Full Name: Nguyen Thi Viet Huong

Class: Advanced Finance 56 B

EXAM CRAFTING & EXECUTING STRATEGY

Chapter 2
1 Which one of the following is not an integral part of the managerial process of crafting
and executing strategy?
A)
Developing a strategic vision, a mission statement and core values.
B)
C)
D)

Choosing a strategic intent.

Setting objectives.
Crafting a strategy

E) Monitoring developments, evaluating performance, and initiating corrective

adjustments.
2 A strategic vision for a company
A) involves how fast to pursue the chosen strategy and reach the targeted levels of
performance.
B) consists of thinking through what it will take to make the chosen strategy work as
planned.
C) provides a panoramic view of "where we are going" and a convincing rationale for
why this makes good business sense for the company
D) spells out how the company is going to get from where it is now to where it wants
to go and when it is expected to arrive.
E) concerns management's view of how to transition the company's business model
from where it is now to where it needs to be.
3 Which of the following statements about a company's values is false?
A) Company values are the beliefs, traits, and behavioral norms that management has
determined should guide the pursuit of its vision and mission
B) In companies with long-standing values that are deeply entrenched in the corporate
culture, senior managers are careful to craft a vision, mission, and strategy that
match established values, and they reiterate how the value-based behavioral norms
contribute to the company's business success. If the company changes to a different
vision or strategy, executives take care to explain how and why the core values
continue to be relevant.
C) A company's core values can relate to such things as fair treatment, integrity,
ethical behavior, innovativeness, teamwork, top-notch quality, superior customer
service, social responsibility, and community citizenship.
D) At values-driven companies, executives "walk the talk" and company personnel are
held accountable for embodying the stated values in their behavior.

E) At all but a few companies, the stated values are mostly window-dressing and
serve mainly to embellish the company's public image.
4 Most boards of directors have a compensation committee, composed entirely of
________________________, to develop a salary and incentive compensation plan that
rewards senior executives for boosting the company's _______________ performance
and growing the economic value of the enterprise on behalf of shareholders.
A)
outside directors; long-term
B)
C)
D)
E)

shareholders; stock
inside directors; short-term
outside directors; quantitative
Independent experts; overall

5 Which of the following represents the best example of a well-stated strategic objective
(as opposed to a well-stated financial objective)?
A)
Achieve revenue growth of 10% annually
B) Increase market share from 17% to 22% and achieve the lowest overall costs of any
producer in the industry, both within three years
C) Invest more money in R&D to enable the company to offer customers the widest
selection of products in the industry
D)
Achieve a AA bond rating within 2 years and an annual cash flow of $500 million
E) Pay more attention to reducing costs by half of the current level over the next few
years
6 Which of the following statements about objectives is false?
A) A company's managers are well-advised to give the achievement of financial
objectives a much higher priority than the achievement of strategic objectives.
B) The managerial purpose of setting objectives is to convert the vision and mission
into specific performance targets.
C) A "balanced scorecard" for measuring company performance views financial
performance measures as lagging indicators that reflect the results of past decisions
and organizational activities and views strategic performance measures as leading
indicators of a company's future financial performance
D) Objectives serve as yardsticks for tracking a company's performance and progress,
and (3) they motivate employees to expend greater effort and perform at a high
level.

E) The best ways to promote outstanding company performance is for managers to

deliberately set performance targets high enough to stretch an organization to
perform at its full potential and deliver the best possible results
7 A balanced scorecard for measuring company performance
A) entails balancing the pursuit of good bottom-line profit against the pursuit of nonprofit objectives (although achieving profitability targets is nearly always given
greater emphasis).
B) involves putting equal emphasis on the achievement of financial objectives,
strategic objectives, and social responsibility objectives.
C) entails setting both financial and strategic objectives and putting balanced emphasis
on their achievement.
D) helps prevent the pursuit of strategic objectives from dominating the pursuit of
financial objectives.
E) is necessary in order to prevent the drive for achieving financial objectives from
weakening the attention paid to social responsibility, community citizenship, and
other worthy goals.
8 The task of crafting a strategy is
A)
the function and responsibility of a few high-level executives.
B) more of a collaborative group effort that involves all managers and sometimes key
employees striving to arrive at a consensus on what the overall best strategy should
be.
C)
the function and responsibility of a company's strategic planning staff.
D) is a collaborative team effort in which every manager has a role for the area he or
she heads; it is rarely something that only high-level managers do.
E)
first and foremost the function and responsibility of a company's board of directors.
9 The strategy-making hierarchy in a single business company consists of
A)
business strategy, divisional strategies, and departmental strategies.
B)
C)
D)

business strategy, functional-area strategies, and operating strategies.

business strategy and operating strategy.
managerial strategy, business strategy, and divisional strategies.

E) corporate strategy, divisional strategies, and departmental strategies (whereas in a

diversified company it consists of corporate strategy, divisional strategy and
operating strategy).

10 Which one of the following is not among the chief duties/responsibilities of a

company's board of directors insofar as the strategy-making, strategy-executing
process is concerned?
A) Direct senior executives as to what the company's long-term direction, objectives,
business model, and strategy should be and, further, closely supervise senior
executives in their efforts to implement and execute the strategy
B)
Oversee the company's financial accounting and financial reporting practices.
C) Evaluating the caliber of the CEO's strategy-making/strategy-executing skills and
of other senior executives, since the board must elect a successor when the
incumbent CEO steps down, either going with an insider or deciding that an
outsider is needed
D)
Critically appraise the company's direction, strategy, and business approaches
E) Institute a compensation plan for top executives that rewards them for actions and
results that serve shareholder interests.

EXAM CRAFTING & EXECUTING STRATEGY

Chapter 3
1

Which of the following is not among the factors that determine whether competitive
rivalry among industry members is strong, moderate, or weak?
A) Whether buyer demand for the product is growing rapidly or slowly
B)

Whether customers' costs to switch brands is low or high

C) How active industry rivals are in initiating fresh competitive moves and in using
the various weapons of competition to improve their market standing and business
performance
D) Whether there are few or many rival sellers and whether there are big differences
in their sizes and competitive capabilities
E) Whether industry members are vertically integrated and whether the industry is
characterized by significant scale economies and rapid technological change
2 The rivalry among competing sellers in an industry intensifies
A)
when buyer demand for the product is growing rapidly.
B) when customers are brand loyal and their costs to switch to competing brands or
substitute products are relatively high.
C) when buyer demand is strong and sellers have little or no excess capacity and only
minimal inventories.
D) as the number of rivals increases and as they become more equal in size and
competitive capability.

E)

when the products of rival sellers are highly differentiated products and the
industry consists of so many rivals that any one company's actions have little direct
impact on rivals' business.

3 Competitive pressures associated with the threat of new entrants grow stronger when
A)
buyer demand is growing slowly and the pool of entry candidates is small.
B) the number of customers for the industry's product is large and the product
offerings of rival sellers are strongly differentiated.
C) Existing industry members are looking to expand their market reach by entering
product segments or geographic areas where they do not have a presence yet.
D) there are not many competitors already in the industry, their products are highly
differentiated, and buyers are brand loyal.
E) a small percentage of companies in the industry are currently earning aboveaverage profits, entry barriers are high, and buyers are not brand loyal.
4 Which of the following conditions generally raise the barriers to entering an industry?
A) Low levels of brand loyalty on the part of customers and the presence of more than
20 rivals in the industry
B) Rapid market growth, low buyer switching costs, and weak brand preferences and
customer loyalty
C)
Product offerings that are pretty much standardized from rival to rival
D) High capital requirements, and difficulties in building a network of distributorsretailers and securing adequate space on retailers' shelves,
The industry is not characterized by scale economies and/or sizable
E) learning/experience curve effects and few firms in the industry hold key patents
and/or possess significant proprietary technology not readily available to a
newcomer
5 Competitive pressures stemming from substitute products are weaker when
A) buyers don't believe substitute products have equal or better features, and buyers'
costs of switching to substitutes are relatively high.
B) the industry consists of a relatively large number of rival sellers that are fairly
equal in size and similar in competitive capability.
C) entry barriers are moderately high but by no means prohibitive and there is a fairly
small pool of entry candidates.
D) a number of customers buy in large volumes and are in a strong bargaining position
to win concessions from sellers.
E) buyer loyalty to the products they are currently purchasing buyers' costs of
switching to substitutes are relatively low.
6

Which of the following is not a factor in determining whether the suppliers to an

industry are a source of strong, moderate, or weak competitive pressures?

A)
B)
C)
D)
E)

Whether certain needed inputs are in short supply and whether the item being
supplied is a standard commodity that is readily available from many suppliers at
the going market price
Whether it is difficult or costly for industry members to switch their purchases
from one supplier to another or to switch to attractive substitute inputs
Whether industry members are major customers of suppliers and whether suppliers'
sales to members of this one industry constitute a big percentage of their total sales
Whether the industry supply chain is global or mostly national, whether suppliers
have a wide or narrow product line, and whether industry members place orders
frequently or infrequently with suppliers
Whether certain suppliers provide a differentiated input that enhances the
performance or quality of the industry's product

Whether the buyers of an industry's product have strong or weak bargaining leverage
over the terms and conditions of sale depends on
A) how often that sellers alter their prices, how sensitive buyers are to price
differences among sellers, whether the item being purchased is a good or a service,
and whether buyers buy frequently or infrequently.
B) the frequency with which rival firms change strategies and the amount of
advertising that sellers utilize.
whether all buyers have the same degree of negotiating power, whether the item
C)
carries a high or low price tag, and whether there are many or few collaborative
partnerships between sellers and buyers.
D) whether buyers purchase in relatively large or small quantities, and how well
informed buyers are about sellers' prices, products, and costs.
E) whether buyer demand is seasonal or year-round, whether entry barriers are high or
low, and whether competitive pressures from substitutes are strong or weak.

8 The task of driving forces analysis is to

A) identify all the underlying factors that can cause industry and company profitability
to rise or fall in the years ahead.
B)
predict what new forces of competitive and market change will emerge next.
C) determine which of the five competitive forces is the biggest driver of industry
change and to assess the impact on the company.
D) identify which companies are being driven to move from one strategic group to
another strategic group.
E) determine how the collective impact of the driving forces will change market
demand, competition and industry profitability.
9 Strategic group mapping is a helpful analytical tool for
A) assessing why competitive pressures and driving forces usually impact the biggest
strategic groups more so than the smaller groups.
B) determining which companies have how big a competitive advantage and how
good their prospects are for increasing their market shares.

C) determining which company is the most profitable in the industry and why it is
doing so well.
D)
revealing the market positions of key industry competitors.
E) pinpointing which of the five competitive forces is the strongest and which is the
weakest.
10 An industry's key success factors
A) can best be determined by studying the strategies of those companies in the
industry's best strategic group and those in the worst strategic group.
B) are so important to competitive success that all firms in the industry must pay close
attention to them or risk becoming an industry laggard or failure.
C) are mainly a function of an industry's macro-environment and dominant economic
features.
can best be determined by identifying the similarities in the strategies of rival
D)
companiesthose strategy elements that are most commonly found in the
strategies of rivals can be considered key success factors.
E) usually relate to technology and manufacturing-related capabilities and rarely to
distribution or marketing capabilities.