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MultipleChoiceQuiz
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ResultsReporter
Outof20questions,youanswered2correctlywithafinalgradeof10%
2correct(10%)
18incorrect
(90%)
0unanswered
(0%)

YourResults:
Thecorrectanswerforeachquestionisindicatedbya

1
INCORRECT

Thegameplanacompany'smanagementisusinggrowthebusiness,stakeoutamarketposition,attractandplease
customers,competesuccessfully,conductoperations,andachieveorganizationalobjectivesisreferredtoasits
A) strategicoffensiveforbecomingamarketleader.
B) businessmodel.
C) longtermstrategicdirection.
D) missionstatement.
E) strategy.

2
INCORRECT

Incraftingastrategy,managementismakingwhichofthefollowingstatements?
A) "Thisiswhereweareheaded,thisisourgameplanforgettingwherewewanttogo,andthisishowweintendto
executeourplansuccessfully.''
B) "Thisisthecurrentbusinessplanwehaveforbeingawinnerinthemarketplaceandourextensiveanalysisofthe
company'ssituationindicatesitwillwork."
C) "Thisishowwearegoingtoknockthesocksoffourcompetitors."
D) "Amongallthepathswecouldhavechosen,wehavedecidedtofocusonthesemarketsandcustomerneeds,
competeinthisfashion,allocateourresourcesandenergiesintheseways,andusetheseparticularapproachesto
doingbusiness."
E) "Thisisourcurrentbusinessplan,eventhoughitwillprobablychangeandevolveaswereacttonewmarket
conditions."

3
INCORRECT

Thecentralthrustofacompany'sstrategy
A) istomakethecompany'sbusinessmodelworkasplanned.
B) istoproducegoodbottomlineresults.
C) istotilttheplayingfieldinthecompany'sfavorandproduceasustainablecompetitiveadvantageoverrivals.
D) istodestroyrivalsinthemarketplaceandtakesubstantialsalesandmarketshareawayfromthem.
E) istoachievethecompany'sbusinessmission.

4
INCORRECT

Whichofthefollowingisnotanaspectofacompany'sstrategy?
A) Strivingforacompetitiveedgeoverrivals
B) Howtoachievetargetedobjectives
C) Makingaprofit
D) Howtorespondtochangingmarketconditions
E) Howtomanageeachfunctionalpieceofthebusinessanddevelopneededorganizationalcapabilities

5CORRECT

Whichofthefollowingisnotoneofthemostfrequentlyusedstrategicapproachestobuildingcompetitiveadvantage?
A) Strivingforacompetitiveedgebasedonbiggerprofitmargins
B) Developingexpertiseandresourcestrengthsthatrivalscan'teasilymatch
C) Strivingtobetheindustry'slowcostprovider
D) Focusingonanarrowmarketniche
E) Outcompetingrivalsbasedondifferentiatingfeatures

6
INCORRECT

Whichoneofthefollowingisnotsomethingtolookforintryingtoidentifyandunderstandwhatacompany'sstrategyis?
A) Itsactionstoaltergeographiccoverageanditsactionstoformstrategicalliancesandcollaborativepartnerships
B) Itsactionstomergewithoracquireanothercompanyinordertostrengthenthecompany'sbusinessposition
C) Itsactionstostrengthenitsresourcebaseandcompetitivecapabilitiesanditseffortstooutcompeterivalsandbuild
competitiveadvantage
D) Itsactionstorevisethecompany'sstrategicvisionandbusinessmodel
E) TheactionsandapproachesthatdefinehowacompanymanagessuchfunctionsasR&D,production,salesand
marketing,andfinance

7
INCORRECT

Theactualstrategyacompanyemploysis
A) isknownonlytotoplevelmanagersandiskepthiddenfromoutsideviewforreasonsofcompetitivesensitivity.
B) usuallydeviateslittlefrommanagement'splannedsetofactionsandbusinessapproachessincemakingonthespot
changesistoorisky.
C) prettymuchlikethestrategiesofotherindustrymemberssinceallcompaniesareconfrontingmuchthesame
marketconditionsandcompetitivepressures.
D) seldomconsistentwithitsbusinessmodelbecauseofongoingchangesinmarketconditionsandcompetitive
pressures.
E) partlyproactive(inthesenseofreflectingmanagement'splansandintentions)andpartlyreactivetochanging

circumstances.

8
INCORRECT

Companystrategiesevolvebecause
A) itisabadideatodotoomuchstrategizinguntilacompanyhasbeeninbusinesslongenoughtoknowwhat
strategieswillworkbest.
B) mostmanagersliketodevelopthestrategyinbitsandpiecesratherthanallatonce.
C) evenawellplannedoutinadvancestrategymustbeadaptedtoshiftingmarketconditions,thefreshactionsof
competitors,alteredcustomerneedsandpreferences,emergingopportunitiesandthreats,unforeseenevents,and
newmanagerialthinkingabouthowtoimprovethepresentstrategy.
D) manymanagersareconservative,preferringtobelatemoversinrespondingnewdevelopmentsandavoidingthe
risksassociatedwithdevelopingacompletestrategytooquickly.
E) astrategydoesnotreallytransitiontoawellcraftedstageuntilacompanyhasbeentryingtoexecuteitfora
numberofyearsandhaslearnedwhatworksandwhatdoesn't.

9
INCORRECT

Craftingstrategycallsforgoodentrepreneurshiponthepartofmanagersbecause
A) futuremarketconditionsareuncertainandcompanymanagershavetoberisktakersindealingwiththis
uncertainty
B) acompanyhastosteeritsbusinessanditsstrategyinwhatevernewdirectionsaredictatedbychangingbuyer
preferences,thelatestactionsofrivals,newtechnologies,theemergenceofnewmarketopportunities,andother
newlyappearingmarketconditions.
C) goodstrategiescannotbeimitativeofwhatrivalsaredoing,whichmeansthatcompanymanagersmustbe
innovativeanddevelopastrategythatplowsnewground.
D) thebeststrategiesrequirereallycreativestrategicthinking(whichiswhatgoodentrepreneursdobest).
E) futuremarketconditionsareuncertainandgoodstrategymakingunderconditionsofuncertaintyrequiremanagers
toberiskaverseandwaryofdeviatingfarfromtriedandtruebusinessapproaches.

10
INCORRECT

Acompany'sstrategycanbeconsidered"ethical"
A) aslongasallofitsactionsarelegalandincompliancewithgovernmentalrulesandregulations.
B) solongasitsactionsandbehaviorscanpassthetestof"moralscrutiny"andnoneofitsactionsorbehaviorsare
unsavoryandcrossthemorallinefrom"cando"to"shouldnotdo."
C) solongasnoneofthecompany'sstakeholderscustomers,employees,shareholders,suppliers,andthe
communitiesinwhichthecompanyoperatesisunjustlyinjuredbythecompany'sactions.
D) solongasreligiousauthoritiesfindnothing"wrong"inthecompany'sactions.
E) Allofthese.

11
INCORRECT

Management'sstorylineforhowandwhythecompany'sproductofferingsandcompetitiveapproacheswillgeneratea
revenuestreamandhaveanassociatedcoststructurethatproducesattractiveearningsandreturnsoninvestmentis
A) calledacompany'sstrategy.
B) referredtoasacompany'sstrategicintent.
C) referredtoasacompany'sprimaryfinancialobjective.
D) whatacompany'smissionstatementisallabout.
E) referredtoasacompany'sbusinessmodel.

12
CORRECT

Whichofthefollowingstatementsaboutacompany'sstrategyisfalse?
A) Normally,companieshaveanarrowwindowofstrategicfreedominchoosingthehowsofstrategybecauseall
competitorsarefacingthesamemarketconditionsandcompetitivepressuresand,therefore,havetocopewith
themusingverysimilarstrategies.
B) Acompany'sstrategyresultsinachievingsustainablecompetitiveadvantagewhenanattractivenumberofbuyers
preferitsproductsorservicesovertheofferingsofcompetitorsandwhenthebasisforthispreferenceisdurable.
C) Acompany'sstrategyisbasedpartlyontrialanderrororganizationallearningaboutwhathasworkedwelland
whathasn't.
D) Acompany'sstrategyandstrategicmovesareonlypartlytheresultofproactiveplottingandmanagementdesign.
E) Acompany'sstrategyisaworkinprogress,notaonetimemanagementexercise.

13
INCORRECT

Southwest'sstrategy(asdescribedinIllustrationCapsule1.1)doesnotincludewhichoneofthefollowing?
A) Growingthebusinessbygraduallyaddingmoreflightsonexistingroutesandbyinitiatingservicetonewairports
B) Makingfriendlyserviceacompanytrademark
C) Encouragingcustomerstomakereservationsandpurchaseticketsatthecompany'sWebsite
D) Avoidingflyingintocongestedairports
E) Havingaverydiversefleetofaircraft,soastobettermatchaircraftsizetothepassengertrafficoneachroute.

14
INCORRECT

WhichofthefollowingstatementsconcerningMicrosoft'sbusinessmodelandRedHatLinux'sbusinessmodel(asdiscussed
inIllustrationCapsule1.2)isfalse?
A) MicrosofthasaprovenbusinessmodelwhileRedHatLinux'sbusinessmodelisunproven.
B) Microsoft'sbusinessmodelinvolvesemployingacadreofhighlyskilledprogrammerstodevelopproprietarycode
keepingthesourcecodehiddenfromcustomers/users,andlockingthemintousingMicrosoft'sproprietary
software.
C) MostofMicrosoft'scostsariseonthefrontendindevelopingthesoftwareandarethus"fixed"thevariablecostsof
producingandpackagingtheCDsprovidedtousersareonlyacoupleofdollarspercopyoncethebreakevenvolume
isreached,Microsoft'srevenuesfromadditionalsalesarealmostpureprofit.
D) RedHatreliesonthecollaborativeeffortsofvolunteerprogrammersfromallovertheworldwhocontributebitsand
piecesofcodetoimproveandpolishtheLinuxsystem
E) RedHat'sbusinessmodelispredicatedoncloselyguardingitssourcecodewhileMicrosoftisastrongadvocateof
openorfreesourcecode.

15
INCORRECT

Whichofthefollowingstatementsaboutacompany'sstrategyistrue?
A) Craftinganexcellentstrategyismoreimportantthanexecutingitwell.
B) Managersatallcompaniesfacethreecentralquestionsinthinkingstrategicallyabouttheircompany'spresent
circumstancesandprospects:Wherearewenow?Wheredowewanttogo?Howwillwegetthere?
C) Acompany'sstrategydealswithwhethertherevenuecostprofiteconomicsofitsbusinessmodeldemonstratethe
viabilityofthebusinessenterpriseasawhole..
D) Masterfulstrategiescomepartly(maybemostly)bydoingthingsinmuchthesamewayastheindustryleaderbut
thenbeingbetterthantheleaderinoneparticularareathatcountsheavilywithbuyers.
E) Thehardfactisthatmostcustomersandmostsuppliersarerelativelyunconcernedwhetheracompanytheydo
businesswithengagesinsleazypracticesorturnsablindeyetobelowboardbehavioronthepartofemployees.

16
INCORRECT

Thenittygrittyissuesurroundingacompany'sbusinessmodeliswhether
A) thestrategyiscapableofproducingsustainablecompetitiveadvantage.

B) itmatchesthecompany'sexternalandinternalsituation.
C) thechosenstrategymakesgoodbusinesssensefromamoneymakingperspective.
D) thecompany'sstrategyandstrategicmovesaremostlyproactive.
E) thecompany'sstrategystandsareallygoodchanceofhittingahomeruninthemarketplace.

17
INCORRECT

Acompany'sstrategyis
A) drivenpartlybymanagementanalysisandchoiceandpartlybythenecessityofadaptingandlearningbydoing.
B) temporaryandontrial,awaitingnewideasforimprovementonmanagement'spart,theappearanceofmarketand
competitiveconditionsthatcallforsomekindofreactionandresponse,andanyotherchangesinthecompany's
situationthatmanagersbelievewarrantstrategyadjustments.
C) islesslikelytoproduceadurablecompetitiveedgeoverrivalsifthestrategyisbasedonhavingadistinctiveproduct
andmorelikelytoproduceadurablecompetitiveedgeoverrivalsifitisfocusedonbuildingcompetitivelyvaluable
expertiseandcapabilitiesthataredifficultforrivalstomatch.
D) revealedinpartbyitsactionstogainsalesandmarketsharevialowerprices,moreperformancefeatures,more
appealingdesign,betterqualityorcustomerservice,widerproductselection,andothercompetitivetactics.
E) Alloftheabove.

18
INCORRECT

Awinningstrategyisonethat
A) makesthecompanyamarketleader,isethicallyandsociallyresponsible,andmaximizesprofits.
B) ishighlyprofitableandbooststhecompany'smarketshare.
C) passestheprofitabilitytest,theethicsandsocialresponsibilitytest,thecustomersatisfactiontest,andthe
shareholderwealthtest.
D) fitsthecompany'sinternalandexternalsituation,buildssustainablecompetitiveadvantage,andboostscompany
performance.
E) passestheethicalstandardstest,thecompetitiveadvantagetest,andtheprofitabilitytest.

19
INCORRECT

Craftingandexecutingstrategyaretopprioritymanagerialtasksbecause
A) howmanagersgoaboutthetasksofcraftingandexecutingstrategysendsamessagetoshareholdersandthe
entireinvestmentcommunityregarding"whatitiswearetryingtodoandhowweplantoachieveourobjectives."
B) managerialdecisionmakingislikelytoberudderlessunlessseniorexecutiveshaveaclearanswerto"wherearewe
headed,howdoweplantogetthere,andwhendoweexpecttoarrive?"
C) thereisacompellingneedformanagerstoproactivelyshapehowthecompany'sbusinesswillbeconductedand
becauseastrategyfocusedorganizationismorelikelytobeastrongbottomlineperformer.
D) withoutclearguidanceastowhatthecompany'sbusinessmodelandstrategicintentare,managerialdecision
makingislikelytoberudderless.
E) acompanyisessentiallyrudderlessifallitdoesisrespondtochangingmarketconditions,newtechnologies,new
opportunities,andthreateningmovesonthepartofcompetitors.

20
INCORRECT

Themosttrustworthysignsofawellmanagedcompanyare
A) astrongemphasisonoffensivestrategiesratherthandefensivestrategies.
B) astrategymatchedtofastevolvingmarketconditionsandbiggerprofitmarginsthanrivalsandasteadyupward
trendinnetincome.
C) attractivebottomlineperformanceandaprovenbusinessmodel.
D) goodstrategymakingcombinedwithgoodstrategyexecution..
E) havingaprofitablebusinessmodel,awillingnesstochangethecompany'sbusinessmodelwhenevercircumstances
warrant,andasustainablecompetitiveadvantage.

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