Question 1.
Which of the following actions is something a company should consider when crafting an environmental-sustainability strategy?
A. Working to provide for the longevity of natural resources
B. Investing in sustainable technologies only if the country in which the company operates supports these technologies
C. Making contributions to the Global Environmental Council that are distributed on a competitive basis
D. Prioritizing operations in ecological support systems that support the greatest business growth
Question 2
Diversification should be considered when a company
A. is under the gun to create a more attractive and cost-efficient value chain.
B. has run out of ways to achieve a distinctive competence in its present business.
C. begins to encounter diminishing growth prospects in its mainstay business.
D. lacks sustainable competitive advantage in its present business.
Question 3
Which one of the following is a key element of integrated social-contracts theory?
A. Integrated social-contracts theory rejects the slippery slope of ethical relativism and embraces ethical universalism.
B. Universal ethical norms always take precedence over local ethical norms.
C. Ethical principles at the country level outweigh universal principles.
D. Bribes and kickbacks aren't considered part of the theory since they aren't universally banned.
4. To create value for shareholders via diversification, a company must
A. diversify into businesses that can perform better under a single corporate umbrella than they could perform operating as independent, stand-alone businesses.
B. diversify into industries that are growing rapidly.
C. get into new businesses that are profitable.
D. spread its business risk across various industries by only acquiring firms that are strong competitors in their respective industries.
5. The advantages of using an export strategy to build a customer base in foreign markets include
A. minimizing shipping costs and the effects of fluctuating exchange rates.
B. minimizing risk and capital requirements.
C. being cheaper and more cost effective than licensing and franchising.
D. being cheaper and more cost effective than a multicountry strategy.
6. In which of the following cases are late-mover advantages (or first-mover disadvantages) not likely to arise?
A. when opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand
B. when the costs of pioneering are much higher than being a follower and only negligible learning/experience benefits accrue to the pioneer
C. when the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover
D. when the pioneer's products are somewhat primitive and are easily bested by late movers
7. The definition of business ethics is
A. developing a consensus among companies worldwide as to what ethical principles businesses should be expected to follow in their operations.
B. the application of general ethical principles to the actions and decisions of companies and the conduct of the workforce.
C. developing a special set of ethical standards for businesses to observe in conducting their affairs.
D.ethical behavior expectations of company personnel in the course of doing their jobs.
8. It becomes particularly urgent for a company to consider diversification when there are
A. opportunities to lower costs by entering closely related businesses.
B. diminishing market opportunities and stagnating sales in its principal business.
C. opportunities to leverage existing competencies and capabilities by expanding into businesses where these same resources are key success factors and valuable competitive assets.
D. opportunities to transfer a powerful and well-respected brand name to the products of other businesses and thereby increase the sales and profits of these newly entered businesses.
9. The chief difference between a low-cost provider strategy and a focused low-cost strategy is
A. the size of the buyer group to which a company is trying to appeal.
B. the type of value chain being used to achieve a low-cost competitive advantage.
C. whether the product is strongly differentiated or weakly differentiated from rivals.
D. the degree of bargaining power that buyers have.
10. Which of the following is the best example of related diversification?
A. A PC producer diversifying into producing its own brands of MP3 players and LCD TVs.
B. A manufacturer of canoes diversifying into the production of tennis rackets.
C. A beer brewer acquiring a maker of aluminum cans.
D. A producer of golf clubs and golf bags acquiring a maker of digital cameras.
11. How do ethical principles apply to businesses?
A. They chiefly deal with the actions and behaviors required to operate companies in a socially responsible manner.
B. They're generally less stringent than the ethical principles for society at large.
C. They chiefly deal with the rules each company's top management and board of directors make about "what is right" and "what is wrong."
D. They're not materially different from ethical principles in general.
12. Multidomestic competition is best characterized as a situation in which
A. there are extensive trade restrictions, sharply fluctuating exchange rates, and high-tariff barriers in many country markets that work against the formation of a true world market.
B. the competitive arena among rival companies involves several neighboring countries rather than either a single country or the world market as a whole.
C. competition is mainly among the domestic companies of a few neighboring countries (five countries at most).
D. there's no international or global market, just a collection of mostly self-contained country markets.
13. Market size and growth rates in different countries can be influenced positively or negatively by
A. the ability of management to tailor a strategy to take into consideration differences among country markets.
B. which countries have the weakest foreign rivals.
C. differing population sizes, cultures, income levels, infrastructure, and distribution networks among countries.
D. competitive rivalry that is only moderate in some countries.
14. _______ is one of the five generic types of competitive strategy a company is following when it offers a better tasting product at a high premium.
A. Broad differentiation
B. Market-share dominator
C. Focused low-cost provider
D. Best-cost provider
15. A focused low-cost strategy seeks to achieve competitive advantage by
A. outmatching competitors in offering niche members an absolute rock-bottom price.
B. performing the primary value-chain activities at a lower cost per unit than can the industry's low-cost leaders.
C. serving buyers in the target market niche at a lower cost and lower price than rivals.
D. dominating more market niches in the industry via a lower cost and a lower price than any other rival.
16. Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition
A. are generally advocates of the ethical relativism school of thought.
B. are out-of-step with business reality given that the preponderance of company managers are immoral.
C. face a particularly vexing problem of losing business to competitors that have no scruples—an outcome that penalizes ethical companies and company personnel.
D. are misguided in their efforts because bribes and kickbacks are really no different from tipping for service at restaurants as you pay for a service rendered.
Question 17.
Which of the following actions is typically the strategic impetus for forward-vertical integration?
A. Fewer disruptions in the delivery of the company's products to end-users
B. Being able to control the wholesale/retail portion of the industry value chain
C. Allowing the firm access to greater economies of scale
D. Gaining better access to end-users and better market visibility
18. A company's competitive strategy should
A. be supportive with its objective to become at least an average performer within its industry.
End of exam
B. be well matched to its resources and capabilities in order to incorporate standard attributes into its product offering.
C. be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies.
D. ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves.
19. Achieving a cost advantage over rivals entails
A. producing a standard product, redesigning the product infrequently, and having minimal advertising.
B. being a first-mover in pursuing backward and forward integration and controlling as much of the industry value chain as possible.
C. out-managing rivals in performing value-chain activities in a cost effective manner and finding creative ways to cut cost-producing activities out of the value chain.
D. concentrating on the primary activities portion of the value chain and outsourcing all support activities.
20. A company will likely have success in sustaining competitive advantage whenever it
A. has resources and capabilities that don't have substitutes and rivals have trouble duplicating.
B. has a well-known and well-regarded brand name, prefers offensive strategies to defensive strategies, and has a strong balance sheet.
C. is the acknowledged market-share leader.
D. is the industry's acknowledged technology leader
Which of the following actions is something a company should consider when crafting an environmental-sustainability strategy?
A. Working to provide for the longevity of natural resources
B. Investing in sustainable technologies only if the country in which the company operates supports these technologies
C. Making contributions to the Global Environmental Council that are distributed on a competitive basis
D. Prioritizing operations in ecological support systems that support the greatest business growth
Question 2
Diversification should be considered when a company
A. is under the gun to create a more attractive and cost-efficient value chain.
B. has run out of ways to achieve a distinctive competence in its present business.
C. begins to encounter diminishing growth prospects in its mainstay business.
D. lacks sustainable competitive advantage in its present business.
Question 3
Which one of the following is a key element of integrated social-contracts theory?
A. Integrated social-contracts theory rejects the slippery slope of ethical relativism and embraces ethical universalism.
B. Universal ethical norms always take precedence over local ethical norms.
C. Ethical principles at the country level outweigh universal principles.
D. Bribes and kickbacks aren't considered part of the theory since they aren't universally banned.
4. To create value for shareholders via diversification, a company must
A. diversify into businesses that can perform better under a single corporate umbrella than they could perform operating as independent, stand-alone businesses.
B. diversify into industries that are growing rapidly.
C. get into new businesses that are profitable.
D. spread its business risk across various industries by only acquiring firms that are strong competitors in their respective industries.
5. The advantages of using an export strategy to build a customer base in foreign markets include
A. minimizing shipping costs and the effects of fluctuating exchange rates.
B. minimizing risk and capital requirements.
C. being cheaper and more cost effective than licensing and franchising.
D. being cheaper and more cost effective than a multicountry strategy.
6. In which of the following cases are late-mover advantages (or first-mover disadvantages) not likely to arise?
A. when opportunities exist for a blue-ocean strategy to invent a new industry or distinctive market segment that creates altogether new demand
B. when the costs of pioneering are much higher than being a follower and only negligible learning/experience benefits accrue to the pioneer
C. when the marketplace is skeptical about the benefits of a new technology or product being pioneered by a first-mover
D. when the pioneer's products are somewhat primitive and are easily bested by late movers
7. The definition of business ethics is
A. developing a consensus among companies worldwide as to what ethical principles businesses should be expected to follow in their operations.
B. the application of general ethical principles to the actions and decisions of companies and the conduct of the workforce.
C. developing a special set of ethical standards for businesses to observe in conducting their affairs.
D.ethical behavior expectations of company personnel in the course of doing their jobs.
8. It becomes particularly urgent for a company to consider diversification when there are
A. opportunities to lower costs by entering closely related businesses.
B. diminishing market opportunities and stagnating sales in its principal business.
C. opportunities to leverage existing competencies and capabilities by expanding into businesses where these same resources are key success factors and valuable competitive assets.
D. opportunities to transfer a powerful and well-respected brand name to the products of other businesses and thereby increase the sales and profits of these newly entered businesses.
9. The chief difference between a low-cost provider strategy and a focused low-cost strategy is
A. the size of the buyer group to which a company is trying to appeal.
B. the type of value chain being used to achieve a low-cost competitive advantage.
C. whether the product is strongly differentiated or weakly differentiated from rivals.
D. the degree of bargaining power that buyers have.
10. Which of the following is the best example of related diversification?
A. A PC producer diversifying into producing its own brands of MP3 players and LCD TVs.
B. A manufacturer of canoes diversifying into the production of tennis rackets.
C. A beer brewer acquiring a maker of aluminum cans.
D. A producer of golf clubs and golf bags acquiring a maker of digital cameras.
11. How do ethical principles apply to businesses?
A. They chiefly deal with the actions and behaviors required to operate companies in a socially responsible manner.
B. They're generally less stringent than the ethical principles for society at large.
C. They chiefly deal with the rules each company's top management and board of directors make about "what is right" and "what is wrong."
D. They're not materially different from ethical principles in general.
12. Multidomestic competition is best characterized as a situation in which
A. there are extensive trade restrictions, sharply fluctuating exchange rates, and high-tariff barriers in many country markets that work against the formation of a true world market.
B. the competitive arena among rival companies involves several neighboring countries rather than either a single country or the world market as a whole.
C. competition is mainly among the domestic companies of a few neighboring countries (five countries at most).
D. there's no international or global market, just a collection of mostly self-contained country markets.
13. Market size and growth rates in different countries can be influenced positively or negatively by
A. the ability of management to tailor a strategy to take into consideration differences among country markets.
B. which countries have the weakest foreign rivals.
C. differing population sizes, cultures, income levels, infrastructure, and distribution networks among countries.
D. competitive rivalry that is only moderate in some countries.
14. _______ is one of the five generic types of competitive strategy a company is following when it offers a better tasting product at a high premium.
A. Broad differentiation
B. Market-share dominator
C. Focused low-cost provider
D. Best-cost provider
15. A focused low-cost strategy seeks to achieve competitive advantage by
A. outmatching competitors in offering niche members an absolute rock-bottom price.
B. performing the primary value-chain activities at a lower cost per unit than can the industry's low-cost leaders.
C. serving buyers in the target market niche at a lower cost and lower price than rivals.
D. dominating more market niches in the industry via a lower cost and a lower price than any other rival.
16. Multinational companies that forbid the payment of bribes and kickbacks in their codes of ethical conduct and that are serious about enforcing this prohibition
A. are generally advocates of the ethical relativism school of thought.
B. are out-of-step with business reality given that the preponderance of company managers are immoral.
C. face a particularly vexing problem of losing business to competitors that have no scruples—an outcome that penalizes ethical companies and company personnel.
D. are misguided in their efforts because bribes and kickbacks are really no different from tipping for service at restaurants as you pay for a service rendered.
Question 17.
Which of the following actions is typically the strategic impetus for forward-vertical integration?
A. Fewer disruptions in the delivery of the company's products to end-users
B. Being able to control the wholesale/retail portion of the industry value chain
C. Allowing the firm access to greater economies of scale
D. Gaining better access to end-users and better market visibility
18. A company's competitive strategy should
A. be supportive with its objective to become at least an average performer within its industry.
End of exam
B. be well matched to its resources and capabilities in order to incorporate standard attributes into its product offering.
C. be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies.
D. ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves.
19. Achieving a cost advantage over rivals entails
A. producing a standard product, redesigning the product infrequently, and having minimal advertising.
B. being a first-mover in pursuing backward and forward integration and controlling as much of the industry value chain as possible.
C. out-managing rivals in performing value-chain activities in a cost effective manner and finding creative ways to cut cost-producing activities out of the value chain.
D. concentrating on the primary activities portion of the value chain and outsourcing all support activities.
20. A company will likely have success in sustaining competitive advantage whenever it
A. has resources and capabilities that don't have substitutes and rivals have trouble duplicating.
B. has a well-known and well-regarded brand name, prefers offensive strategies to defensive strategies, and has a strong balance sheet.
C. is the acknowledged market-share leader.
D. is the industry's acknowledged technology leader
