Business Strategy

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Name_________________________________

Northeastern University
MGT 4750 Winter2011
Test 2

A. Multiple choice (Each correct answer is worth 2 points.) First read what the question is asking . . .then mark the single best answer for each.

1. While there are many routes to sustainable competitive advantage, they all involve A)building a brand name image that buyers trust.
B)delivering superior value to buyers and building competencies and resource strengths in performing value chain activities that rivals cannot readily match. C)achieving lower costs than rivals and becoming the industry’s sales and market share leader. D)finding effective and efficient ways to strengthen the company’s competitive assets and to reduce its competitive liabilities. E)getting in the best strategic group and dominating it.

2. Corporate strategy options for diversified companies include A)broadening the company’s business scope by making new acquisitions in new industries. B)divesting weak-performing businesses and retrenching to a narrower base of business operations. C)restructuring the company’s business lineup with a combination of divestitures and new acquisitions to put a whole new face on the company’s business makeup. D)pursuing growth opportunities within the existing business lineup. E)All of these.

3. The biggest and most important differences among the competitive strategies of different companies boil down to A)how they go about building a brand name image that buyers trust and whether they are a risk-taker or risk-avoider. B)the different ways that companies try to cope with the five competitive forces. C)whether a company’s market target is broad or narrow and whether the company is pursuing a competitive advantage linked to low cost or differentiation. D)the kinds of actions companies take to improve their competitive assets and reduce their competitive liabilities. E)the relative emphasis they place on offensive versus defensive strategies.

4. The most important strategy-making guidance that comes from drawing a 9-cell industry attractiveness-competitive strength matrix is A)which businesses in the portfolio have the most potential for strategic fit and resource fit. B)why cash cow businesses are more valuable than cash hog businesses. C)that corporate resources should be concentrated on those businesses enjoying both a higher degree of industry attractiveness and competitive strength, and that businesses having low competitive strength in relatively unattractive industries should be looked at for possible divestiture. D)which businesses have the biggest competitive advantages and which ones confront serious competitive disadvantages. E)which businesses are in industries with profitable value chains and which are in industries with money-losing value chains.

5. The generic types of competitive strategies include
A)build market share, maintain market share, and slowly surrender market share. B)offensive strategies and defensive strategies.
C)low-cost provider, broad differentiation, best-cost provider, focused low-cost, and focused differentiation. D)low-cost/low price strategies, high-quality/high price strategies, and medium quality/medium price strategies. E)price leader strategies, price follower strategies, technology leader strategies, first-mover strategies, offensive strategies, and defensive strategies.

6. The basic purpose of calculating competitive strength scores for each of a diversified company's business units is to A)rank the business unit from best to worst in terms of potential for cost reduction and profit margin improvement. B)determine how strongly positioned each business unit is in...
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