BSG Chapter 1 Quiz

The difference between a company’s business model and a company’s strategy is that

its business model relates to management’s blueprint for delivering a valuable product or service to customers in a manner that will generate ample revenues to cover costs and yield an attractive profit while its strategy relates to the companies competitive moves and business approaches (which may or may not lead to profitability)

A company’s strategy is a "work in progress" and evolves over time because of

The need to react and respond to changing market and competitive conditions and ongoing management efforts to improve this or that piece of the strategy

Good strategy and good strategy execution

are the most trustworthy signs of good management

Based on figure 1.1, which of the following is not something to look for in identifying a company’s strategy?

Actions to rise or lower the company’s performance targets and actions to pay down the company’s long-term debt

Which of the following statements about a company’s strategy is false?

Well-crafted company strategies rarely need to be changed unless one or more important rival firms launch unexpected strategic initiatives that endanger the company’s strategy long-term profitability

A company’s business model

sets forth how its strategy and business approaches will create value for customers while at the same time generating ample revenues to cover costs and realize a profit

Which of the following is not a frequently used strategic approach to setting a company apart from rivals, delivering superior value, achieving competitive advantage, and converting buyers into loyal customers?

striving to be more profitable than rivals and aiming for a competitive edge based on bigger profit margins

The two crucial elements of a company’s business model are

its customers vale proposition (which lays out the company’s approach to satisfying buyer needs and requirements at a price they will consider a good value) and its "profit formula" (the business approach, means of generating revenues, principal resources, and operating systems that will be employed to create and deliver that intended customer value cost-efficiently and at a price that will enable attractive profits)

A company’s strategy and its quest for competitive advantage are tightly connected because

a company is almost certain to earn significantly higher profits when it enjoys a competitive advantage as opposed to when it competes with no advantage or is hamstrung by completive disadvantage

A company’s strategy is defined by

the specific market positioning, competitive moves, and business approaches that form management’s answer to "What’s our plan for running the company and producing good results?"

Which of the following questions helps distinguishing a winning strategy from a mediocre or losing strategy?

Is the strategy helping the company achieve a sustainable competitive advantage and is it resulting in good company performance?

A company’s strategy evolves from one version to the next

as managers abandon obsolete or ineffective strategy elements, settle upon a set of proactive strategy elements, and then- as new circumstances unfold–make adaptive strategic adjustments, which gives rise to reactive strategy elements

Crafting an ethical strategy requires that managers

carefully and conscientiously consider whether each proposed strategy element can pass the test of moral scrutiny in the sense of not being shady, unconscionable, or injurious to others.

Which of the following is not something a company’s strategy is concerned with?

Management’s choice of which of several alternative business models to employ in delivering value to customers and to shareholders

In choosing among strategy alternatives, company managers

are well-advised to embrace strategic actions that can pass the test of moral scrutiny– it is not enough to just stay within the bounds of what is legal and acceptable to regulators

In endeavoring to craft an ethical strategy, company managers

have to go beyond what strategic actions and behaviors are deemed legal and address whether all the various elements of the company’s strategy can pass the test of moral scrutiny

In crafting a strategy, management is in effect saying

"among all the many different business approaches and ways of competing we could have chosen, we have decided to employ this particular combination of competitive and operating approaches in moving the company in the intended direction, strengthening its market position and competitiveness, and meeting or beating our performance objectives"

The customer value proposition portion of a company’s business model concerns

the company’s approach to satisfying buyer needs and requirements at a price they will consider a good value

According to Figure 1.1, which of the following is not something to look for in identifying a company’s strategy?

Actions to strengthen the company’s competitive position by hiring one or more new top executives or laying off a portion of its work force or paying down its long-term debt

Which one of the following statements about whether a company’s strategy can be considered ethical is true?

Just keeping a company’s strategic actions within the bounds of what is legal and acceptable to regulators does not mean the strategy is ethical

A winning strategy is one that

helps the company achieve a sustainable competitive advantage, results in better company performance, and fits the company’s internal and external situation

Which of the following is not one of the reasons that a company’s strategy evolves over time?

The need on the part of company managers to make regular strategy adjustments so as to avoid the risk that rivals might soon find ways to weaken or defeat its present strategy improvements of their own

Which of the following statements about a company’s strategy is true?

A company’s strategy is typically a blend of proactive and reactive strategy elements

Good strategy combined with good strategy execution

are strongly correlated with how well the company performs both financially and in the marketplace