
B. It has a competitive disadvantage in the industry.
C. It has competitive parity with other firms in the industry.
D. It has formed a strategic alliance with other firms in the industry.
A. It has a competitive advantage in the industry.
One way to foster ethical behavior in employees is to
A. avoid codifying organizational culture.
B. view clients as counter parties to transactions.
C. create a control system that encourages desired values.
D. align the vision statement of the organization with its informal culture.
C. create a control system that encourages desired values.
Which of the following statements is true of shareholders in a public stock company?
They are appointed by a board of directors to oversee the company's management.
They are granted a charter of incorporation by the state and legally own company stock.
They directly supervise and coordinate the manufacture of products and delivery of services.
They are the centerpiece of corporate governance.
They are granted a charter of incorporation by the state and legally own company stock.
While creating its AFI strategy framework, Gordon's Consultants decided what markets the firm should compete in. By doing this, what type of strategy did the company devise?
A. global strategy
B. corporate strategy
C. ethical strategy
D. business strategy
B. corporate strategy
Which of the following summarizes the difference between corporate strategy and business strategy?
A. Corporate strategy deals with how to compete; business strategy deals with when to compete.
B. Corporate strategy deals with where to compete; business strategy deals with how to compete.
C. Corporate strategy deals with how to compete; business strategy deals with where to compete.
D. Corporate strategy deals with when to compete; business strategy deals with how to compete.
B. Corporate strategy deals with where to compete; business strategy deals with how to compete.
How has Apple been able to sustain its competitive advantage in the smartphone industry?
A. by targeting its new products and services toward laggards
B. by reducing its network effects
C. by driving the price for the end user to zero
D. by regularly introducing incremental improvements in its products
D. by regularly introducing incremental improvements in its products
Ethics is
A. the minimum acceptable standard in business practice.
B. universal and cannot differ between cultures.
C. not synonymous with law.
D. impossible to codify into law.
C. not synonymous with law.